The Wolf Of All Streets - The Hidden Crisis Behind Bitcoin’s Latest Crash | David Bailey

Episode Date: December 7, 2025

Bitcoin’s price may be volatile, but according to David Bailey, CEO of Nakamoto and architect of the Bitcoin treasury movement, we’re entering an entirely new phase... one where every company will eventually own Bitcoin. In this exclusive conversation, David reveals what’s really happening behind the scenes of the Bitcoin treasury market, how Wall Street’s manipulation has targeted Bitcoin firms, and why the four-year cycle is officially dead.

Digital asset treasury companies were all the rage in the first half of the year and into the summer before we saw a massive collapse across the space, leaving many wondering what comes next. I spoke to David Bailey, the CEO of Kindly MD, also known as Nakamoto, about lessons that he learned from building a digital asset treasury company. Wall Street does not give an F about anything but making money, and they will smile and shake your hand and tell you whatever you want to hear as they slit your throat. Why he's focused on Bitcoin. I mean, ultimately, at the end of the day, this phenomenon is really about corporate entities buying Bitcoin. And we're just at the beginning stages of that,

and eventually every company will own Bitcoin. And what the future looks like for these companies. Spoiler, everybody still agrees that Bitcoin is going way higher and Bitcoin Treasury companies will follow. I think the best place to start, obviously, is just to lay the groundwork for where the treasury company market stands right now. Obviously, we had, like, I think we could argue, like a hype cycle and then sort of this temporary bust, and now I think like any cycle we've seen like that, we probably see a few phoenixes rise from the ashes and see what the space is really about. so maybe you can just sort of set the table obviously we had strategy for years and Nakamoto and 21 sort of came in the first half of the year a lot of copycats and here we are

yeah even before Nakamoto there was Metaplanet there was quite a few similar so yeah I mean I really don't think like this is a fad or a flash in the pan like we had a lot of deals come to market all at the same time there was a massive glut of supply and you know know, not all these deals are created equal. So I think, you know, it's going to take us a little while to, like, work through kind of all the supply that's hitting the market. Like, we're really just seeing the supply hit the market, too, which is the one kind of negative thing. It's like, we were really the first to unlock and then strive behind us, and then there's more that unlock this month in December. And so, you know, that'll take a little while to work through.

But then once we work through it, I think you're going to see consolidation. You're going to see, like, less players. You're going to see some of the, you know, as the market was getting hot, the deals that were coming to market were getting of lower and lower quality. And so I think, you know, you'll wash out some of the people that were just in search of fast money. And so, yeah, I think this will be in a much healthier place by next year. And I mean, ultimately, at the end of the day, this phenomenon is really about corporate entities buying Bitcoin. And we're just at the beginning stages of that. And eventually every company will own Bitcoin. So yeah, that's my general view. Yes, I mean talking about the ones that were

sort of a flash in the pan, the ones as I kind of mentioned for copycats, came in later, didn't really have a plan, money grab, however you want to describe it. We kind of talked about them getting washed out. What does that look like? Is that acquisitions by better capitalized and stronger players? I mean, they don't disappear. They own Bitcoin. Yeah. Well, so, you know, first off, like the people that were the fast money, you know, in order to raise those incremental dollars after the market was already starting to get exhausted, they had to agree to more and more aggressive terms. And I've seen some of these financings where I'm like, I can't even believe it's legal, like what went down. I mean, you have companies that are taking what I would call

toxic, toxic debt that is like very over leveraged, dangerous debt. And then, you know, using that debt to go buy, you know, shit coin XYZ. And, you know, that's, that is questionable whether that will even be around in, you know, five years' time. And then, you know, doing these management agreements with funds where, like, the Treasury is actually managed by someone else and they're paying two, three percent a year, and they're locked into a 10 or 20-year deal. It's like, okay, well, automatically 50 percent of all the assets

are going to be taken out of this just by the asset manager. So, you know, those were just garbage transactions and the people that were investing into them never really intended to sit in the investments. and, you know, I think the market's going to wise up to that activity. And I think, you know, those teams that are running those, they have a very limited set of options about where to go next. Like there's a playbook for treasury companies.

You know, a key part of the playbook is like, okay, if you're buying Bitcoin, then even when market conditions deteriorate, as long as you just sit on the Bitcoin long enough, market conditions improve and you're able to get access to the capital markets again. If you're sitting in an asset that's not Bitcoin, you may never have a second chance at getting access back to the capital markets. Like your balance sheet's not guaranteed to improve in the future. And so, you know, a company like that, like what do they do? They are burning money at the top line, like with the management company.

You know, maybe they're in like really aggressive, expensive financing terms. You know, they're in an asset that, you know, isn't guaranteed to come back. do they go from there? And so I think that those companies, the ones that actually have assets that can be liquidated, and some of these treasury companies actually have assets that can't be liquidated. Like the treasury's locked assets, like locked tokens or... Yeah, because they're doing OTC deals with investing for a 15% or 20% discount, right. But if there's a liquid value to it, then someone's willing to pay some discount to that liquid value and then convert the assets into something that is valuable. And then I think the other, so like you're going to have like

So, wait, so quickly, that means we could have alt-coin treasury companies that effectively sell the all-coin to the discount by Bitcoin and become Bitcoin treasury company. Yeah. Or you have a Bitcoin treasury company buy an Al-coin. buys them at a huge discount and converts to Bitcoin, right? Okay. Yeah.

So I think like, so like I think the ways that you're going to like, you're going to see the consolidation, one is like by balance sheet quality, two is like management teams and who have quality management teams. and three is like are the businesses operating companies with you know financial sustainability like do they have an operating business that generates income for example and so I think like those are the three things that people are going to be looking for and I think the wave of consolidation is really going to kick off next year so just that's my general view on it and I know there's a lot of let's say exploratory stuff that's already happening in the market behind the scenes on consolidation, but it takes time to do transactions. Like, that's one of the things I've learned about this whole, from this whole process is, like, the public markets are intentionally slow.

And so, like, for those types of deals to happen, like, they don't happen in a month. They happen in, you know, six months. Yeah, that makes sense. So obviously, everybody who is involved in a Bitcoin treasury company believes that Bitcoin will trade higher than it does right now. I think that's a given. How long can they wait if they're burning through management fees, right, of these other expenses that you're talking about for Bitcoin to come back? Like, if Bitcoin comes back and this is a normal, you know, 30% market correction and we're at all-time

highs in six months, nobody's worried. But what if, you know, it's a three-year correction down to $30,000, $50,000 and it takes, you know, that long to return to these prices are higher? Yeah, I think each business is unique from that perspective. You have to kind of of make that assessment yourself and I and you know as an investor that's where the opportunity arises you know I don't think there's just a one rule fits all you know there are some great treasury companies out there but if you drill into the actual operating business that they sit on top of they're hemorrhaging a lot of money and so you know a four-year time horizon if you're paying out on preferreds that you issued that were expensive and you have like a you know major loss

making operating company, then, you know, it's going to be, it's going to be scarier. You know, like for us, I think our annual operating costs, you know, we're probably low single-digit percentages per year of operating expense. And, you know, our goal, we haven't done anything definitive yet, but our goal is to find and acquire companies that are cash flow positive. and generate income. So I think like income is going to be a major part of the story going forward. But, you know, at the end of the day, like these entities are like, in my opinion,

the next generation banks. You know, banks are in the business of monetizing their balance sheet. Like these are Bitcoin banks. They're monetizing a Bitcoin balance sheet. And once you start seeing people monetize it well, you're going to see a lot of people copying that strategy and that will just become the dominant strategy. So, yeah, I think, like, when we start going through this consolidation period, you're also going to see, like, an evolution of the business model in general

from just, like, running an ATM, which there's no moat around running an ATM, to, like, actually creating value that's differentiated and unique. Yeah, that makes perfect sense. I was skeptical of the treasury model at the very beginning, like, pretty outspokenly. I don't really hide that. I just thought there were too many coming too fast, and I didn't really understand. how, without taking on risk or leverage, most of them would make money at least to be competitive. So I think my concern was that what you described would happen,

which is that they would do worse and worse deals and take on more toxic debt and offer higher yields. So that's somewhat played out. So how do they now, if you're sitting on those and you have a plan to go, not for you specifically, but you have to imagine that all the plans are derailed. We were going to acquire more companies, or we bought all the Bitcoin we could buy at 120K, and now it's at 85, like, is there, can they, you know, do share buybacks? I mean, one of the structural ways, and I know it's going to be different for every single one, so I'm speaking generally, like, one of the structural ways that they can even buy the dip, right?

Because anyone, if you're an average retail investor right now, you're, and you believe Bitcoin's going to go up, you're super excited. I'm super excited. Like, I've been buying the hell out of Bitcoin in the 80s, 90s, even above 100, right? So, but if you're a company and you spent it all, what do you do? Like, you know, how your plans have obviously most people planned on Bitcoin being at 150 right now. Well, I mean, actually the scenario you're laying out, it matches what we're going through well. You know, we've, and none of this is material because it hasn't happened so I can talk about it. But I mean, we've had two merger attempts

where we've tried to acquire other companies that have fallen apart because the volatile, in the market, the volatility in our stock, like, it's incredibly hard to price a transaction where you're doing an all-stock M&A deal and your stock is going up and down 60, 70% like it's difficult. So I think, you know, one thing, one thing that Treasury companies need, what we want is like you want some stability in the business. Like it doesn't have to be stability like, you know, you become a boring business, but just like, hey, we need, we need the stock to, you know, operate within some band of reason. So that we can chill for five minutes and lock in on economic. So I do think that's caused a

little bit of a freezing effect on deals. And like from my perspective, as just an operator, if someone came to me and was like, hey, I'm interested in talking about an acquisition deal, like, I'm not wanting to do a transaction with someone who they did a pipe and their pipe hasn't hit the market yet. And so we don't really know what the real value of their company is. Like, how do we? even have a good faith discussion because I'm not going to sign my I already went through that painful process or I'm still going through it but I mean we've made a lot of progress I you know I don't want to go through it again you know dealing with someone else's pipe so it's it's hard to make deals happen in that environment and then for us like you know we deployed our capital our like ethos

in terms of how we deploy capital is like we're not in the business of sitting on cash like our They're not traders. You're not trying to sit and cash. We're Bitcoin accumulators. Like, that's what we're doing. So it's like, okay, well, how do you accumulate Bitcoin if you're trading at a discount to NAV without just levering up the business into an unhealthy territory? So for us, that's why our focus has shifted to income.

Like, how do we just generate income? And, you know, I do think that, you know, and there's a lot of things like that I'm saying that I think maybe, you know, Michael Saylor would disagree with me on just because, like, Michael's model, not only does he have a lot of things that are unique about his business, but he has a very scalable approach. And so the things that maybe an operator like me at Nakamoto would do are not interesting to him because the scale of it is not big enough to be meaningful for him and it's a lot of head bashing and work to just like barely move the needle.

I mean, his one week of the ATM exceeds like the total value of a large M&A transaction for us. So, but like the point being is like you're sitting on an asset that has is liquid that has a cash value. So just imagine if you were a SPAC sitting on a ton of cash. Okay, well, what does a SPAC do? They go identify targets to go and acquire. You can spend the Bitcoin to acquire a business that generates income if you can make an assessment of the durability of the income stream. Maybe it's correlation to the Bitcoin price and saying like, hey, over the next five years, or 10 years, we're going to recover the purchase cost of this asset using, you know, the Bitcoin

we spent. I think that's a completely appropriate thing to do. And if you were acquiring a business that, let's say, generated fees on asset management or custody, things that are easy to model, like, those would be, you know, things that would naturally make sense to fit inside of a Bitcoin bank. So I do see income as being like the next phase of this. And I think there's a lot of interesting businesses out there to be acquired. And like for strategy, like all these people who are dumping on strategy, you know,

using the ATM to pay off their preferreds, et cetera, if strategy wanted to, strategy to just go buy a decadillion dollar business that generates massive cash flow. And it's like, boom, now we have cash flow. We can pay all those preferreds in perpetuity like, you know, F off. So, you know, like at the end of the day, like having a major, a big balance sheet of Bitcoin, it's just optionality. And you can do all sorts of stuff with that optionality.

And like, you know, it's easy to say optionality. It's easy to say permanent capital. Like, but until you're like an operator and you're actually dealing with the internally, like the dynamics of having a Bitcoin balance sheet, like you don't really appreciate or respect what it means to like preserve optionality.

Like that is a huge valuable thing. And like permanent capital, like your investment horizon is totally different when you have permanent capital. You know, the, the, the, if we get, if we, if we, if we make an investment to acquire something and the payoff is 20 years, so be it. Like, like, like, who cares? So, you know, there's not really many investors that sit in that sweet spot where they're able to look, take a very long-term view of what they're, what they're doing, and make investment decisions around that. Like, most investors have a seven-year time horizon or a five-year time horizon.

I mean, it depends on the D.C. timeline. Yeah. Yeah. You talked about the mechanics of the, okay, go ahead and finish. Sorry. No, no. So I just think like, you know, like those are two really unique things about these businesses, the permanent capital and the optionality that they have. And that sets them up to, you know, be very durable businesses and being able to react to whatever market circumstances. Even like businesses I mentioned, I was mentioning earlier, like that have very high burn rate at their companies. like they still have the optionality of cutting that burn. Like there's a lot that can be done.

So I really don't think that you're going to see any spectacular blowups or like I don't think you're going to see anything major happen, at least from like the top tier of these companies that actually have significant balance sheets. Maybe you'll see some blowups of some like smaller ones where they can't, you know, stay compliant with listing fees or whatever and, you know, but I think anyone who has over 1,000 bitcoins, you know, they're going to be around. It's just, is the management going to change? Is it, you know, going to be acquired? Is it going to have to pivot into, you know, some new business stream in order to generate income? But that's what you'll see. So you talked about the difficulty

of the pipe, right, and the shares registering and that time in between and how having gone through it, you would never purchase a company that's still going through it. I think most people, myself included, didn't understand the mechanics of that necessarily from the very beginning and probably dumped on you guys or on the people who stocks went up to, you know, I don't know how high you went, 28 bucks, something like that. And probably, and then you get all the narratives of they're dumping on us, they bought it and they're selling it down, not realizing obviously that like you were getting dumped on effectively, right? Because you're, you can't do anything and you can't speak, I assume, because you are now the CEO of a publicly traded company.

And so I talked to Mark Moss about this at length and a few other people. I have to imagine that for you, that was one of the most personally painful processes ever because you can't really correct the bad takes. And you could probably see where they were coming from, even to some degree, right? But it's not like you wanted price to go up that fast and that far. Dude, I will say the pipe unlocking and going through this experience, you know, it wasn't my first pipe to be involved in. Like we've done, you know, multiple pipe transactions. The meta planet transaction was a pipe. The difference was that all of those pipes that we were doing, we were doing it with investors that we had a personal relationship with, that we had a shared alignment on.

you know we believe in bitcoin we you know uh bitcoiners have a certain i guess philosophy of deploying capital and so it's like okay like you know it's it's not as mercenary at not even close to as mercenary as what wall street is and so you know those experiences that we had with those pipes they were much smaller too which i think is another big key element right um we're not bad experiences and like at the end of the day when you are taking a company public you have to have some sort of structure financing structure to do it from like you know there's not like the reason people are choosing pipes is because there's really not another great way to do this um other than to do a pipe pipe financing me that's that's a private investment into a public entity so i mean that that's

that's what you're doing um so it's really about like okay the composition of the pipe who's participating in the pipe what are the terms of the pipe um you know uh the you know are there lock up are there, I mean, all sorts of questions like that. So, you know, the, the $700 million pipes, or in our case it was a $500 million pipe and then an additional 60 on top of it. And then I think Pomp did one that was 510 and Strive did one that was like 700. Those size pipes are like unprecedented. So no one really had experience, you know, the Walsher guys, I think they had a much better understanding because they've seen like different phases of excitement come to the markets and this is this is the game that they're in for our industry I think everyone was caught blindsided

in terms of like how painful the process was relative to what was expected like you know there was a point in time like when our we did our second pipe and the demand for the second pipe was so strong we raised the 60 million like two days and and if we had had a week it would have been a 500 million dollar second pipe and so that was that five dollars of shares we're like okay like there's so much one was what one 12 like 110 one 12 one 12 and then five i mean five bucks yeah so we're like there's so much to say there was some appetite for this year and and and it's like the the we just we did not think it was realistic that the stock would go really significantly below five bucks um much less go below the pipe price of a dollar 12 much less go to right now we're sitting at 49 cents mean it's just

like it's kind of wild to us. So, you know, when I look at the dynamics of the pipe and like what, what caused, what pieces, like, you know, well, I mean, there's a lot I could say. I think probably some of it I'm really not allowed to say, but adding in, adding investors into the mix that really aren't long-term bullish on Bitcoin or the strategy is a huge mistake. And, you know, you don't realize it until you live through it, but that capital, becomes just immensely expensive capital because if it's going to rotate out like you know we run an ATM like we can sell shares like we don't need someone else

we don't need you to take your private capital and then give you shares so that you can go sell shares at some big inflated number like we can sell shares so what's the point of us taking your capital you know we want capital from people who are going to hold the stock and who are going to believe in the long term vision and plan and are going to ride with us just like you know the first six investors that came into meta planet

that's what they did like we're with our metaplan position we've only added to our meta planet position since that initial investment. So, you know, the – so, like, yeah, and then the process is, like, unbelievably painful because, like, you can't control the stock price. So, you know, we did the deal – our stock was trading at, like, $1.50 or whatever, when we did the deal at $1.12. The stock goes to $32 a share or something like that, like, you know, on the announcement, like the next week. And, you know, the float of the stock, like, based on how much proceeds you raise in the pipe, like, you're issuing, like, 99% of all the stock is going to be issued when that pipe unlocks.

So it's just very hard mechanics to manage, and, you know, it sucks because then people lose money and then they get very pissed. And then they just start saying whatever they want to say on Twitter. And you're right. You can't say anything. You're not supposed to at least say anything. Some of the stuff I just, like, I literally can. I mean, I think you're allowed to, like, dispel outright lies, but I don't think it's... You're not even supposed to do that.

Like, the other day, somebody said something, and I, um, I commented on it, and I got to call immediately for my attorney, like, hey, don't, don't say anything. And it's like, dude, you know, like, there's a certain point in time where it's like, if you don't say anything, you're hurting investors by not saying anything or clarify. Like, you need to, like, clarify this information, but, you know, it's just, it's so highly regulated. that, um, it's very limiting. So yeah, dude, it's challenging. It sucks. I don't know if you can tell. Like, look, that's a, that's a white hair right there. Uh, uh, uh, it's coming in. Here's another white hair. Bro, it's been, it's been very stressful. But, you know, at the end of the day, like, there's, um, the only way through a pipe unlock like that is by grinding through it. Like, that's the only way. Like, the only way out is through. And so, um, you just have to hunker down

and execute on the strategy and the plan. And, you know, fortunately I've been in Bitcoin since 2012 like I've been through four or five 70% drawdowns in Bitcoin like you know at the end of the day our balance sheet is we're just buying Bitcoin and so from from like that perspective like I'm able to like sleep well at night wake up know that if we execute our plan it might take us some time but like we'll be in a good place I couldn't imagine going through this experience and like having 500 million dollar balance sheet of a fart coin or of you know avax i wouldn't i you wouldn't even be able to sleep so um but yeah man it's stressful it's stressful and it and it and it sucks having people be down

money but that's also the nature of of investing and the nature nature of you know why you want to have investors that are long term aligned i mean it's one of those things it feels like certainly not your investors buying the shares at 25 bucks right so it's just people who i guess see a news headline and do zero research don't look into any of the disclosures and just buy something right yeah i mean because who else who else is buying you know at those prices and like you said it's so low float that i don't think people will realize that like you know a market order of any even meaningful size can move the price probably 20 30 i mean even even for our stock like when we when we went to 30 bucks like we traded the first day of trading like a billion and a half

dollars of shares. So, you know, I think there was just a lot of excitement. I think the story of what we're doing at Nakamoto is very unique. And we have a very compelling track record. And so I think that that generated a lot of excitement too. And, you know, I wish in retrospect, just knowing how stuff played out, like I, we should have taken the approach of like, don't buy the stock. But you're not supposed to do that.

You'll get sued. But like, maybe it was. That's also kind of a thing. yeah yeah so but yeah so but um yeah and then i think on the flip side like now the market is is over overreacting to um like micro strategy market conditions bitcoin price like uh you know i won't talk about our stock specifically but let's say some of our peers they're trading you know at a substantial discount to the cash value of the bitcoin they're holding like this feels so much to me like when GBT went from 30 to 50% discount and everyone was like, it's going zero.

And it was the most gratuitous buy in the history of gratuitous buys, right? You're literally buying Bitcoin into 50% discount. That literally, though, that feels like that to me this week for the first time, specifically with the amount of strategy, bud, and of course, now, you know, having a dollar reserve there and all these things. I think it's just, this is how it feels. I remember that feeling. well you remember I read I I I led the the class action oh my gosh I practice yeah so um and you know we loaded up at shares at a 45% discount the um you know it is ironic to find myself in this situation relative to going through the GBTC fiasco but that was a little different yeah but I I agree it reminds me of it and you know what ended up happening there is like buying the shares at a discount to nav turned out to be a

fantastic investment. And I think, like, that's ultimately what will happen here. And, you know, those that don't have, like, viable leadership teams or viable operating companies, they'll get rolled up by people that do. So eventually, you're just going to find a good home. So, yeah, I think we've overcorrected. And I think, you know, it'll be interesting to see how long it takes for the market to adjust. I mean, I do, I mean, the fud against micro strategy has been just so unbelievable and dishonest. And I think the, um, the, uh, the, uh, the de-indexing and lack, like, uh, removing eligibility for indexes. It's just a straight shot across the bow. And in my opinion, from who? It's a great question. I can lay the, like, I can,

you know, I can tell you what people say. I have no idea if it's true, but obviously there's this whole J.P. Morgan versus micro strategy narrative. I can't vet that personally, right? Yeah. I can't, I can't either. You know, MSCI, actually the MS and MSCI is Morgan Stanley. So, you know, maybe people got the wrong Morgan. But I, but even the MSCI was spun out and now is like an independent company. You know, I think that there's a lot of people that, not just a lot. I think it's the majority of Wall Street and institutional finance does not respect Bitcoin and definitely does not respect Bitcoin Treasury companies. And they are very bothered by the success that Micro Strategy has had.

And I see it all over the place in terms of, I'm not going to call it jealousy. That's the wrong term, but just a sense of entitlement that these outsiders are able to come in and exploit the things that we exploit and they're able to make money like we make money or even faster than we make money and like you know I've seen it with MetaPlan it all year with in Japan like

you know they didn't move on an ETF in Japan on the, they didn't move on the tax policy for years. They didn't move on an ETF for years I mean and not because of lack of trying like people were investing huge amounts of time and energy and money into trying to make that happen they just wouldn't move and then as soon as Metaplanet is absolutely crushing.

It's like, okay, well, how are they being so successful? Let's try to identify every value ad that they have and let's go attack that specifically. And it's like, what's going on here? And, you know, I think, you know, meta planets accumulated 30,000 Bitcoins, 40,000 Bitcoins. Like, by any, like, standard, they've accumulated a huge sum of capital.

There are tons of banks that wish they had that type of capital. And so they just kind of want to shut off the spigot and shut off access to these firms and it's it's in my opinion discriminatory and you know it's like the capital markets version of what happened with the debanking and you know some people called me extreme for saying it's operation choke point 3.0 but you know yeah it's what it feels like and and yeah I think I think you know at the end of the day what's great about bitcoin is that you don't need to ask anyone's permission to own Bitcoin, to custody Bitcoin, to be your own bank. And, you know, at the end of the day, these people can disrespect us all they want. They've been disrespecting

us since Bitcoin got started. And, you know, now they're just fighting back. And, and frankly, they're going to lose. So, you know, this is just the new reality. And when Bitcoin goes to a million bucks of Bitcoin, you know, the people with the biggest balance sheets are not going to be the fiat treasury companies. It's going to be the Bitcoin Treasury companies. So, yeah, that's my general view on that. But it's, it's been extreme to watch. You guys were pretty open about your strategy at Nakamoto being to find deals like Metaplanet or create them in other, like, more areas of the world, right? So maybe people don't know. Maybe you could explain it, but I mean, the TLDR is that Metaplanet kind of was the perfect storm for

Bitcoin Treasury company, right? Because it was in a country where institutions really couldn't get access to Bitcoin. And there was this huge tax arbitrage where by owning a stock rather than owning Bitcoin, you got a major tax benefit. I mean, is that the most simplified way of kind of explaining it? Yeah. And then fantastic leadership. Yeah, I mean, Simon is just a fantastic executor with a great, great track record and experience. And so, yeah, I think so. And I think, you know, from our perspective, there are many markets like Japan. You know, maybe not as big as Japan, but like many markets like Japan. And, you know, we've done, I mean, at our hedge fund, UTXO, shoot, I don't even know what the number is at anymore. I mean, we have to be in at least

20 different markets. You know, we've had several that have been as not quite as successful as Metaplanet, but like maybe pure returns have been as successful. SmarterWeb was another one. But I mean, there are markets like India, Saudi Arabia, UAE, mainland China, Turkey, huge markets that have massive capital controls, have, you know, a lot of embedded reasons why it's difficult for investors in those markets to get access to Bitcoin or Bitcoin proxies. And the first person who's able to break into those markets is going to be massively successful. It doesn't matter what the rest of the world's treasury companies are doing.

Like, there is a reason why treasury companies were successful in the first place. And it's because investors want access to Bitcoin. and there's there's pockets, large pockets of capital that can't get it. Right, there's large pockets of capital basically where there hasn't even gotten to the micro strategy phase, much less the ETF phase. Right. Look at what strategy did when he was the only game in town and I guess GPTC was there, but you couldn't buy an ETF and if you want a Bitcoin exposure, for better or worse,

you bought micro strategy, right? And that's still kind of what MetaPlanit is there. So is that still your main focus and strategy? I mean, you talked about buying cash flowing businesses. that sounds like a slight at least pivot, but like, are you still very focused on finding all those areas of the world that you just mentioned and, you know, funding or creating a metaplanet or a micro strategy or strategy in those places? So we funded three so far. You know, we did a follow-on to meta-planet when they did their institutional round, their private placement.

We funded a company in the Netherlands, the first Dutch treasury company, and we funded the first Swiss treasury company. And there's a lot of reasons why people buy these vehicles beyond just tax arbitrage or fund mandate. But there's things like retirement accounts that exist in each of these markets that can only invest into a certain basket

of stocks. Like this is a major item in the UK, for example. They have like a IRA equivalent and it's limited in scope of what you can buy. To buy micro-strategy is incredibly difficult. There's also, you know, index funds that buy, you know, baskets of stocks in certain specific markets or in certain specific currencies. So, you know, there's all these different pools of capital to be able to tap.

So we did both of those markets. I think Switzerland especially has a very interesting capital market with a very low cost of capital. You know, there's the two places in the world that have a carry trade are Japan and Switzerland. So, you know, we're still very eagerly looking at it. additional markets. But like we're being mindful of like two things. One is like market conditions have shifted. And so like we want to make sure that we're not deploying capital too aggressively without understanding like where why have market conditions deteriorated as quickly as they have. And I'm not talking about even amongst treasury companies. I'm meaning. No, just the market

market. Yeah. I'd love to hear if you have any theories about like what what has been just going to ask you because I, you know, I said I mean, I was literally going to ask you the same question. Once again, you know, can follow the smarter people than myself who point out all the whale wallets that are selling long-term holders who have finally decided to exit. But I can't imagine that's what's sending us from the 90s down into the 80s. That makes a lot of sense to me intellectually from 125 to 100 because 100 just feels like a big number. But why would they be selling at 85 and weren't selling it 125? Unless they're just like deep believers in a four-year cycle. But I don't think those guys are like, they're not looking at lines on a chart deciding when to exit their position.

So I really, actually, I'm not sure it feels like, I don't want to say coordinated tax. I'm not a conspiracy theorist, but it feels along the lines of what people are talking about with micro strategy. Well, I just, one thing that never ceases to amaze me is no matter how excited we get, no matter how much we talk about super cycles and all these things, there's always someone with a shit ton of Bitcoin to sell at any price. And I don't understand it. I really don't.

I like, I can't. Well, so let's, let's jump into that. But before we do, let's, I want to finish the, the answering the question you asked. So the, um, we're still looking at these markets, uh, but we're like, we're mindful of the market conditions. We're also like there is a, a perception becomes reality type dynamic where and, and, and, you know, like when, when our, when we, the merger happened for Nakamoto and

our stock sitting hammered, you know, my general view was like, look, like, you know, people are going to trade this stuff up. and down like we just focus on the strategy and ignore the noise and like you know the noise does not matter but it actually the noise does matter to a certain degree like there is a a you know perception equals reality where the stock price is down you know the critics are out and if you're trying to enter a market you're trying to work with a regulator you're trying to do an m&A deal it makes it very complicated or makes it more expensive or difficult to do it in those market And so like, you know, if I'm wanting to go do the first treasury company in the UAE and I'm having to like partner with all these organizations, they pull up our stock price and they're like, oh, wow, your stock price has just been slaughtered 95%. Like it's not very conducive to getting a deal done. So, you know, we are dealing with that. And that's also like why we've kind of shifted our prioritization to getting some income coming into the business. Like from like my perspective, like what can I control? We want the business to be stable.

like stability is actually a huge premium in this market environment. Stability is like you're a life wrap for other people who don't have stability. Stability makes it easier to plan and do things. So like the one thing that Nakmurdo doesn't have that it needs, it needs income. I'm sorry, kindly MD needs is it needs income.

And so, you know, one of the things that's unique about our transaction is that when we put it together, we actually have a call option to do an also stock deal to get BTC, Inc. and UTXO, our, the businesses that I've spent the past 13 years building. Those are very profitable businesses. BTC. Inc. actually just put out their year-to-date financial snapshot up through Q3. And it's like 67 million in revenue, you know, 20-something million in profit, like, you know, strong business. And that's like not inclusive of UTXO as well. And so, you know, those are, those are options that we've already kind of

papered and structured. We don't have to worry about, you know, if we call the option, the transaction, you know, falling apart or whatever, and would put us in a place where kindly MD is now generating significant income and then that income is going into acquiring new Bitcoin or buying the stock back if we're trading at a discount, which is ultimately like where you want to be. You know, getting back to the permanent capital topic earlier, like doing share buybacks is without an actual plan of where what you're trying to achieve is a road to nowhere. You're just taking permanent capital and you're burning it. And the optics are bad. The optics are bad as well. Yeah. I mean, like there was a there was a moment where we were trading at like a 40% discount

to nav and it's like, okay, well, if you're out of like, there is some point in time where it's like I can't generate an ROI like this in the market, even over a multi-year period. I won't be able to generate that type of ROI, so it makes sense. But those are like, generally, you can't deploy very much capital in those types of environments. Like, maybe you can squeeze off like a few million dollars of buys, but like, that's it. If you're buying your stock back and you're trading at a 5% or 10% discounts now, it's like, okay, well, guess what? The price of Bitcoin can swing 10% in a day. And then you're not trading at discounted nav anymore.

And then it's like, you know, you just burned your capital. So, you know, because you have this capital, capital permanently and because you're going to be able to generate yield on this on this Bitcoin over time like to lose a permanent dollar that you're able to generate three four five percent on per year for the next 50 years it's a very expensive dollar to lose so um anyway a bit of a tangent so yeah so we've we've we've shifted our prioritization to getting income generating businesses into um Nakamoto because it's going to bring a stability it was always part of our our strategy from day one, but it wasn't the priority, and now it's become the priority. I think income's going to

become the priority for all of these treasury companies, in my opinion. So, okay, so going, switching topics back to what's going on with the price of Bitcoin. So, you know, in general, I really don't have a good theory about what's going on. And I would say in every market crash, I've just about been able to pinpoint, like, okay, this is the macro dynamic that's going on that's causing this to occur. And for us to move from 120 to where we're at right now, which is like, what are we trading that? We're recording December 1st for people who don't know. This will come out in like six days. We usually try to squeeze it closer, but who knows?

We're in the 80s, right? We can be at 100 or 70 when this comes out, but we're in the 80s right now. So it's 84,000. So, like, this is like a soft. solid 30% you know normal normal bull market correction from some perspective yeah i like there is a there is a um yeah i mean in theory like yeah like we do doesn't feel that way ever you know this doesn't feel like that it feels like someone is a forced seller and they're liquidating huge sums of bitcoin and you think this is like maybe an october 10th

unwind you know that huge liquidation event and someone's unwinding as a result Yeah, I mean, something happened on October 10th. And so, you know, and since October 10th, it's just been persistent downward pressure. And I've heard all sorts of rumors floated of like, okay, it's this firm or this firm or whatever. But, you know, we're talking about tens and tens of billions of dollars. Who's that big? Yeah, there's not many people that would have been that big. They would have forced, that force selling would have been over by now.

That's all of that sort of aligns with what I was saying about like the 125 to 100 kind of makes sense. Now I'm pretty lost in the 80s. Yeah. And so, like, whoever, like, there's only a handful of people that have the amount of Bitcoin to be this big of an impact. And if it's any of those parties, then this could get worse, you know. Now, it might not be. We'd be talking about exchanges, like, I mean, people have hundreds of thousands of Bitcoin, right? Yeah, yeah. Being a big Bitcoin, exchange is not enough. You need to be, like, a massive one. Like, this would have to be, like, you're at the Binance level or the coin base level. Yeah.

Yeah. You know, like something that's a system. And, you know, I think if it was like a, you know, a top, you know, let's say five to 10 or whatever, I think even those would not have made a big enough impact to cause this. You know, I probably the most compelling thing that I've heard and I haven't looked into the data enough to know this is real is that the basis trade is unwinding. And, you know, the CME is one of those marketplaces where it's quite big and there's a lot of Bitcoin there.

But, you know, I don't think we've even seen enough contraction there to really add up to what we've seen. So I think in environments like this in general, you have to be like very, you have to be very risk off and you have to be very conservative because the thing I've learned about Bitcoin is like it can always get worse. Like every bad thing that can happen will eventually happen. We all such PTSD. Yeah, which is good.

That's why we're survivors. So, like, in order to survive, you've got to have your head on, like, a swivel. And if you can't identify what's going on, then you have to assume, like, whatever the dynamic is, that dynamic can continue. And you need to put on the risk hat of like, okay, well, if this dynamic continues, if this price goes down another $10,000 or $15,000, like, who's at risk? Like, there's people who are at risk of blowing up. And you want to make sure you don't have your money, you're not, they're not your counterparties, they're not your custodies. they're not your custodians, they're not your lenders. Every one of us has been there.

I don't know if you have. Like, I've told my stories thousands of times, so it's pretty boring. But, like, you know, I was one of Voyagers, bigger creditors. One of my proudest moments was when I thought I had no exposure to Luna. And then I got the email from, you know, the CEO of ARCA saying that they were doubling down on Luna on the way down. And I was an investor in ARCA and almost puke. I was so happy that I had no Luna exposure and then got absolutely wrecked on that investment. You find a way in this market.

The risk manifests in ways you don't expect. And so, and, you know, the, I've also found that if you can identify, like, what's going on and you can keep and you can stay nimble, there's massive money-making opportunities as well in even the worst pessimistic environment. Like, as much money is made on the way down as it is on the way up. All of it's made. I mean, the true money is made by, you know, buying when you want to puke and then not actually people. when you're in selling right so or shorting things I mean like one of our best investments that we made at UTXO is like when when we knew FTX was was in trouble like we went and identified all the bank partners that are gonna have you

know basically a run on the bank as people are margin called and we shorted the banks and we shorted we shorted them to zero so sick the signature and Silvergate and so you know wow businesses I mean maybe not signature but Silvergate was a great business, and I respect to those guys. But at the end of the day, it's like, guys, if you're going down, like, it might as well be us that's making money on you going down and not, you know, hedge fund XYZ that hates this whole shebang. So, yeah, I mean, like, if you can identify what's going on, you can get ahead of it.

Huge opportunity. You can avoid it, but you can turn it into an opportunity. But it's interesting because you said in an environment like this, and I think when we're describing this environment, it's like, you have 50% of the people who think it's a 30% correction and 50% to literally think we're in the fourth turn. and Bitcoin's going to like 10,000, right? There's like, go in between either super bullish or super bearish here. But in the past, if you were saying this is a time to not take on risk,

for Bitcoiners, that would mean I'm just going to buy a bunch of Bitcoin and wait. This time it doesn't feel like that, it does feel like even a lot of the smarter people are afraid to buy right now because it might go much lower. It just feels different in that regard. I'm not, and maybe I'll be an idiot. I don't know. Listen, I don't think you can ever be an idiot for buying. Bitcoin unless you think that 126 was the forever Tom.

So, like, yeah, I can argue with people on Twitter all day because I share all my five who think I'm an idiot for buying at 88 or 95 or whatever. I think those are, yeah, call me, call me in a decade. Yeah, those are the same people who thought you an idiot at 10,000 and at 1,000 and at 500 and 100 and they're like, I'm finally right. Like, yeah. But with that said, it feels like a lot of people who are in my camp are not buying. Yeah.

Yeah. I mean, well, I think it's because there, there is so much uncertainty. as to what the catalyst is. And, you know, I actually think another thing that you mentioned it earlier, the four-year cycle, like, you know, I've been a big believer in the four-year cycle. Like this cycle, yeah, not anymore. This cycle, I just, like, from the trenches, like, the market structure has changed. The buyer has changed.

Like, and I think the four-year cycle is different. I don't know how it's going to be different, but elongated or maybe whatever. And, but there's still a lot of OGs that are, that are, that is the mental model. Yeah, they believe like, oh, I saw a Reddit post that said Bitcoin was going to top on October 6 and it did. I'm out, right? So I do think that's a big part of it. And, and I think like, okay, you know, it's very interesting. Like, if the four-year cycle is broken, then the mental.

model that people have used, like the biggest holders of Bitcoin have used to determine risk on and risk off environments, like that's broken. And now they need a new mental model to understand what's going on. And when you need a new mental model, like when you're in an unprecedented situation, it creates uncertainty. And when there's uncertainty, it's risk off. So it's like, you know, like I could see like this is like we're, this is the breaking of the four year cycle. It makes a lot of sense. And it makes a lot of sense because, yeah, it makes a lot of sense. And I thought about that a lot as well, but you articulated it well. I think for a lot of these people, if they've been deep believers in the four-year cycle and kind of just whether it was self-fulfilling or they just believed they knew where price is going to go up and down, now of a sudden you have to be like a 10-year, you know, to have studied macroeconomics for 10 years and understand the Japan carry trade and why gold's going up and silver's move and interest rate arbitrage.

I mean, these are just a bunch of guys who bought a lot of Bitcoin early and had the balls to hold it. they're not macroeconomists, and even the economists have no idea what the hell is going on, right? Like, look, I mean, the last two weeks ago or whatever, whatever, the stock market was 3% off all-time highs, and the fear and greed index for stocks was like four. It was like the most fearful markets had ever been, and they're at an all-time high. So nobody knows what the hell's going on. Well, you know, if you peel back the surface of the stock market, it's really just like the mag-7, and then the majority of stocks are actually down on the year.

outside of the mag seven so you know and it's given us an all-time high score but like it's not an evil even distribution across you know equities yeah i i um yeah i it's it's interesting it's like it is forcing people to evaluate what their what their worldview is i will tell you like the spin on it the bullish part is is like we've also been captured by the four-year cycle and like once we break the yoke of the four-year cycle and the four-year cycle now all of a sudden can become the eight-year cycle or you know like like now I really couldn't imagine something more bullish than us establishing like hey this is the new normal there isn't a four-year cycle we're gonna have enough year next year like if we don't need to assume that the next three years are going to be complete shit correct like if we have a bull market next year it's going to like send the bullishness for the next year like insane because it's like oh wow, like new paradigm, you know, it's not trading in four-year increments anymore. So yeah, but I mean, you got to have conviction in your investment. And I think, you know, there are a lot of bitcoins that are absolutely convicted who've

been around a long time. And then I think there's like there's institutional folks that do not share the conviction. They're just following the money. And I think there's also, you know, there's some OGs that didn't sell a dime and once they got over 100K and they're sitting on 10 billion plus they're just like okay let's start selling the person who sold that 100,000 bitcoins at 120k I forget how many exactly they sold they're looking like a genius right now so real good feeling real feeling really good especially if they're in a tax free zone of some sort right and I don't know 40% of that to the United States government I guess with all this in mind, I know we're kind of coming up on the end of time here,

but with all this in mind, like, the lessons you've learned in the last seven, eight, nine months since you've been doing all this, I guess, is there anything you would have done differently or more, I guess, directly? Is there anything someone who's trying to do it, you would advise? I mean, listen, you guys just stuck your necks out, right? So, like, all credit in the world, you couldn't have known what was going to happen until it happened, right? Yeah, yeah.

And listen, and I very transparently, I started buying. Nakamoto wants to drop below the pipe price. I was like, I'm doing better than these guys. Let's go. Right. And we'll see. Right. So I don't expect anything. It's a long-term investment for me. I don't flip stuff around. But if someone was starting this right now, would you have raised capital in a different way? Are there like announcements you would have not made? Do you think the SEC or even like we've heard rumors at the NASDAX not looking at these favorably at this point? Like, would you have not done a reverse merger? Would you form a new company? there's a million ways this could be done.

You know, I still have gone the pipe process. You know, to do the IPO, you still get to the same fundamental question of like, okay, well, what's the valuation at which you're raising money at? And, you know, like, you still get to the same crux of the issue. You know, we actually, when we did our pipe, our North Star was like, this is our all in bet. Like, we're rolling everything into this, all of our personal relationships, all of our capital, all of our businesses.

Like, this is all in bet. so everything needs to be structured to be maximally fair, uh, maximally transparent. We didn't take like a big Vig of the transaction to pay ourselves. We didn't like we, we like people like like you price the pipe too low. We price the pipe at the value of the money that was invested. If we priced the pipe higher, it would have just been a payout to us.

So it's not like there's not like some mechanism to like share the upside with like the public or whatever. So, um, so yeah, I mean, uh, uh, everything we've done, we've tried to approach it from doing it the right way. I think the, the lessons learned from the process are really, you, you need to have long-term aligned partners. And we could have raised one third less money. And the third we didn't raise is the third that sold right away. And we didn't really need that capital. And so like that actually just became a weight on the, on the, on the business. I think the other thing that we messed up and, you know, Hind

side is 2020 is like on the convert that we took like we locked in this convert that had amazing terms zero percent interest you know long three year time horizon etc but what we didn't appreciate was like the convert arb ecosystem and and you know even though the convert we took was didn't allow shorting it there there was the ability to syndicate the convert to other people and those people could short and so you know it's a very long agreement And that's a very tiny sentence in it that was the pivotal sentence. But if you're a stock that is like thinly traded and someone goes and shorts your stock for $500 million, like you don't have a seasoned enough cap table to support that type of selling. It's going to crush the stock.

You know, we're not our capital stack is not the same as micro strategy when they were a company that was a 20 year plus company that was public. and they had, you know, a wide shareholder base and could support that type of shorting. Like, you know, when GameStop does a short, you know, the stock trades down 5% because they have a robust, you know, liquid stock. And so that was like a dynamic, a market dynamic that we didn't really understand or appreciate. And I, you know, no one, we have great advisors. We have bank bankers, et cetera. And, you know, no one really picked up that that was going to be as big. of an issue as it was. And so like that would be some advice I would give is like when you're

looking at financing options, there are lots of ways to structure debt. And you need to take into account the nuances of the capital structure that you have in order to determine like what's the best debt approach. And and then I think the last thing I would give advice to someone on is like you got to understand and and maybe this is this like you know maybe this is obvious to other people but i mean i've been writing a private business since i was 22 years old like you know uh you know i i i have a certain philosophy of how i do business and that's what i've done for 13 years and i think a lot of people in bitcoin and crypto broadly have a similar philosophy wall street does not have that philosophy. And Wall Street does not give an F about anything but making money. And they will

smile and, you know, shake your hand and tell you whatever you want to hear as they slit your throat. Yeah. And, you know, the, like, you know, I won't call anything out specifically, but just, like, like you got to understand that you are not you are not the customer like you're not you're not the person everyone's trying to like make good with you're the product you are you are the prize pig being led into the sausage factory and there is a whole ecosystem of businesses that are there to make money off of you because you're a one-time thing and you know once you're gone there'll be another prize pig right behind you and they're kind of job is to just pillage as much as possible and and no one will really tell you the real no one's in the

business of telling you the truth about what's going on right you have to think completely independently and assess these things for yourself because you just can't trust all of the the inputs and then even further even if someone has good intentions the other thing I've realized from this process you know I've probably taken I don't know 200 phone calls with investors over the past three three months. Yeah. You know, if I were to take all of their feedback and advice and put it on a whiteboard, 50% of people would tell me you should do more of this.

And then the other 50% of people would say the exact same thing I should do. Yeah. And so it's like, okay, well, like, you know, these people, what they want is they want the stock price to go up. That's what they want. Literally everyone. Yeah. That they think it's going to help.

But it's just their personal opinion. And so, like, at the end of the day, you know, you can't just rely on people's personal opinions to direct you about what's the right strategy to do. You have to make your own assessment. You have to focus on the midterm and the long term. You have to be okay with just not having control over the immediate term. You know, it's funny, like, since launching, like, we've had a couple things that we've announced that I thought, okay, this is like really bullish news. The market's going to react super positively to it. And the stock's down 10%.

Correct. It's crazy. You know, there's days where we've done nothing, like our best performing day, we did nothing, woke up, we're up 20% in the day. And it's like, okay, like, you just have to like appreciate that. There's just dynamics at play and you just, you can't control them. So you got to focus on the medium to long term no matter how hard and painful it is. Yeah. And I think just like if the number one thing is like seek out people that are aligned and believe in what you're doing and work with those people.

And, like, it's not about what your stock price is today. It's about what's your stock price going to be five years from now. And, you know, if you don't have long-term aligned people, your stock price five years from now could be the same as it is today. Like, you know, like, you need to build the, exactly what Bitcoin did, exactly what micro strategy did. You build a diehard group of people that are ride or die on the strategy and business and who are betting on the team.

And anyone who's, like, not bought in, they can buy the stock later like they can buy the stock once we've gotten through all the hard stuff like the people you want the people who are going to hold who are going to ride with you you know during the hard stuff and so yeah of course yeah that's what i would optimize marriage yeah yeah that's funny way you talk about the bankers and all the people shaking your hand and stabbing you in the back it's like comes back to the coreitos of big boys don't trust verify right but you don't know till you know yeah no i mean it's it's uh boys the men like there are no boys that survive as the as the CEO of a public company so you just got to I don't know me

I will say on the flip side it's like as stressful as it is when you're winning at it like when you do good moves it feels so amazing it's just like it's like it's a very challenging thing and it's just the fulfillment that comes from like achieving something challenging and you know I I honestly I have so much respect for sailor. I mean, I've always had respect for sailor, but like after after going through the past three months of just like the stock price and the volatility, et cetera, and I look at like what sailor went through at a similar age when micro strategy was like the tippy top of the dot com bubble. And then, you know, what everything that followed after, dude, he has been through the gauntlet. Like he is, uh, he is an absolute Roman general. And, and that experience is,

what prepared him to handle the situation today. You know, other weaker men would be struggling right now with the amount of scrutiny that he's under. And he's just as calm and focused as a freaking bullet. I mean, it's, and that comes from that experience. And so, you know, you can't be a grizzly war veteran without going to war and, you know, battling it out.

So it is what it is. It is what it is. It'll be interesting to see where everything heads, man. I appreciate you. I take you the time. I'm glad we had this conversation. It clarifies a lot of ideas in my head. And I think you tend to have the right vision, you know, basically just zoom out. And I just can't imagine. I know as an individual how hard it is even to, I don't even have a portfolio tracker. I hate knowing so much, right? So I just deleted it so I can't even see. Well, I guess the CEO of a publicly traded company, I can't even imagine like waking up and wondering what the stock is every day or who's saying what. It just seems like. you really threw yourself out there. Yeah, I mean, true, but dude, you know, we've been doing this for a long time. Like, there's really nothing else in the world to do but this. And if I could do it all over again and someone said, hey, do you want the opportunity to have a public vehicle that has, you know, half billion dollars of Bitcoin and the ability to pioneer Bitcoin and the capital?

markets that's a dream come true and so yeah worth it yeah worth it and you know what i'm i'm in my mid 30s i turned 35 this year like i'm doing this next 30 years man i'm doing 50 next year well you have the heart of a 50 next year i have absolutely yeah anyway it's like the dj years you know you can't you can't do anything great that's that's easy it's got to be hard and and you know like we got to see this thing all the way through we got to see Bitcoin all the way through to hyper-bitconization. We have to see Bitcoin through until every central bank, every government, every corporation, every individual has it. And at this point, we just have to see it through because we've been working at it so long. You know what I mean?

It's like you can't start a journey, a quest. You know, the Hobbit would not have been published if Bilbo gave up, you know, before they ever made it to the mountain, you know? Like, it's just definitely never got into the Lord of the Riggs, right? So, yeah, the next generation. Good. Thank you so much, man. I really appreciate it. And I hope I want to have another conversation in the not-so-distant future once things stabilize about all of the things that Bitcoin Treasuries can do once this all kind of equals out. Yeah, any time. I think people are still confused as to how many innovations and products can come of this once things are normal. Yeah. Thank you, man. I appreciate it. All right. Chow.

Let's go.