The Wolf Of All Streets - The Real 4,700% Bitcoin Play Exposed! (Not What You Think) | Mike Alfred

Episode Date: September 28, 2025

Scott Melker and Mike Alfred to discuss the recent significant movements in the stock market, particularly focusing on Bitcoin miners and their performance. They explore investment strategies, the emotional fortitude required in public equity investing, and the implications of recent deals like Cypher's partnership with Google. The discussion also touches on the influence of China on mining and AI, Mike's new role at Bakkt, and the current state of Bitcoin treasury companies. They conclude with thoughts on long-term investment strategies and market cycles.

Today, I'm joined by my friend Mike Alfred, investor, entrepreneur, and now board member at BACT. Mike has had an extraordinary week from Iron's stock surging over 40x since he first highlighted it here on my show. You know, Iron is up 48 or so X, maybe a little less. And actually, the exact price was right around 280 in November of 2023 on your shelf. The major deals reshaping the Bitcoin mining and data center landscape to his new role guiding one of the most established names in crypto. There's some stuff, Scott, I'm a misstatement. tell you right now when you see it, you're going to be absolutely shocked. You're going to be like, holy crap, like I can't believe what Pact is doing. We discussed how miners are transitioning into

AI infrastructure. Turns out, Texas is actually a wonderful market. It's a great market to mine Bitcoin, but it's also a great market for AI. There's a lot of cheap, renewable power. It's a validation that Bitcoin miners can successfully transition. What makes certain operators stand out and where Bitcoin in equity markets may be headed next? And Bitcoin, as you know, has a tendency to do that. Looks dead, looks dead. And then you wake up one day and it just absolutely rip it. And so I think October, November, December probably be quite good. This is a conversation about conviction, patience, and spotting opportunities before the crowd. Is it fair to say that you've had the biggest week of any person in this space, maybe ever?

I don't know if ever, but it's been a pretty big week. I mean, you and I talked at the end of last week, and I wanted to schedule a live conversation and knew that there vaguely might be news coming. Maybe we can review some of the monster things that have happened. I'll go first and say Iron's share price, considering I have a chart that I show on my show where it has a huge arrow that says Mike Alfred told you to buy here, and it's like $2.50. 50 cents or something. Maybe it was three. Somewhere in that ballpark, last I checked, it was trading between $45 and $48 as we're recording. Yeah. It's a big move. 47 something. And actually

the exact price was right around 280 in November of 2023 on your show. I don't think that was the first time I ever mentioned it on your show, but that was one of the times where I like pounded the table and I said, look, I think it's pretty cheap here, right? Like this is what the company's building. This is a generational company, right? You've got to take a long view. You've got to survive a lot of volatility, but eventually it'll be a 50, 100, $200 stock. And I was saying that in Twitter spaces at $1, $2, and the kid analyst in there got so pissed. And they started trolling and I had to block a whole bunch of them because they were just clogging out my replies for months after months. But I don't know where those guys are now, but they missed a 47-48x

off the bottom. In crypto there, HFSP, I think the term is having fun staying poor. But listen, you had obviously high conviction. I think some people said he's on the board. It's, you know, obviously he has some motivation to tell you these things. But you and I had a long talk about it. You said it very publicly on the show. They were trading significantly at a lesser value than just the assets they literally held.

Right. I mean, their equipment and all of these things, they literally could have sold it off. been worth more than the market cap of the company at that point. So there was a clear argument there, but the fact that it's gone to the 40s, is that on the exact same premise that you had in 2023 or have other things come to light that have sent it so high, AI narrative, you know, data, Bitcoin miners effectively becoming data centers and that narrative. Was that all baked into your analysis in 2023 and earlier? Yeah, it all comes back to the physical infrastructure. That was the original thesis that the physical infrastructure would become dislocated from the digital

demand curves that included bitcoin that includes AI that includes synthetic biology includes high frequency trading you need a lot more compute to do all of these things and my view then as as i still have now is that the amount of physical compute that is needed far outstrips what's going to be available and so if you're an owner a large scale owner of this type of infrastructure you don't need to know exactly how it's going to be monetized in advance. You don't know exactly what news item's going to come out. You don't need to know exactly when the stock's going to go up. It's systematic. It's like being the house. It's like being the casino, right? You're going to have some variance day to day. Occasionally the gamblers are going to come into your casino and they're going to win against you

for a few hours or a few days. But over five or 10 years, you're going to make a lot of money if you can get people to come to your casino. And I view investing with a value framework, the long duration is the reverse casino where you're basically systematically guaranteed to win as long as you have enough patience. And I think it's not just patience. It's like emotional fortitude, right? A lot of people got churned out, stopped out, beat up, beat down, right, by two or three, 50% plus drawdown. So yeah, you look at it today and you say 280 to 47, that's a pretty good return. But like how many people actually stayed in? How many people didn't sell it the first time it went to 12 or the first time went to 15 or how many people didn't get stopped out multiple times, right? So you earn every dollar

and every percentage point of return that you get in public equity investing. And as I've said many times, I'll say it again, public equity investing is the most competitive game in the world. There's no more competitive game than public equity investing. And so it's not for the faint of heart. It's not for the kid analyst or the chart squigglers or people that are just tourists. Like you will not capture the excess return in a stock like iron unless you really know what you're buying. and you have the right emotional makeup to hold it. And it's really that simple. I held it.

Seemingly, all of my followers held it based on the comments because you came back repeatedly and continued to beat the drum, to be fair, and that's probably the reason. And a lot of my friends who we had conversations with are still holding it. So I think that there was high conviction based on the way that you presented that one. Interestingly, in the past, I think the market has viewed minors has a high beta Bitcoin play, right? It was sort of like leveraged beta to Bitcoin. Bitcoin goes up. Miners go up more. Bitcoin goes down. Miners go down more. And it was even hard to differentiate

between the quality of each mining stock. It seemed like they were all sort of following the same cycles or one would go and then the next would. It seems like this is really the first time since I've been tracking it that you're really seeing winners stand out. And it's happening while Bitcoin is effectively, I'll air quote it for those who are listening boring or sideways. Yeah, like the dispersion is really incredible. I mean, I was doing the math on the cycle returns and, you know, iron is up 48 or so X, maybe a little less for the full cycle since the bottom in late December. Micro Strategy is only up like a little over 20x now. And it wasn't that long ago that people are screaming on the Internet that if you're an idiot, if you didn't own micro strategy and you own minors instead.

And, you know, I tried not to be too harsh on those people at the time. And I'll try to resist the urge to beat on them too much now. But candidly, Scott, there are a lot of people on the internet spouting off about investing that don't really have any experience investing, don't have any experience with governance, don't have any experience sitting on boards, don't have any experience operating companies. And so I warn people all the time, like, you should use Twitter X as an entertainment device and maybe as like a reverse sentiment indicator. gauge. I was going to say, yeah. You have to be really careful about using it to actually make decisions unless you really understand the mindset and the psychology and the experience level of the people that you're listening to. But anyway, like a long way of saying at the bottom of the cycle, way back in December of 22, going into Q1 of 23, when nobody knew what iron was, right? They knew Mara. They knew riot. They knew HUDA, right? Maybe. They didn't know iron. They didn't know cipher. I called those two companies out specifically.

as probably the two best operators. And I said, operational excellence, this cycle will win out over hype, narratives, branding, marketing, overpriced CEOs, et cetera. And here we are, and that's exactly what happened. Myron and Seifer are the top two. We'll see where Seifer shakes out today. It's in a little bit of a correction because they're launching an $800 million convertible after their $3 billion Google Fluidstack data center deal today.

So I think long-term bullish, but short-term, it's putting some pressure. but it's an exciting time because if you actually are a stock picker, right? If you actually know how to assess these companies, you're getting paid excess return right now for being able to do that. Like basically skill is being rewarded, whereas other parts of the cycle, basically blind luck or, you know, foamowing in or yoloing in or whatever, right? Just like randomly picking stocks based on your favorite influencer. Like that kind of works during these sort of uninterrupted bull markets.

But it's, but it doesn't work. necessarily for the full cycle unless you're ultimately right about the fundamentals as you just said though maybe the most important comment was that bitcoin still hasn't done anything right it's still sitting at 111 like it looks pretty weak i think i think we're just seeing the end of the seasonal weakness in bitcoin and every single time this cycle starting in january of 23 where i felt like there was a dislocation or discrepancy between where i thought bitcoin's fundamental value is and where it was trading like within days or weeks that gap started to close so like I feel like we should be at 1.30, maybe 140 right now.

And so my suspicion is at some point in October, those numbers will seem like they're right there again. And Bitcoin, as you know, has a tendency to do that. Looks dead, looks dead. And then you wake up one day and it's just absolutely ripping. And so I think October, November, December probably be quite good. That doesn't mean, by the way, that the Bitcoin miners that are up 48x are the top performers, right?

Like maybe some of that is pulling forward future returns, right? But it is possible that that outperformance actually continues because, the catalyst that are driving a stock like iron right now aren't necessarily Bitcoin-related. In fact, it's the opposite. Like, the more successful iron is with AI HBC, the less likely it is to do more Bitcoin mining in the future. Yeah, I think that obviously these are catching a beautiful bid on a nice hype wave, but it's justified.

You just mentioned this cipher deal with Google in passing, right? Because it's kind of happening in real time. I'll say that that's prong two of might. Alford's good week. Prong three is going to be backed and we'll talk about that more. But right, obviously being proven right with Iron, but Cypher, how are you involved first with Cypher for full transparency? I'm not involved other than I own the stock.

Yeah, a lot of the stock. Easy there. Yeah, I know, but I know that you, so when you say you're deep in it when we're texting, it basically means you're watching price action and trading and babysitting your position. Well, I have a relationship with the team there to. Right? So I've been to visit the sites. Like when I'm in New York, I get lunch with the CEO. I regularly text with the CEO about different things that they're doing, questions I have, feedback, et cetera. So we have a very good relationship, but I have no official legal relationship. I'm not an advisor. I'm not on the board. Although some people may think. Somebody made a joke the other day that got passed on to me. They're like, oh, yeah, Cypher doesn't need to spend any money on marketing because they have Mike. which I thought was kind of funny. That's good.

You're a true advocate, but this is a huge deal in my mind. And I've only superficially read the headlines and I have not dug that deeply. In my mind, this deal with Google, which maybe you can tell us more about, but it really does solidify the narrative that Bitcoin miners are a lot more than Bitcoin miners and don't need to solely, you know, to depend on mining revenues to be profitable or effective companies. Yeah, I think, look, it's further validation of what's already happened. So keep in mind, Tara Wolf signed a very similar deal just a month or two ago now, two, three months ago. So it's a continuation of that.

But first off, for Cipher, it's specific validation of Cipher's site portfolio and Cipher's vision and Cipher's execution, right? So that's one. Two, it's a validation of West Texas, right? So the biggest criticism you'd get from hyperscalers over the last call it, year or two is that, oh, you'll never be able to build real data centers in West Texas. Like, you've got to go to cooler areas. You've got to go to areas closer to major cities. Like, you've got to be in the greater Washington, D.C., Virginia area, right? And this just sort of invalidates that. And that's what we've been hearing, right, at iron.

That's what I'm hearing in the market more consistently. Like, the demand for power is so insane right now that people are willing to go pretty much anywhere. And it turns out Texas is actually a wonderful market. It's something we've talked about for, two years. It's a great market to mine Bitcoin, but it's also a great market for AI. There's a lot of fiber. There's a lot of cheap, renewable power. So to me, it's a validation of West Texas. It's a validation of Cipher. It's a validation that, you know, Bitcoin miners can successfully transition. And for Cipher, uniquely, they have so many sites that they'll probably announce another deal, a similarly sized deal or, you know, another deal of substantial size, right, within between now

the end of the year. So to me, this is just like the beginning of a ramp for them because their site portfolios is so significant. And that's exactly what they've signaled. They've signaled that there's more coming. So I wouldn't view this in a vacuum and say, oh, look, today, the market doesn't like it today. And it's like, well, who cares, right? It's like $300 million a year of really high margin revenue. It's like $250 million of EBITDA. So like pretty substantial. Like if you value that at 10, 1520X, like you're starting to approach the company's market cap, and it's only 168 megawatts of critical IT load. 244 megawatts of gross, which leaves another 56 of optionality. And importantly on the call today with the Morgan Stanley investor call,

which I managed to get an invite to, he said that they're actually maybe going to plug in GPUs. So they're considering, like Iron does with the cloud, they're considering maybe following that approach. And I would argue that's the right decision. they do do that. They're one of the only companies that I think has the personnel and the skill set on the data center side to do that successfully. And right now, the demand is just insane and the margins are amazing. So as a shareholder, I hope they end up doing that. The United States obviously is woefully behind some other places in the world for energy infrastructure and future plans for energy infrastructure. A lot of that people point to,

obviously, the regulatory environment or lack of nuclear, all these things. But you see China I haven't looked at the numbers of late, but, I mean, seems like China has 10xing capacity versus the United States and already has probably more than 10x the capacity of the United States. What happens when China wakes up again or already is and says, we should do this again? Because obviously, you know, we know that the last cycle sort of ended on the Chinese ban on mining, if you believe that.

What happens when China comes wholesale back into mining because if they have a brain, they will? into bitcoin money i would imagine or these or competitive infrastructure like this with their seemingly unlimited electric capacity versus what we have in the united states or do you think that it's irrelevant to these companies i mean i think there'll be a player in ai but they won't be a player in ai for american companies or western companies generally right there's an ideal ideological separation now between china and the u.s and sort of related allies and particularly with AI, it'd be quite dangerous for American companies to host a lot of their models and stuff

on servers that are Chinese. So, like, they can do whatever they want in China, just like Alibaba and Baidu and Tencent, all these companies are quite good at what they do, Pinduoduo and China, like, but they're not necessarily going to be players in the U.S. market. And my suspicion is the U.S. market will be the most important market for AI as far as the I can see. So I don't can't really think that's a major issue. Even on the Bitcoin mining side, though, you know, I mean, they obviously had, you know,

Yeah, 50% of the network four or five years ago. Well, I mean, Bitmain was a Chinese company. BitDeer was a Chinese company. They're founded by Chinese nationals. They have significant self-mining operations using their own chips. So Asian suppliers are still the primary source of ASEX. I think Bitcoin mining, you know, is going to go through periods where it's very popular again when Bitcoin goes up. But I don't know if it'll ever experience the same kind of economic boom that you've seen in previous cycles because just systematically over time, it gets harder and harder, even at large scale, to be super competitive in that space.

It's just a brutally competitive space. So I think it's a great sort of grid balancer, right? It's like a load balancer at the data center level. If you have other sources of revenue like AI, but I'm not sure, I'm really not sure that, like, as a standalone by itself, there's going to be very much. many players left, call it in 10 years, that that's all they do. I think that data centers have value because there's always going to be a need for compute. I just not sure all that compute needs to be devoted to Bitcoin. But I do think some of it should be devoted to Bitcoin because Bitcoin's the only, like large-scale compute user that actually can be curtailed, like almost

instantly with like no negative effects, right? So I can turn off all my Bitcoin miners across my whole site in two seconds. I can't do that with an AI application because maybe it's powering Waymo, self-driving cars or Tesla or something, right? And like, imagine you're in a Tesla, it just says, oh, we got to pull over because, like, we don't have any compute. So, sorry, like, you're going to pull over and you have to manually drive the car now. So, like, with Bitcoin, it doesn't matter. Like, the network will be fine, even if a bunch of miners are curtailing in a given moment.

Which we've seen many times in the past. So listen, you called this 40x plus more on iron. You directionally were completely right on minors. What comes next in that space in your mind? more of what we're seeing now, but just bigger, right? So, like, I think iron has the potential to be bigger than Corweave, right, which I started saying a, uh, Morgan, was it Morgan Stanley? Somebody, somebody just sent me today or yesterday that somebody had raised their target to $70 something dollars on iron. Yeah, Bernstein. It doesn't seem like Wall Street's afraid.

It might be it was Bernstein. Yeah, it doesn't seem like Wall Street's afraid of, uh, this topping here. Yeah, I think Bernstein's at 75 and like a reed was there too. But like, the sell side analysts are always two or three years behind the curve of like really good by side analysts right so like my job is to i read their reports to see what they're thinking but they're always going to be two or three years behind right and so like it's not really that that valuable i don't really put too much uh basis on like what what those guys are what those guys are saying but look uh iron could be and i said this when iron was a billion dollar company and corewee was an 85 billion dollar company i said iron can pass core weave uh in market cap and

since then core we've come down to 40 something and then bounce back to 50 60 something iron's gone from one to basically 13 12 13 billion right some combination of stock returns and a little bit of a little bit of dilution in there as well right over time so so it looks a little bit more obvious that that's the case and the path to doing that is just to keep growing the cloud consistently over time and filling up those data centers with customers and I think iron has the skill set and the ability to do that. And I think others will try to follow. As I said, I think Cipher could potentially follow some portion of that strategy. I think CleanSpark potentially could follow some portion of that strategy. I think they're getting serious. They're the one of not the

largest Bitcoin minored in any given month, along with Iron and Mara and Cango and a couple of others, right? And like, I think that's going to be the story for the next year or two is like what percentage of your total capacity do you devote to AI? And then within AI, how much do you do co-location versus how much of it is going to be cloud. And I think iron right now is the clear like lead horse from a market cap standpoint because they've shown the ability to control the full stack, owning the land, the power, the infrastructure, the data centers, and the chips directly and then monetizing with an end customer. I think that's the highest revenue. It gives you the most control of the relationship. And so I suspect more people will want to do that too. But

they may find that they're a little bit behind now because, you know, Iron had a nice head start. Yeah, that makes a ton of sense. And do you think that it will remain somewhat untethered from Bitcoin price action? I think Bitcoin price action is going to really help all the names I just mentioned, partially because of Bitcoin's sort of a liquidity barometer in general, right? So like when risk assets are really ripping, right, when liquidity is good, when rates are falling, like if the dollar stays weak between now and the end of the year, if we get some

positive seasonality, global M2, et cetera, right? Like if all those things align, then Bitcoin going up is going to help all small cap equities, all growth assets, all risk assets. And keep in mind, like companies like Clean Spark and Iron and Cyper, they all have today, like if you remove all the capax and you remove some of the depreciation, right, and you remove some of the other sort of non-cash expenses, like they have pretty profitable looking businesses if they just stopped investing and let those businesses kind of run off. And, you know, Iron's already done that. I think the others basically are there, even if they haven't said it. So I think Bitcoin mining paradoxically, because everybody's slowing down and investing in it, when Bitcoin

eventually goes to 120, 1.30, 150, whatever, there'll be a moment in time where there'll be a question, like, should we pivot back towards Bitcoin mining? Because Bitcoin mining all of a sudden may be quite profitable. So it's more of the same. Everyone's going to get bigger. The best players like iron are going to get bigger faster with higher efficiency better economics etc but there are a number of other players that i think are well positioned to take advantage of this environment okay so let's talk about backed you were announced this week as a member of the board of directors correct correct what does what does what does that mean for the company and what is the company focused on now they were man i remember my early days that backed was going to be the

company that brought ice and bitcoin to the new york stock exchange and the institutionalization man they were so early so early i mean it was like four years or something before we started talking about micro strategy and such yeah yeah they they were sort of incubated out of intercontinental exchanged jeffrey sprecgers the billionaires collection of exchanges and data businesses and whatnot um and i think they had a vision to like bring crypto into to the mainstream via these partnerships with retailers and card companies and loyalty programs, etc. And, you know, through a combination of bad luck and errors strategically and tough regulation and, you know, they basically did everything the way Gemini did, which is like get all the

licenses and do everything correctly from the beginning. And as you, as you know, to get ahead in this space historically, you basically broke all the rules in order to do it. And you could have made the argument correctly is better to ask for forgiveness than ask for permission. Because if you had to ask for permission, then you were waiting while other people were just running circles around you. Like firms that were offshore like FTX and finance could do whatever they wanted with impunity for a while, right, until until things blew up and people ended up in jail. In fact, the CEOs of both companies ended up in jail, although one of them will be there a lot longer than the other. And so look, you're regulated, if you're a regulated entity, right,

like ice and you want to be in crypto like you're going to do it slowly you're going to do it carefully and so what did they do they just assembled the 50 money transmitter licenses right and all the infrastructure you need to clear and trade and use crypto but they needed the regulatory environment to kind of clear up and so what's happened now is the regulatory environment's cleared up right so we've got we've got genius and clarity and we've got all the stuff that's going to like open up the rails again and you've got this business sitting there trading at a really low valuation where the replacement cost of those licenses is probably some multiple of the market cap when I joined the board. Going back to the iron story, if you start with the balance sheet first, you underwrite

the balance sheet, you underrated the balance sheet of back correctly here at 220 or 230 or, you know, when I was in conversations with them, it was under 200 million. I estimate the replacement cost as some mortar magnitude higher than that. Because if even look at Elon must right now, He's trying to turn X into a super app. You know he's still missing some of the money transmitter licenses? He doesn't even have them in all 50 states because it's actually quite hard to do that. So anyway, we're sitting on these licenses. We've got the pedigree of ICE.

Ice is still a 30% shareholder. We're NSC listed. We're seasoned. We're not a treasury company that just did a SPAC or reverse merger last week. Reverse merger, SPAC. With a pipe that then's going to blow up your equity valuation and crush the shareholders. We don't have any of that. This is a clean, seasoned cap table.

We know what we have, and we're launching into some markets that are really interesting, like AI-driven finance, like stablecoin payments in 40 countries where we basically obfuscate away the complexity of stable coins, and people are just literally using a tokenized money market fund to basically send money instantly anywhere in the world. So you imagine like the disruption to the money transmitter, the traditional money transmitter business like MoneyGram and Western Union that are still charging five, six, seven, eight percent fees that used to be higher. They're just gouging consumers, and stable coins are perfectly tuned to disrupt that. But you need to create an interface. You need to create a platform that allows people to use them without having to use stable coins. As you know, if you force most people to use crypto, they won't use it. If you just give them an app that does it for them where they never see that it's a stable coin, but they're able to do exactly what they do through Western Union, then they'll do it.

And of course, there are a bunch of other things that, candidly, I just can't talk about yet because we've got our next coming up. the company's in a blackout window, but there's some stuff, Scott, I'm just going to tell you right now when you see it. I saw some of the, you're going to be absolutely shocked. Like, you're going to be like, holy crap. Like, I can't believe what backed is doing. And that's about all I can say right now. But, but hopefully you can sense my excitement. I'm excited because the asymmetry here is pretty extraordinary where like the market still views backed as this thing that signed Starbucks like four years ago or something. And the decks that I'm looking at right now,

like the pitches that we're doing and the deals that we're working on closing right now. Like it's you won't recognize. It's not your grandfather's backed, right? This is a different backed. And, you know, I joined the board to help on the crypto side, right? Because the board doesn't really have any crypto experts. It doesn't have anyone in the trenches in terms of like shaping narratives and public markets. They looked at what we've done at Iron and Canada, it's just a perfect match.

Because as they revamp the company, the new CEO is incredible, by the way. And that's part of why I'm involved is, like, he's a force of nature by himself. Like, I would not try to mess with Akshay. Like, Akshay will run you over. He's very smart. You used to work for Masa at SoftBank. He was a large NVIDIA shareholder when he was running his own fund, right? Like, knows AI almost better than anyone.

This is not the previous leadership, but back. This is like a kind of a new lease on life. And so I'm here to help assist him not only at the board level to make sure the board is aligned around, this vision, this new vision, but also to, like, clear the market in front of him so that he can operate. The stock went up over 40% the day they announced you on the board. 41% on 19 times the average trading volume on day one, 17% on above average volume on day 2, 16% on above average volume on day 3. And day 4, last time I checked, it had briefly gone green, but it's probably down a little bit. But it's sitting about 90% above.

the moment that it was announced. And I don't think that's accidental. I mean, it's a company that was spring loaded. It's coiled. It's sitting there trading at less than the value of assets because basically people had given up on the company and they don't really understand the current story partially because the CEO is relatively new and had to do some things to fix the cap table and fix the balance sheet. And so like he just cleared all the long term debt like a couple days before I joined the board. I joined the board. And now we'll be announced. in a successive cadence, a whole bunch of new stuff that the market doesn't know about. So it's, I think the market, with the market, it's not just me, right?

It is, it is true that I've had a decent track record with these smaller cap companies where I have been involved. But I think it's also just that people are smart enough to know that if I've underwritten it, like I had to look under the hood, right? So once I looked under the hood, I wasn't able to buy any more of the stock, right? So thankfully, I had bought a little bit before I even started talking to them. But once I saw what they were doing, I basically self. ban myself from trading between the moment they said you're going to join the band

and join the board and when I actually joined the board and now I'm totally handcuffed right because blackout window there's a all these forms of the SEC general counsel approval it's all the stuff I have to deal with that iron but it's worth the effort because if you could actually change the slope of the curve like you can help these companies inflect it doesn't matter that you can't trade you'll make way more money over time by making sure that these companies execute then you'll make trading around like yeah I could have made a a ton of money, if I could have traded it between 10 and 20, but that's not really where the values. The values, can we take it from 10 to like 200, right, or 500 or something, right? And remember,

it has traded there. The all-time high, split-adjusted is like $1,100 or something. Wow. I didn't realize it was that high. Yeah, it was, I mean, you've got to go back to like last cycle or the cycle before. Like, it was a while ago. But during the peak of euphoria about crypto, like it spiked to, obviously, in retrospect, completely unsustainable levels, and they've done reverse splits and everything to keep the stock price where it is. But it's pretty compressed now. As I said, I think given where the regulation is going, it's trading it probably, when I joined the board, definitely trading below the replacement cost of those licenses. Yeah, speaking of things that have had euphoric pumps, let's talk briefly about Bitcoin

Treasury companies and the current state of affairs there. Obviously, we had a, a already significant hype cycle that started, I would argue, in April May, right before the Bitcoin conference, I think. Obviously, micro strategy was first, but we know it's happened since. Well, most of these have come back to trading very close to NAV, some at discounts, some at slight premiums are right there flat. It seems like that interest has moved into the alt-coin market, interestingly. No, obviously, it's a lot of treasury companies seem to be the Envogue thing at the moment. What do you make of that entire trend and having dug deeply into all the facets of this market? Where do you see that going? Because obviously, you usually

have a pretty good gauge of what's coming. Well, as you know, I was bullish on micro strategy at the bottom of the cycle. I was cautious of micro strategy near the peak of euphoria last fall. And I've never really traded most of the other ones because I think everything after micro strategy is basically like a miniature clone without a lot of competitive differentiation. And by the way, Bact does have ownership of a Japanese treasury company. I think just real quick to go back to back, like the strategy there is to not put the balance sheet on, put the Bitcoin and Bax balance sheet. The strategy is only to go in geographies where there's some specific structural or tax reason why there might be value. And then to do so successful. Yeah. Yeah. And to do that

activity through not even wholly owned but just controlled subsidiaries in those other markets. So that is something that the company is working on. It's another lever of value creation. But look, they've all come back down, Metaplanet and Nakamoto and some of these others, they've all come back down. And I think a lot of people have gotten burned by that. I think you and I can raise our hand and say, yeah, we more or less predicted that. I think the difference was I didn't think it was going to crash the market.

look, these things have really, the errors come out of the balloon completely, and Bitcoin's still at 111. So when this period of time is over, and I think it will end soon, like I think actually some point here, they'll bottom out. Yeah, I'm buying knockout. Yeah, you said that. I don't know if that's just because you like David Bailey and you want to get invited to his events. Yeah, I think I'm, yeah, I don't think I'm that anyone over there is too big a fan of me after all of the criticism that I've given of these I can't speak to it specifically but no it's it's not that it's just that I think that I like trades when things are so irrationally beat down that you know there's a there's a bounce coming yeah I mean I don't know if knockomoters are rationally beat down

because I don't understand the structure well enough to say that I it could go to 60 cents maybe I don't what is that now 120 something so 125 as we're talking yeah yeah it could it could go lower before it goes up but I tend to agree with you I don't think there's that much more to squeeze out of there. And I still think Bitcoin's heading to 130, 140, 150. And if it does, then there's just going to be a moment where a lot of this stuff comes back alive again. And you look back and go, wow, how did everybody get so bearish? So I wouldn't be, I wouldn't be bearish on them here. I was cautious on them, as I've said for a while. But I wouldn't, I wouldn't be too bearish. And I think the concerning thing would be if they start to trade at really high

multiples again. The one comment I'd say just structurally is everybody shifted from MNAV, which I view as like a floating little ferry that like appears and like from the forest nobody ejaculated. Yeah, we don't know if it exists. We don't know like when it's going to show up and sprinkle fairy dust on us. So it's a fairy. So the the industry realized that it was ridiculous to treat MNAV like a real thing. So then they moved to this this new concept called Bitcoin per share, which sounds smart in theory if you don't understand how. capital structures work. But in reality, Bitcoin per share is meaningless if you have anything other than common equity on the balance sheet. Think about it. If I have common equity,

it's sitting at the bottom of the capital structure, right? Then I stack convertible notes. Then I stack preferred. Then I sit multiple rounds preferred. And then I have another revolver line, whatever, right? All of these things sit on top of common. And they have obligations, right, that you have to meet, like, for example, with a dividend. Right. And so those those obligations have to be met. Otherwise, there's no Bitcoin per share for the common. So to me, it's smoke and mirrors. And it's some combination of like being disingenuous and maybe a little bit of like magicianship. But smart investors shouldn't fall for that. Like Bitcoin per share is a completely meaningless thing. Again, unless there's zero securities on the balance sheet other than common equity,

in which case, how are you going to buy more Bitcoin? Right. So so like the entire model, the whole flywheel is based on stacking more securities on top of the common equity. So by nature, there's no way for Bitcoin per share to mean anything, or at least not mean anything real relative to the common equity or anything safe. And so like what I've said for the whole cycle is if you want Bitcoin, buy Bitcoin. If you want to try to outperform Bitcoin, make sure you understand structurally why it's possible. Like with Iron, my argument from the bottom of the cycle was simple that the value of the infrastructure on the balance sheet far exceeded the current holding value, right?

And it wasn't priced into the stock. separately when Bitcoin prices go up, if they go up enough, the cost of mine will be substantially below the market price, and that's sort of your margin, and your margin will actually expand as Bitcoin price goes up. That is not true for Treasury companies. They have a perverse and sort of different problem, which is that the more Bitcoin goes up, even though it marks up the value of their balance sheet, it also increases the cost they have to pay in order to acquire a new Bitcoin, which is their entire business model. So their entire business model gets more expensive to run, the higher Bitcoin goes up, whereas the mining business model, even though it was

unattractive for various points over the last two and a half years and people gave up on it and said, I was an idiot. Turns out it's actually a pretty decent model once you outrun the cost of mine by some substantial margin. So, look, I personally am not bullish on really any of those companies. I'm not selling any micro strategy, right, that I've, that I've had since whatever my cost basis is 30 bucks, average, right? So, like, it's still, I'm still up to. 10x on it. I was up a lot more, and I managed to trim some at 400, 450, 500, 535, et cetera, which in retrospect looked great. At the time, I was like, man, every day I sell and every day goes up more. This doesn't feel very good. But as you know, Scott, it never feels good

to make the correct decision in markets. So like you have to train yourself to be okay. You are offside. If it feels too good. If buying feels good, if buying feels good, look out below. Anyway, like, you've got to be uncomfortable. I think we're sort of an alignment on this. And I think the fact that you're buying Nakamoto means that you're not quite as bearish as you were whenever that was six months ago. Yeah. Well, it was 20 bucks and now it's a dollar 25. So listen, I know as we come kind of towards the end, you keep talking about 135, 140, 150 Bitcoin. Those feel like fourth quarter estimates and not tops. So I mean, how are you viewing kind of Bitcoin longer term beyond the fourth quarter and beyond 2020?

I think we've talked about this a bunch, right? Over the last two, three years, I've always tried to sort of probabilistically wait the potential cycle top as time progresses. And at the bottom of the cycle, I was pretty confident that the cycle top would happen in basically the back half of this year. I think what's happened is the institutional factors have totally changed the slope of the curve. And I also think, like in retrospect, when we look back at every previous Bitcoin cycle, the halving may not have really been driving things. as much as we thought. It could have been that the Bitcoin cycle was so tightly coupled with the liquidity cycle and with the election cycle and some of these other forces that we managed to convince ourselves that the Bitcoin mining having like has more impact on the timing of the cycle

top than it actually does. And so what I'm seeing when I look at macro right now is it seems like we're more like early cycle on macro, right? Like we're we're getting an interest rate cutting cycle. the dollar is still weakening like bond yields are sort of like especially in the long end are starting to come in a little bit which is nice like it feels like it feels like a good time right in the market might might actually be ahead and so I worry a little bit about extrapolating the previous cycle and assuming just because it happened on this timeline before it'll happen again so I'm now thinking that it's much more likely that if there is a so-called cycle top in Bitcoin at all that's like clearly recognizable in retrospect like I'm pretty sure that'll

happen in 26 or 27 now I think the odds of it happening in 2025 given how late in the year we are and how little exuberance there is about Bitcoin I just don't see it I think we could run to 150 maybe even 200 by the end of the year that's possible but I don't think that would be it I think if if we get to 200 in December maybe right but if we're only at like 130 140 150 in December my suspicion is we're going to go higher in 2026. And the last thing I'll say, Scott, is the A on this particular topic is like the AI KAPX cycle is going to elongate for the next two, three years, like all of the forecasts that I see show no top and AI KAPX spend until 2027 or 28. If you look back to the dot com bubble, which is sort of like the best large scale

equity version of what's like what's happened in crypto in 2017 and 2021, the Kappex for Internet data centers topped out just before the market did. So, like, you can see very clearly CapEx spiked all the way into 99, 2000, and then it plummeted. And so, like, just because something happened a certain way before, like, it doesn't mean it's going to happen the same way. Bitcoin and AI are very closely linked at the data center level, at the energy level. There's a ton of CapEx still going into both sectors. You just don't see major tops when there's a lot of Cap-X investment when there's a lot of IPOs, when there's a lot of M&A. And so it just feels third to fifth inning to me still. Right? There's no, there's no signs you typically see of a

seventh, eighth, ninth inning. And so I just think it's very unlikely that there's any top this year. I think people need to be patient and wait for actual real euphoria. What else is on your radar at the moment before we go? I'm buying, like, as you know, like the most boring stocks in the world that when they get cheap. The alcohol industry has been absolutely like, clobbered. Like it's trading like no one will ever drink alcohol again. And maybe there's some truth to that. Like young people maybe won't ever drink the way older people do. But I really like Constellation brands here, down here, the low 1 30s. It's trading it at 200 day moving average. It's trading at like a valuation level that you haven't seen since they originally acquired

Pacifica Corona Modelo. I mean, it's like it's ugly, right? But I like it. I don't think people are going to stop drinking Corona or Modelo anytime soon. And I think part of it is just the ice raids and the dampening of Hispanic sentiment, like a big chunk of constellations customers are Hispanic, like they drink Modelo and Pacifico and Corona. And so I think a normalization of Mexican relations as well as like a slowdown in some of this immigration activity and the narrative and also the action itself will boost that back up. So I've been adding like pretty heavily to it. And I like the fact that it's trading in the toilet right now. As you know, I tend to buy stuff like when everybody hates it. And then since my time horizon is two to

three years and most people's time horizon is two to three days, like I just, I win by outlasting them. So I buy Constellation here and I wait until the next recession when Constellation is the best performer in the S&P. Like I'm going to call this right now. Like some stock that everybody hates right now will be the best performing stock in the S&P the next time that we have a major drawdown in the queues major drawdown in like technology stocks crypto etc like it'll be the exact stocks that are being thrown out right now which to me are primarily staples in health care those are the two sectors that I know really well um so I'm also buying like some pharma stocks that like nobody cares about right now nobody in crypto ever wants to talk about but they'll all go like how did you know

to buy that two three years from now they'll be like I'm getting my ass kicked in crypto and I'm down 80% on my my crypto token and my whatever like how are you making money with alcohol stocks and pharma and i'm like because i bought them when you were still uh interested in like salano treasury companies right like it's it's the game as old as time and it just it's a cycle just goes around around around and a lot of people just seemingly operate without awareness that these patterns repeat and i just noticed the patterns and i take advantage of them but i guess you know that that makes me unusual mike always uh honor and a pleasure to sit down and chat it's been a good week i hope that

your good weeks continue and i know that my audience absolutely loves having this alpha so it's fun to sit down for a little longer and i get a recorded conversation once instead of waking you up at six o'clock in the morning to do it live hi man i love i love your show i love you uh anytime you want to do it we'll do it thanks man we'll run it back very very soon appreciate you