Unchained - Bits + Bips: Why It’s Time to Be More Bullish on Bitcoin - Ep. 827

Episode Date: April 30, 2025

While it’s been a calmer week in the markets (thank God!), there’s a lot to talk about! This week on Bits + Bips, hosts James Seyffart, Ram Ahluwalia, and Steven Ehrlich, along with guest Charles Edwards of Capriole Investments, dive into: Whether it’s time to be bullish on all crypto assets Whether a Trump put actually exists The risks behind bitcoin treasury companies like the new Twenty One Capital Why Solana ETFs might not be the smash success people expect The controversial invite to the White House for $TRUMP holders Why there’s a big disconnect in the markets Bitwise James Seyffart, Research Analyst at Bloomberg Intelligence Ram Ahluwalia, CFA, CEO and Founder of Lumida Steven Ehrlich, Executive Editor at Unchained Guest: Charles Edwards, Founder of Capriole Investments Twenty One: Recent coverage of Unchained on Twenty One:  Why Twenty One Capital Is More About Volatility Than Bitcoin Twenty One Aims to Buy as Much Bitcoin as Possible. Can It Succeed? Press Release: Tether, SoftBank Group, and Jack Mallers Launch Twenty One, a Bitcoin-native Company, Through a Business Combination With Cantor Equity Partners Does The Market Still Control Trump? Donald Trump’s chaos has left investors with frayed nerves 4 of the Mag7 Reporting This Week Big Tech’s Earnings Problem Is Estimates May Be Way Too High $TRUMP Trump's Meme Coin Dinner Contest Earns Insiders $900,000 in Two Days Other:  ​​Apollo slides Timestamps: 👋 0:00 Introductions 🧠 3:22 Is the market controlling Trump or is Trump controlling the market? 📈 8:51 Can investors trust it if there’s a positive earnings season? 🚚 14:13 How tariffs are hitting supply chains and consumer goods 🏛️ 19:25 Is Twenty One Capital a threat to MicroStrategy? ⛏️ 31:19 What is the future of bitcoin miners? ⚡ 34:42 Will the Bitcoin corporate flywheel eventually break? 🔥 43:31 Can Solana holding companies follow MSTR?  🇨🇦 48:19 Wen Solana ETFs? \Poor early trading trends in Canada 🤔 53:50 Is there a silver lining to $TRUMP? 📊 1:06:30 Bitcoin strength: time to be bullish? 🌍 1:14:24 Macro wrap-up with tariffs, rate cuts, and global market risks Learn more about your ad choices. Visit megaphone.fm/adchoices

I don't think I could be at this point where we are in the cycle, I'd normally be pretty conservative and quite worried, but I don't think I could have to be any more bullish right now, to be honest, given where we are and the data I'm seeing. Is that Bitcoin or broad risk assets you're talking about usually? Bitcoin, possibly other assets. Hi everyone, welcome to bits and bips, exploring how crypto and macro collide one basis point at a time. Today we'll talk about a whole bunch of different things from what's going on in crypto markets and other macro events. But for,

first some quick intros. I'm your host, James Safer, Tradfai Archmaister, Lord of Bloomberg's End, here with Steve Erlich, high scribe of the Unchained Kingdom, and Rahm al-Alawalia, Master of Wealth, leader of Lumida. Today, we're also joined by Charles Edwards, Sage of Strategy and Sovereign of Capriol. Noel Atchison was actually supposed to co-host with us today, but for anyone who's been paying attention to the news, there's a lot of power outages and issues going on in Spain, where Noel is based and a few other things. So unfortunately, we don't have her today, but we're lucky enough to have Steve join us.

So Steve, thanks for jumping on last minute. We're here to discuss the latest stories in the worlds of crypto and macro. Just remember that nothing we say here is investment advice. Please check unchained crypto.com slash bips and bips for more disclosures. Crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving crypto markets, written by one of the best in the business,

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Find the link in the show notes. All right, guys. Before we get in, Charles, for anyone who doesn't know you, why don't you give us a quick spiel 30 seconds to a minute or two about who you are, what you do, and then we'll dive into the topics of the day. Yeah, great to be here. So I'm Charles, founder of Capriol Investments and Ref,

so run a quaint hedge fund with the strong focus on Bitcoin. lot of Bitcoin strategies and on-chain indicators, which are open source in our website as well, Caprily.com. If you trade crypto and you want to acquire the lowest price in the world, you can check out ref. And otherwise, you can follow me in Caprioli, I.O. Most of my Twitter handle where I share insights and write newsletters about the market. Awesome.

Yeah. So let's just jump into like what? I feel like you, I don't know how long it's going to last that Trump will be the first thing and most important thing we talk about. Though I do feel like he has kind of taken a little bit of a backseat compared to what it has been in the prior shows. But basically, does the market still control Trump should be the first question? Like, is it the bond market, the equity market? What do you guys think about what's happened over the last week? I guess I'll go to your first, Rom.

I think the higher markets are, the more aggressive Trump is on tariffs. the lower markets are, the more Trump takes a backseat. It's like an energy value in the legend of Zelda or a video game of your choice, if that makes sense. Trump over the weekend, he did say that he believes that the public is underestimating the income from the consumption tax that he calls tariffs, and that they can use to potentially eliminate income tax.

So the unknown is what's the terminal rate of tariffs? But to your point, they seem to be taking a more constructive stance. And I saw a study saying that whenever Besson goes out to speak, markets on an average are up when Lutnik speaks, markets down when Navarro speaks, buy VIX calls. So tomorrow, don't buy Vix calls, by those a joke, but that means markets go down. But tomorrow, Besson speaking in the morning and then Lutnik speaking in the afternoon, looks like they have some outlines of trade dealers. that they'll be introducing.

And it seems like ever since the Wall Street Journal article that came out two weeks ago, where it said, worst April since something like the Great Depression, Trump pivoted at that point. And they put Besson as kind of the lead guy. So I still think markets are constraining Trump. And he needs to be competitive in the midterms. And his approval rating is extremely low. It's the lowest first 100 days versus any president. That's a predictive indicator of the midterm.

So, yeah, I continue to believe that he will pivot and he is pivoting. Yeah, I kind of pretty well aligned with that in terms of, I think the worst is behind us. So the Liberation Day, you know, we have these insanely high tariffs. I think we're not going to see rates like that communicated again. Obviously, they've been cut in half by at least 50% across. the board as a response to the market volatility. And I wrote about last weekend it is what I call the triple put, which is across Trump, Besson and the Fed where basically we've hit levels of volatility and market drawdown,

which there be this stepped in directly in the case of Trump with the political changes and dropping tariffs and that sort of thing. Or in the case of Besson saying that they, you know, are ready to backstop markets, if needed if things go lower. So yeah, I think that we've found that what their pain threshold is and the worst of that story is behind us and it's kind of like you said, navigating to some kind of end point for those tariffs.

But I think, you know, the pain of that is probably in the rearview mirror largely. Because Trump needs to see a good result, right? Over the next 12, 18 months. A little perspective here might be helpful. I mean, when he announced all those reciprocal tariffs on April 2nd, the markets tanked, and everyone thought that this tiger had kind of changed stripes. It took them, what, less than a week to reverse on some of that and put out the 90-day pause because yields spooked him.

And then it took, again, I don't know how many days after he scared markets again by talking about how he might try to fire drone. how, which was the big topic of discussion last week before he basically withdrew or folded from that idea. And so for all this talk that he's not immune to markets, it really didn't take that long for him to revert back to really caring about the markets. And we're in this kind of, like, just really weird state where I think Bitcoin's up 10%. I was looking since, since Liberation Day. Solana and some other tokens are up. people higher than that.

And most of the broad indices are almost back to even, at least since Liberation Day. And what kind of like living and dying with every single statement that Trump says? So James, when he might not be the lead story on this show, your mouth to God's ears, but I just don't see it happening anytime soon, unfortunately. But I think that we can really start to think that there is a Trump put because he's, all the evidence shows that as much as he says he doesn't care about the markets and that it's time for Main Street to eat and forget about Wall Street for the time being, that does not seem to be what's happening when it comes down to really standing firm. And the next place to look,

in my opinion, are all of the trade deals that we haven't seen a single one yet be finalized or even the framework for one, especially wrong with a major country, that even Besson's trying to hedge by saying nice things about China and talking about how those tariffs are. obviously unsustainable, which anybody with the brain would acknowledge as such, but even they're trying to hedge there a little bit, too. So we're going to be in this kind of wishy-washy period, but I certainly think that the Trump put is back on. He talked tough for a few weeks. He probably, he definitely still little from time to time, perhaps as a negotiating employee, so and so forth. But when push comes to the shove, he reverts back to his old behavior. The dynamic, the situation is still dynamic. I think

That's very clear. I don't think it's an all-clear situation. You know, earning season started, corporate buybacks, which are going to exceed a trillion dollars this year. They resumed this past Friday. So now you have some liquidity returning to the market. Big Tech is reporting this Wednesday. Google reported fine last week. I think that'll continue to happen this week when META and other companies report as well. So you can still get a significant rally with the uncertainty. Here's another data point. So Trump met with the CEOs of leading retailers like Costco and Walmart last Tuesday. We don't know the contents of that conversation. I'm sure the retailers said, hey, if you have these tariffs, we're going to have empty shells and that created a pretty stark picture in his head,

Trump's mind. But what we did see is that the retailers brought in new orders from China. So they're on their way. You got to imagine they wouldn't do that unless they heard it message from Trump saying that the end level of tariffs would be somewhere reasonable, maybe 25 to 50 percent or so. So that's an encouraging sign, especially because at the same time, we've seen container cargo rates drop 60 percent, which is a dramatic falloff. And it takes months for that empty cargo shipping to manifest in terms of lack of inventory. We've also seen TEMU and and shine increased prices substantially. So those tariffs are hitting, obviously doesn't touch a large part of the American market,

but you have seen price impacts from that. I don't think you'll really see movement on a China-US deal, though, until the G20 gets together in late June. China is slow walking this whole thing, right? They want a negotiator that, quote, respects China. They don't like Lutnik. They're being very patient. So I think there's a lot of potential narrative whip saw risk here based on the headlines that come in from day to day.

But earning season should be constructive for risk assets generally. I'm interested in the thoughts on earning season because I still wonder if we're going to get any sort of false bumps. I mean, like we saw with some of the hard economic data that we got last month. I know at four of the max seven are reporting. and there's going to be some effect from time to time, or I guess some effect on the bottom lines. But I know that analysts are expecting another pretty solid quarter, but that's going to run into what you just said, Ron,

about empty shipping containers and lack of activity of ports like Los Angeles. Actually, my first job after college was as a freight forwarder. So I used to be the one putting together those bills of lading and export documents and so on and so forth. So that's an industry that I have a lot of sympathetic. for. And I really, I'm curious to see how investors are going to play these results because good results or better than expected results may not necessarily be the best sign. We may still need to wait another quarter to really kind of see what's shaping up. Of course, by then we're going to be getting close to the actual end of the 90 day reciprocal period or pause unless

that happens, unless there's another one to get instituted between now and then. Yeah, two things. on that. I mean, Google, I mean, everyone was worried about how bad is Google going to be hit by, like, what's going on with AI? I mean, as a MAG7, they did pretty damn well in their earnings. Obviously, we don't have all the MAG7 reporting yet, but that would be my first comment. The other comment I would make kind of echoes everything we just kind of been talking about is, like, everyone likes to say the stock market is not the economy. But like, I'm pretty sure Joe Wisenthal, one of my colleagues at Bloomberg, is famous for saying, yeah, the stock market is not the economy, but it's also not not the economy. But it's also not the economy. Like the stock market is going to go with what's going on with the economy. Yes, a lot of the larger companies are going to do better than these smaller companies, if these tariffs are anywhere near the levels that we've been talking about over the last few weeks. But like it's, again, it's also not not the economy. And one of the things I also wanted to point out before we go, I don't know if Rom or Charles have any thoughts on the Mag 7 stuff is like, I don't know if you guys saw this report

from Neil Duda at Renaissance macro about like depending on who's talking on a given day. And like if Lutnik and Navarro are talking, the market is down like at a certain number of points. But like if Besson is the main person speaking for the administration that day, the market is up. And it's just kind of fascinating. And they're just like trumpeting sending, well, trumpeting was a, I didn't mean to say that. But I guess it's kind of fitting word. But they're putting they're putting Besson out there to go talk to markets on different days, which is absolutely fascinating. That's the Besson put I was talking about.

Yeah, the market backstop. Yeah. Yeah, I think it's too early to say in terms of earnings in many cases. Like we've got this 90-day pause, and then once that's finished, then you probably need another quarter at least once things are kind of leveled out to see where that will really impact earnings. And then, yeah, Mag 7 and larger equities, I think it's probably mixed bag. Some will probably be hit quite surprisingly, and then the lot probably won't have much

of an impact, I could imagine. So there's probably a bit of volatility in those numbers. overall, I'm constructed the hit is probably kind of push three, six months plus down the line,

I would guess. Yeah, there's this report about how people have accelerated imports. So, you know, there's inventory that's been built up substantially.

So I think that's what Steve was alluding to. The GDP numbers are totally misleading here. But there are negative impacts to even the max 7 from these tariffs. Here's an interesting stat

came from Apollo. So S&P 515. revenue from China is six times the level of U.S. exports to China. Okay, and a simple example of this is that companies like TAMO and Sheen are spending billions of dollars on ads on meta. Billions of dollars. Now that's, so meta in that case is selling digital ads of providing a service.

They're putting electrons on a webpage. There's nothing in a cargo ship. So it doesn't show up in the trade balance. Doesn't show up as a trade imbalance. And that's pure incremental margin and profit for META and for the S&P 500 and for American shareholders, workers at META, et cetera, right? But Tain and Shimo, because those tariffs are going to spend a couple of billion dollars less on META.

So I think this is a very clear example around how the current approach is very very old school mercantilistic. It's about goods. It doesn't reflect the digital economy where the United States has an advantage. Yeah. And then you get these large sweeping kind of exclusions like semiconductors and stuff. So it can be hard to predict, right, how it's going to all play out. I just have two quick small things.

One, Rahm, I don't mind if T-moon shine put up 6x price increases because, frankly, I wish that those products were not sold to the United States anyway. And two, I mean, James, just to kind of me paraphrase what Joe said, like, I bet a lot of people wish that the stock market wasn't the economy here in the U.S. But just frankly, it is. I mean, just look at how much of our spending is fueled by the exceptional quality of our dead and then just the premiums that are in our stock markets trade at, so on and so forth. I mean, I know everyone's been very impressed with how resilient, especially the wealthy and ultra-volta. been as far as spending through all of this to drive the economy forward. And if that goes, it's going to be hard to kickstart because there's nothing.

We don't have that manufacturing, like solid economic base. Like we had decades ago that could, I mean, that's what Trump is ostensibly trying to build, but that just can't be switched out like a car battery. So in my opinion, I mean, the stock market is still very much the economy, whether we like it or not. Yeah, and I saw a chart recently that the percentage ownership of equities by U.S. retail is like near or at all-time highs. So yeah, if any swings and equities, obviously, you feel wealthy or poorer relatively as a U.S. citizen, and that's going to impact your spending,

right? For sure. For sure. I mean, we have a financialized economy. Or if you look at the market cap divided by GDP, it's never been higher. There are real wealth effects out there. And by the way, Stephen, I agree with your point on Shine and Tim. I'm less concerned about that. What I am concerned about are small businesses that kind of have to snap, adjust their supply chains quickly. The big guys can't do that quickly, but at least they have the working capital and the cash to figure a way through it, and they can make a phone call to the White House. But interestingly, what you're seeing Timu do, by the way, is when you check out, they're showing an itemized import cost to the bill.

And so merchants are making it clear to the consumer where these costs are coming from. So they're educating consumers that this is a consumption tax. It's a sales tax. And it's paid by Americans. That reminds me of like the TikTok campaign to get every, it was like one button to send an email to your representative to not ban TikTok in the U.S. Yeah, that's that's very clever. It's also funny because a lot of the things you import from there, even if they do, even if they have like 100% tariffs, it's still it's still arguably worth it to import some of that stuff. Like my fiance, I know if her vac has ordered stuff from Xi and that is like $10 for a dress that would cost you $120 at any store here in the U.S.

And it's just kind of like, you know, highlighting. Like some of these stores are definitely ordering from these places and they're just marking it up in insane margins. So I'm also kind of fascinated to see like how much of this is passed on. the consumer, how much is eaten by the manufacturer, and whatnot. So I think it'll, no matter what, it's going to be a fascinating case study, wherever we are a few months from now. It's just my thought process overall. All right, let's move on.

Let's go to this new 21 company in the Salonah Holding companies. So essentially, 21 is, I guess for strategic partnership conglomerate, if you will, It's going to be a bunch of companies working together, namely Canterford-Gerald, which is operating a SPAC. And it's also going to be BitFinex partner with Tether, putting a bunch of money in here. And then you have SoftBank, which is just an, I'm assuming everyone listening to No SoftBank is one of the largest investors in the world, basically coming in and launching a company that's going to do everything, MicroSrategy or the artist formerly known as MicroSrategy Strategy, strategy has been doing. with a Bitcoin balance sheet, building a Bitcoin, building a Bitcoin per share.

It's going to run by Jack Mallors. Anyone in the crypto space whatsoever should probably know who Jack Mallors is. He runs strike. He was critical in getting El Salvador to start doing more things in Bitcoin. So it's a huge splash. Sailor has kind of said, you know, like competition is a good thing and he welcomes it. I mean, no matter how you slice it, I mean, micro strategy is so far and away with the amount of Bitcoin that it holds. But it's still fascinating.

So I guess before we even get to the Salana companies following the same playbook with Salana, there's been a couple of those as well. I'm just curious to get your thoughts on 21 and a company coming in. They're pitching themselves as a more pure play approach because they don't have a legacy business that are operating, which I kind of think is in my mind is actually beneficial to have a legacy business with differentiated cash flows. But maybe that's my small brain view of this. What are your guys' thoughts, Charles? Yeah, like I think we're starting to really see a bit of a flywheel effect in the replication of the micro strategy Bitcoin model where people are seeing how successful they were, especially in last 12, 24 months in issuing debt, arbitrageing the traditional legacy system and acquiring Bitcoin and then capturing Bitcoin's in a historical 40, 50% compound average growth rates of Kagar. So there's so many companies popping up like that.

meta planet in 1723, I think it is in Hong Kong and various other ones, SMLR, and now we're getting obviously this big player, 21 Capital. And I think this has obviously got some very big brand names attached to it, obviously softbank as you mentioned, and Lutnik being involved, you know, so the higher echelons of US power as well. So, yeah, it's pretty, pretty amazing that it's. happening and it's probably also a sign of the current transition of this current US government towards crypto versus the prior four years. But yeah, I think, yeah, there's so many

Bitcoin Treasury companies popping up and we're getting this flyable effect, which is also going to have significant impact this cycle. It's probably going to be the main driver of, I would say, price action next 12 months and how much we can kind of ratchet up basically from Bitcoin Treasury and company level acquisitions, just taking supply of the market and ratcheting price up. So it's pretty exciting part of the cycle, especially when you combine it with some of the other data. I'm looking at macro and technical wise. I think this playbook could get quite aggressive into the next six months. A couple observations. Well, one is, Jack Muller is a younger, very engaging presenter of the story around Bitcoin.

You know, you see him on CNBC and other places. And he knows how to tell a story. He's a very good evangelist in the same way like Michael Saylor. It's different styles. They appeal to different audiences, right? Michael Saylars appeals more to an institutional audience. And Jack Mueller appeals to kind of a sub 35, say, audience. In terms of the incremental buying power, it looks like it's going to be around 600 million or so, right?

So the SPAC that launched 21 has about 42,000 Bitcoin. That's a couple billion dollars worth. And it was delivered to the SPAC via in-kind transactions, meaning not open market purchases. And so it's contributed via soft bank, tether, BitFenX. So what matters is really what's the incremental amount? So they've financed with some debt just like micro strategy. I don't know the exact nature of all the debt finances and so forth. But it looks like there'll be about, you know, $585, $600 million in incremental buying power for Bitcoin.

So I think that's what you want to watch. It's a smart move for a soft bank, right? Softbank essentially they had Bitcoin marked at mark to mark. Now they've gotten the SPAC. Now the SPAC's going to trade at a premium to NAV like micro strategy. So it makes a lot of sense for all the people that contributed their Bitcoin in kind. And they're already in the money because the SPAC is trading into higher price now. So they should do the same game as micro strategy.

If your fair value is in excess, if your market values and excess of the net asset value, then you should issue shares, issue debt, and then go back. Bitcoin. I think the incremental amount of Bitcoin they're going to acquire is pretty hard to predict because you see like whatever it's shown as now. Yeah, they've got $3 billion raise and a large portion that's already as seen kind. But with the brand name of these players, Lutnik, especially SoftBank, they're going to be able to go to market and raise capital very aggressively.

And we saw with, you know, Metaplanet, much smaller, Mark's strategy. Metaplan, for example, I think they had 500 or 1,000 Bitcoin six months ago. They're at 5,000 now and expecting it to 10,000 by the end of the year. So they can kind of get to multiples of their AOM very quickly. We see micro strategy, obviously raise billions every quarter. So I do think a firm like this would have pretty easy buying power in the market, given the entities involved. So, yeah, a lot will depend on other factors.

too, like broader macro market, if Bitcoin keeps progressing well, as it has relative to the rest of the market last month, you're going to see more and more demand, I think, for these kind of products. And they could definitely raise, I would say tens of billions if they wanted in six, 12 months. But, yeah, we'll find out, I suppose. I have a few thoughts on this. I mean, I, for one, this was a call that I got wrong, I guess back when I was working at Forbes. I thought the micro strategy was going to suffer in the wake of the Bitcoin.

ETFs that started trading, I guess, about a year and a half ago. I really wondered why people would want to keep buying a stock that traded. I don't remember what the multiples were above nav back then, but why would people want to buy a stock that offers exposure to, ostensibly offers exposure to Bitcoin when you get it from Black Rock or Fidelity or one of these places that everybody knows and everybody trusts? And I was clearly wrong. there because micro strategy just went to the moon. And even though Bitcoin did well and the ETFs all did tremendously well, micro strategy did not suffer at all. I mean, they beat everybody. I mean, it really just, it's just a flywheel effect, but it's also in some ways like like the magic

money machine too, because like this all works great until it doesn't. I mean, they can only offer this cell, like these massive amounts of ultra cheap debt. as long as they're trading at these crazy multiples. And I think I saw 21 is trading at a 3x multiple right now to the Bitcoin it has. I mean, that's clearly unsustainable. I mean, I think that's just the euphoria of it watching it. It'll come down to some more reasonable level as we move on. But I really just, it's hard for me to wrap my head around all of this because in some ways this is sort of,

I can't imagine Satoshi thinking about all this happening when he created. coin 15 years ago or so and and these companies that are trying to to do this I really wonder what the end game's going to be I also James I mean the question you raised about doesn't make sense to be a pure play company like 21 says it is versus one with the legacy business I mean micro strategies business software are business software business I mean I don't know what to contribute to its bottom wide but it's probably pretty close to de minimis by now I mean I did a story one of the last stories I did at Forbes was on the the micro strategy copycats like the

of scientifics and meta planets. I mean, Semmelar actually has a real business. They actually have a real product. It's a device to detect some sort of coronary disease. I mean, something that actually is really cool. I forget all the details, but it's something that's like multiples cheaper and faster than what was after originally on the market. And it actually seemed like a pretty important product to me. Metaplanet was basically a hotel business that decided to just become the micro strategy of Japan. And I think they keep one hotel open. And I think you also profile one company called Genius Group, but I forget where they're based somewhere in Southeast Asia. They have some sort of AI learning platform.

But I mean, I don't want to call those other businesses shell companies because that's not what they are. I mean, I guess they are still trying to give the old college try. But I really wonder, like, how investors treat these quote-unquote legacy businesses and what are the type of value they get from it? Because at this point, they all seem like they're just care about buying Bitcoin. And they'll try to keep creatively using capital markets to do so until the capital markets aren't interested in supporting, basically what they're doing is making bets four years down the

line, but they're could be able to convert into shares at very advantageous prices. Yeah. My only comments on that would be, I think it's probably like SMLR, similar and Metaplanet, kind of similar to micro strategy, and that when they started, the valuation of the company was sort of close to what you'd expect based on their technology business. but now for market strategy it's insignificant like don't quite mean the number but around one two percent kind of those kind of ballparks and with similar their the nav of their bitcoin is it last time I looked in the last few days anyway was basically one to one with their bitcoin

holding so they're already kind of valued at parity with their bitcoin and I think that's relative to these other companies you mentioned which are at two to three multiples that's a pretty good kind of relative opportunity especially if they can keep acquiring Bitcoin And people are just kind of investing in that opportunity for them to arbitrage those tradfine markets and their long-term established public relationships on those stock markets to deploy capital and grow the Bitcoin per share. So I think those models can continue as long as Bitcoin remains steady and more or less increases as it has in the last few months. As you said, if there's big doodowns in the Bitcoin price, they get these assets going to get destroyed like Mark's strategy did. 2022 was down a lot more than Bitcoin as well. But I don't think those huge drawdowns will be as bad in the future.

And the more entities doing this, it is kind of that flywheel effect, I think. So, yeah, obviously it can't go forever. But I think these individual entities that are doing it now can grow their market cap substantially and the baseline of it into the future that have already started. I think one other small thing just worth mentioning in this discussion is I guess the unintended consequences what's happening to Bitcoin miners because their stocks in particular because I mean micro they used to trade sort of like micro strategy as just a very high beta play on Bitcoin. They would go up when Bitcoin went up and they'd go down when Bitcoin got down.

But Bitcoin miners have just been getting crushed recently. And I came out with a story on this about a week and a half ago about the impact on the tariffs and what that's going to mean for their business. And the ASICs that they have to import from a lot of them are made in China, but they're tranships with Southeast Asia. I mean, they're almost converting to the micro strategy playbook because it's in some ways it's almost too expensive to mine. So with all these new copycats coming up, and I mean, if you're an investor trying to diversify away from just spot Bitcoin or an ETF, are you going to put your money into 21 with these brand names and this close association with the administration? Or are you going to put into a Bitcoin miner that is facing extremely difficult.

economics and and these guys are the engines of the entire Bitcoin economy. So, so in a way, I mean, I'm not going to call them on Sun Heroes because they're still multi-billion dollar companies, but they're facing like very, very challenging times. And when I, when I reached out to pretty much all of them for the story, I mean, half did not respond to requests for comments. Many said they're just trying to figure out what to do. None right now have shipments slated to come in after July 9th because they're worried about the tariffs.

So they'll have exclusions. you roll out exemptions. Bitcoin played such an important role in his election. As soon as that becomes an issue, David Sachs will drop an executive order, slide it across Trump's desk, and then that issue will go away. Do you think so?

I mean, I guess you put out card apps for every industry you want, and the one, I guess, Trump card, for, no pun intended, is that the Trump family is not involved in Bitcoin mining. But I really wonder if, I mean, near and near to us, but in the grand scheme of things, Bitcoin mining is a small business. Yes, I agree with you, Stephen. Mining is a very difficult business. I've looked at it a lot over the last six, seven years, and every year I've looked at it and done different modeling on it.

And there was never a scenario where it made sense to buy a Bitcoin miner versus just buy a Bitcoin outright at that point in time. when you factor in all the costs, the depreciation, the need to rebuy miners, the growth in hash rate, more competitive mining, et cetera, et cetera. It's an extremely hard business. I think before micro strategy came along, mining was a great opportunity for companies and other entities to gain access to Bitcoin through equity markets, but then that kind of shifted to these treasury models, like you're saying. And now you are seeing some miners adopt those treasury models as well to try and help

with their, you know, their financials, essentially. Probably, yeah, we do see some Trump support. I saw some videos as well, whether they're going to help and grow mining to some extent, whatever that means, and help investments in the space, and that will probably happen to an extent. But I think, yeah, it is, it's always going to be a challenging model.

It's just more and more competitive every year as the equipment gets more efficient and, you know, people will just optimize on how to mine. It's not an easy business. So I'm going to share my screen real quick. This is the when strategy has its debt coming due. So the near one is 2028. And the largest one, which is about $3 billion is $2,29, almost $3 billion again.

You get the point. And like, we're talking about right now. And I don't remember exactly who said about one of you referred to it as a flywheel. And I like, that's the way I see it too. It's kind of this flywheel. But like, this can go to the opposite direction as well. Like this has been a flywheel propping up Bitcoin price in many regards. It's been a buyer when and, you know, pushing the price even further.

And now strategy specifically owns a ton of Bitcoin. And sailors, I mean, no matter how you slice this, even people who don't like Bitcoin are like it's kind of genius. Like he's just acquiring a budget of this, using the volatility of the stock in a way. He's like, you know, monetizing the volatility of his stock and the volatility of Bitcoin. And it's from a financial engineering standpoint, it's kind of genius. But like at the same time, at some point, this could very much. much go the opposite direction. And like, when does the market get saturated, right?

Like, so we have strategy. We have 21. We have similar. We have all these other ones we were talking about. Maybe it matters for like one in one specific region. But like how many companies can do this before like, I don't know. I guess the only way it keeps going and there's no issues if Bitcoin just keeps going up in price and they can continue issuing debt to buy more Bitcoin or or at least roll the

debt or who knows exactly how it'll work out in the longer term. But I mean, it's going to be fascinating. I would just say like this, this is obviously not the same idea as like the GBTC premium. So like for a long time, gray scale GBCC was trading in a massive premium. And I'm not saying these are the same things. But like the kind of like what I'm hearing about it kind of echoes it in the sense that like it can only go up. This thing's trading at two X the underlying Bitcoin. Like what happens when it starts trading at a slight discount to Bitcoin?

When I brought that up about GBTC in like 2018, 2019, I have never had more vitriol in my Twitter replies than that time. my life. So like this is kind of like anytime you bring up the potential for the flywheel to start spinning in the opposite direction, you like everyone just keeps attacking you for like, you don't understand how options work and all these things. And I'm like, uh, if Bitcoin price goes down, which we know it can, it could definitely spin the other direction. So I guess what do you guys think about that concern? Like, do you think that's a legitimate concern for, um, negative feedback loops? Um, you go soon. I was just going to say that I think, uh, at some point in the future, like, these premiums are unsustainable. I mean, I almost look at it in the same way

as the convergence between a futures contract and the underlying spot. Like, we don't quite know when that maturity is going to be, but I mean, just efficient economies, there's going to be enough entering the space until there is some sort of equilibrium. I mean, clearly micro strategy. And I think sometimes it's hard to appreciate how much he has bought in the last, I know, a year, year and a half. I remember doing interviews about him when he owned 200,000 Bitcoin. Now he owns, what, over 500,000, all sustained through like all this zero coupon debt. But I mean, I could definitely see a trading under NAV, but if nothing else, at some point in the future, be it five years, two years, 10 years, these companies will have to trade it. At NAV, it just efficient market hypothesis would

would dictate such. So then what do investors do? I mean, you try to ride this out as long as you can and get out before the music stops. There's a technical reason why I could trade above in at NAV. So convertible debt investors, they're constrained, right? They can't buy equity. But with micro strategy, they get equity-like returns through a debt feature, and it suits their mandate.

So there's a certain technical reason why there's a bid explained by the fact that they're wrapping Bitcoin with the bond. That said, yeah, I think the point stands. There's no beyond that, you can imagine what micro strategy trades below NAV in the same way that there's a gray scale trusted, right? We had ETH and GBTC trade at 30 to 50% discount to NAV during the 2022 bear market. So it's possible. It's hard to see new players deploying this type of strategy, right? You have micro strategy. for institutions. It really was kind of for a lot of retail and institutions.

Then Mahler's here with 21 for the retail crowd. But to really build this, which type of company would want to do this? You could be an unprofitable company in the Russell 2000. It's about to die. I could see those companies trying to do it, like Long Island blockchain. Remember that? Like it's a way to get a bid for their stock price. Like, hey, this isn't going nowhere.

But why would they attract capital? They're not going to have the right security in place. They're not going to have the right data arrangements in place. It would be like a, it was just fade. So I don't know if there's much room to do many of these kinds of things. Obviously, if sailor were here, he would say, well, no, the treasuries all need to accumulate Bitcoin. But that didn't work for Microsoft. I really don't see that taking off.

And Elon experimented with that. He's not really doing that. They still have Bitcoin in the balance sheet. But yeah, I think the point stands like it is this kind of flywheel dynamic until it isn't, right? And as long as the premium is greater than the NAV, it works. But if that premium goes away, then the bid goes away. Yeah, that also happened for Mark's strategy in 22. They were below Nav for a while.

They were, okay. Yeah, yeah. But it's very well said in terms of the opportunity for the bond market, right, where they can't get exposure to the return profile of Bitcoin, but they can't. through these products. And I think until we see those raises by market strategies that are not getting fully sold out or, you know, raising the, you know, increasing the cap of those, those raises, I think we're still a bit of a fair way from saturation.

The other factor, I think, is international markets. So having products like Mark Strategy on, say, G20 equities markets, right? some of those countries can't invest in market strategy or in US equities, they can only do it locally. So if they have a similar product, it obviously won't be maybe as big as market strategy, or maybe it won't have as much capability to raise as market strategy. But having something like that on each of the major markets kind of makes sense, I think. So I think there's still a pretty big way for this to run, you know, provided risk assets generally hold up.

I think this is a fair way from saturation still. one point I're just going back to the I think there's also been a bit of one thing I give Michael Cielder a lot of credit for is the fact that his Bitcoin is largely I'mumbered I mean that's one of the real reasons why his his liberation point is somewhere in like the teens I wonder though the temptation is going to be there especially if the file starts to slow down for companies to use the Bitcoin on the balance sheet creatively, to create additional yield, lend them to trading desks, and do all the things that led to all the bankruptcies and fraud of 2022.

I think that because Michael Saylor has been so diligent and orthodox in just holding onto his Bitcoin and not doing anything with it, that many investors feel that every other company is just going to do the same thing. and I don't see that as necessarily being the case. So for anyone looking to buy these companies, I mean, right now when the price is going up and everything is great, it's easy to just say buy and hold. But at some point, the temptation is going to be there to try to generate yield.

And that's going to lead to a lot of governance issues. That's going to lead to some hard questions. And if there's associated risk with the downshed, that could also potentially lead to trading under NAF too. So that's just one thing that's been a little bit. Yeah. I mean, I think it's a stated goal of theirs to basically become some sort of a Bitcoin finance company at some point down the line. So, keeping in this thing, I actually tend to agree as well.

It makes sense that you can have one of these in each market, like you said, Charles. It kind of makes sense that, like, people who aren't going to hold this directly might want a way to get exposure. Sailor constantly talks about he's basically taking the voltage and amping it up for equity holders, dialing it down for debt holders of the microstit strategy debt. It all makes, like, it logically, it makes sense. I just worry that, like, things can sort of spend the opposite direction. I guess so my question is, so we talked about, like, it makes sense we can have one everywhere. What do you think about, like, we have two now Solana strategies that are doing this.

We'll probably get an Ethereum. Maybe I missed it. There's an Ethereum one that's been announced. I know they were talking about it on our sister podcast, The Chopping Block, relatively recently with David Hoffman. But, like, so you have now two companies doing this Salana. Like, are we going to have a company in every country? doing this for like every crypto asset? Do you think that's where this goes?

Of course. All permutations will be solved for in every variation. It will multiply to infinity until it's totally saturated. Isn't that what crypto does? It multiplies and expands and fills out every possible niche. And then the storm comes and washes away all the barnacles. Yeah. That's a good summary.

Yeah, at some point there's going to be a huge bear market in all these products. But I don't know, I see all the alt stuff, Solana, ETH, whatever. It's kind of similar to the ATFs. It's just, yeah, there'll be some uptake, but it's the side show, really, of what Bitcoin is this cycle at least. It's the corporate and government level narrative for Bitcoin that's driving a lot of this cycle. Alts really have just majorly underperformed way more than I expected as well over the last 12, 24 months. And I think that's probably the narrative for this cycle. It's just people want the hard money, security, and the company, corporate, government, equity level, that is Bitcoin, not Alts.

I'll tell you what, the time to have done the Solana holding company was last year when pumped out fun really got going. I can only imagine what those returns would have looked like. but I'm really curious to see what's going to happen with the salina companies in particular for a couple of reasons. I mean, for one, when like micro strategy existed, I mean, I know the Bitcoin mining companies, but there were no ETFs. James, I mean, you're the expert on this, but I would imagine that all these Salana companies are going to be competing with an ETF somewhat soon. And I don't actually, I don't even know if there's going to be staking those ETF applications or not. so I'm sure you could fill us in on that. But they have that,

they're going to have that extra added competitiveness that the Bitcoin companies did. And as far as I can tell, there's no one at, and there's three salient companies that are doing this. I don't think there's any of them to have, I mean, nowhere near the charisma and just like the brand awareness of a Michael Seller

or even a Jeff Mahler. So they're not going to have that necessarily going for them. And then I really too wonder, I mean, I don't want to devolve this into a conversation about the future of Solana. I know it's been more ascended vis-a-the-etherium. But I wonder what Solana's next stage of growth is going to be.

Is it like tokenization? Is it defy? Is it whatever? Because notwithstanding the Trump leaderboard meme coin thing, which I think is utterly ridiculous, I mean, it's coming down off of the euphoria of the meme coin craze from last year. So if people are going to buy into these companies, what is the narrative that they're buying into?

Bitcoin. Bitcoin's digital gold narrative is strong and resilient and has a long duration. So it's a great question for Joe. I can show back next week. Ask him that. Yeah, that's a good point. Joe would be a great person to answer that question. I'm sure he has some very strong thoughts on it.

Rom, nice Bloomberg Cup. Nice. Thanks for the company show. My wife is from Bloomberg. I have a lot of roads. I know. One of my lead investors is Arthur Levy. He's on the board of Bloomberg.

It's a lovely. So I've got Michael Bloomberg's auto buyer from my bookshop, by the way. Me too. He's an extraordinary. Going back to what Steve was saying as far as the ETFs go, that brings up a point that I forgot to mention before we were talking about. I also agree with you. I really thought the Bitcoin ETF's launching were going to hinder or at least hamper a little bit, the micro strategy demand or strategy demand, maybe hit the premium a bit. It kind of did the exact opposite.

it like it like created more demand and it kind of goes back to like how the strategy kind of works like sailors almost forced to buy when the market is euphoric like he always buys at bad prices but it's when he can get the best deals because it's when there's the most demand for his stock everyone's buying his stock or maybe the debt and like that's when he can buy bitcoin and it tends to have coincide with peak so if you look at a lot of his big purchases it's like if he just did some like dollar cost averaging over a few days i don't know why they don't do it it probably would have gotten a better price action. But as far as ETFs go, yeah.

So it's possible we could see Solani ETFs launch sometime in like a July or August. I think they're going to be improved, like almost. We're very confident, like 80 plus percent confident they're going to be approved this year by their deadline in October. Will they have staking when they launch? That's a different question. I will say we have five Solani ETFs that just launched in Canada that do have staking. So I've been looking at those. Ironically, the interest hasn't been that great.

They have like $100 million U.S. dollars in them across all of them, and one of them was seated with like $60 million. So 3 IQ has the most assets last I checked. Ironically enough, we have two Salana derivatives ETFs, one that's just regular exposure and one that is 2X exposure. And then like three weeks later, we had an XRP ETF launch. Again, it just holds derivatives, not spot. and it's a 2xx-XRP etf.

That ETF has way more in assets. It launched almost a month later. It has significantly more trading volume. It has garnered way more in flows than both of the Solana ETS that launched earlier. So that's one interesting thing. What's the demand going to be for these different all coins? And I won't say this because the spot products are going to be where most of the demand is. But there's some definite heavy trading demand.

Like the 2XXRP ETF, which I was kind of surprised by, is doing, pretty well. So it'll be interesting to see where all this shakes out. But again, like, I don't know that the ETSs are going to take away from the demand for this because it did not happen with strategy. The exact opposite happened. It was like it created more demand and interest and sent that flywheel spinning faster as far as I'm concerned. By the way, great comments coming in from Sean on the Salana thesis. I'll recap them briefly here to kind of do right there. But, you know, the vision for Tolly has always been that slana is like the decentralized NASDAQ. It moves fast, great user experience, a permissionless environment, and an emphasis on applications

rather than solving for all the infrastructure in terms of product roadmap. So, yeah, decentralized community, decentralized apps, and fast frictionless trading. That's the that's the slant of pitch. Yeah, increased bandwidth through slatency, right? Like, that's the whole pitch. Right. So, Charles, do you have any thoughts on any of this before we jump? Because we should talk about the meme coin that Stephen brought up, but we can go to that next.

No, just with the XRP ATF, when did that launch? What was the date? You said, the successful one? I mean, it's not like, it wasn't successful in the way that, like, the spot Bitcoin ETS were successful, but it's, but it's doing pretty well. I think April 9th or something. Yeah, yeah, yeah. Because I think there's been a, you know, XIP has done incredibly well in the last six months. on the back of the Trump presidency,

and it's kind of traditional view as the tradfi alt, if you will, whether that's true or not. I think a lot of people will perceive it. Even people who aren't involved in crypto that much perceive XRP as this kind of legitimate financial tradfai equivalent of an alt coin. And I think that,

and then on the back of Trump's meetings with a lot of these players, you know, XRP is completely rallied. So I'm not, I kind of not surprised that the ETS done quite well, at least in the early stages. And it may do well this cycle as well. But yeah, I don't know. You know, I think, yeah, as I said before, a lot of these alts will be a side show to Bitcoin this cycle. If the cycle gets out of control and we get to 150, 200K plus later in the year, then, you know, you're going to see all sorts of old coins and narratives popping off all over the place.

and some will do insanely well. It's just super hard to predict right now where those plays will go. But yeah, so we'll see where it all rolls out. There's a rally around kind of Bitcoin. People are focusing on Bitcoin coming back to the center. Alex Thorne from Galaxy, friend and previous guests of the show, made the point that the U.S. government would have some kind of transaction to buy Bitcoin, even if it's token and not a material amount,

but symbolic nonetheless that they would find a way to have a purchase of Bitcoin that doesn't come with the taxpayer's expense. We'll see how they do that. But yeah, I agree. I mean, the story is really around decentralized international money. If you think about what's happening in terms of the geopolitics, right? There are doubts around the U.S. dollar. Europeans are repatriating capital.

China's strategic plan is to become the next global hegemon. So, you know, there's increasing focus then on a decentralized money, which is how Larry Fink from BlockRock, you know, articulates the case for Bitcoin. Yeah. Real quick, I'll just chime in. So the 2XRP, TFL is talking about, it only has like 50 million in assets, but it's grown pretty well. And I was off by one day and launched on April.

But it's so it's just kind of something we'll need to watch and see when these things launch. But yeah, we possibly late, late summer is when we can start seeing some of these all coin ETFs, I think, if we're up from a spot basis, at the very least we'll see them approved probably in October. Let's move on to the Trump coin announcement. I don't know if you guys have any strong thoughts. I wasn't on last week, but the week before I made a joke about like next week the the Trump coin is going to unlock before we locked out.

I was like, I wonder how that's going to go. And I guess I was wrong because Trump at the same time basically announced that if you were a top, what is 200, 220 holder, you get to have dinner with him, which coincided ironically with the unlocking of those Trump coins around the same time. So I'm curious, like, what are your guys' thoughts on this? I mean, my kind of, my first initial thought, and I never liked him launching a meme coin to begin with. And then the other part is what do you guys think?

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Find the link in the show notes. All right, guys, we're back. What are you guys' thoughts? Rom, you were like smirking when I was talking. What do you have any strong views in this? How do you analyze that from different perspective? There's the, you know, the U.S. president has a fan of a portion of net worth in cryptocurrency. That's one observation.

And you are providing access to the U.S. president for purchasing his token. that's on paper at least theoretically that's a novel yeah usually what happens is you contribute to the presidential library at the end of the term

and you get a nice dinner and a photo that's usually what happens right so we got some that's on the one hand you know from the token perspective it's up like 76% in seven days the thing about something

that non-crypto people don't understand about crypto is that for crypto natives, volatility is a feature, not a bug. That's the point. That's the point. Even if these tokens have a negative expected value, I would expect

that Trump token is down in the next 90 days. It's going to have a short term hype pump. It's doing that right now. But in 90 days from that, it'll be lower. But people are willing to play in the casino where we have a negative expected value from a 90-day time frame, be it the possibility of 70%

return in seven days, right? This is just the modern financial economy post COVID, post-QE, post-Dimmy checks, post-gamification of everything, where money is just a meme and a number. Like, that's what it's about. So I took my daughter to the U.S. Constitution Center about a week ago. I live in Philadelphia, and it opened, and she was learning about the different branches of government. I was helping her study for a quiz, and I kept asking her, what does the executive branch do? What does the executive branch do? And for some reason, she had trouble just remembering it executes the laws that Congress makes.

So I took her to the Constitution Center. And I didn't have to have to have to talk to tell you that the executive branch also sells mean coins now. I mean, the whole, like, the, I mean, I mean, I don't have a lot to add on to what you said. The idea of selling access to the White House of the presidency, if you buy his, his token is just, I mean, I didn't see that in the Constitution, but maybe it's been a little while since I read it. But more than that, it just, in some ways, it's almost a savvy move because you guys know how every token that's about to have a massive air drop and they know that the VCs are going to start dumping on retail, they announced some sort of partnership, some press

release to gently buttress the price and make the sell a little, a little bit easier. And I think Trump actually delayed the 90 day. Maybe when you remember, I saw something he actually delayed the unlock for 90 days. I don't know if the 90 days is a coincidence or not. But it just, I mean, the whole thing is just really sad for me. I mean, he's already a billionaire. Does he really need this extra money? And there's so many other things that if he's getting involved in crypto, great.

I mean, I have serious ethical concerns about things that he's doing, but he's getting involved in mining. if he's trying to find a way to create a strategic reserve, to provide regulatory clarity, all those things are great and needed. Like this meme-coing thing, and we all, I'm sure, said it when he launched it the Friday before he was immorated. It's just so unnecessary and cheapens everything else that he's trying to do.

I really, really wish that he did not do this. It's great for Solana, though, and it is a win for Kyle and Multi-Coin, which were backers of Trump. So part of it is Trump rewarding people who got him to office. Yeah, I think there's two ways to look at one. Go ahead. I think there's two ways to look at it. One is, yeah, there's a lot of ethical questions and it's a bit, you know,

a bad taste or a bit sleazy to kind of do. And probably a lot of retail is going to get really hurt on it, if they're holding it for anything more than 12 months. So yeah, there's definitely a lot of ethical questions there. And, you know, it's not a security technically, but if you would consider it as security, then I'm sure the SEC would be over it as not being right, especially from presidents.

So, yeah, it's not great in that perspective. The other hand, though, just the fact that a president is launching a token is pretty mind-blowing and progressive. If you ignore all the bad stuff and there's a lot, right? Just the fact that a president is doing this is pretty, you know, a big validation of our industry, whether or not it fails and what happens to it. I'm not going to question that. But so I think that's a big benefit.

I think that's probably been a tailwind to a lot of the broader crypto market strength in the last few months. And yeah, I think like all meme coins can end badly. I think especially when Trump's popularity starts to. to Wayne, which will definitely be in the back half of his presidency as he probably starts coming off. And in the end of his life and presidency, you know, this coin's obviously going to eventually go to zero. But in the short term, it's definitely good marketing for the industry. It's somewhat of a validation to an extent as well. And in terms of market cap and wealth, it's ridiculous, right? Like the coins, FDV is almost 15 billion.

And his DJT stock is like five. So obviously a lot of this will never eventuate in terms of valuations, but it's three times his equity of his entire life. I like the point you're making. Look, this is first product market fit for clot and reputation, right? A16Z backed a number of startups that were intending to monetize alternatives to Twitter through their networks. They didn't really go anywhere.

There's actually another fintech called Clout like 10 years ago where monetized your LinkedIn also didn't go anywhere. So you could say that Solana's and these meme coins are the first solution that helps people monetize cultural relevance, which is kind of a novel idea. That's a pretty interesting idea. If you wanted to create a competitive Twitter, you might want to start with a model like that, right? Elon's trying to pay creators and so forth.

That is a novel idea. I mean, Kim Kardashian, she launched a token, came under SEC scrutiny. This was something like four years ago or so. You know, you can make the case that meme coins are like a modern version of like a fan club. And the more meme coins you own, the more access you have. And it's a way for creators to monetize that doesn't require intermediation with an agency or a label. That's the best way to provide. I do think there's something there. I do think there's something there. We had to figure out what they're there. is though. I'm a big fan of enabling the long tail of creators to have direct reach and engagement with their fan base. I think that's super important and it takes power away from these intermediaries that are picking winners and losers and essentially all these tastemakers and letting artists capture more of the economics. So I do think there's like a promise and opportunity around that.

we're just kind of doing discovery and it feels, feels off because the president's doing it. He's rewarded for promoting this token. And he also has the levers to the nukes and all the other levers. Nukes and Nukes, yeah. There's something there. They've been, but I mean,

people have been trying that for years at this point, like music royalties and other types of fan tokens and all sorts of stuff. I mean, wrong, point taken, and God knows, like, I certainly get the value of, like, cultural relevance and, and how much my, I mean, if you think about how much money I spent on Eagle Super Bowl champion year, I mean, it's much more than I ever showed up. So I get that. But, but at the same point, like, I wonder if it's just because Trump's the president. I mean, how much of it is just because he's the president? I mean, obviously, it's just because he is, but, like, in three years

when he is no longer president or three and a half years, like what is going to happen? And then say the next, if it's J.B. Pritzker or J.D. Vance or whoever, and they try to do the same thing. I, I'd love to see, it's just every other example I can think of that's not the sitting president,

who's the most crypto-friendly president ever, has not gone well with trying to sell these types of fan tokens. I'm just trying to figure that out. I agree. The issue is we don't have IP being delivered on the Slana network. such as if you're a movie maker, you have access to the movie, you're not going through Netflix. What you're being offered is access as opposed to a digital product

or access to a digital community or some kind of content. That's what's missing. Yeah. Yeah, I think, yeah, like you say, Steven, in my view, it's definitely going to zero. Like all of them probably are at some point. The problem I have with the main point, is they can be really well around community and narrative in the short term,

but if it's tied to an individual person or some kind of funny meme, right, at some point that meme won't be funny, 10 years, 20 years, whatever. Some might stick around if they become super culturally relevant, but most won't. If it's an individual artist, at some point they're going to die or they won't be popular or they won't be president. And like there was a Biden meme coin as well, right? Just went to zero basically when he lost the election.

So, like, at some point, the cultural relative relevance of each of these ideas or personalities dies often because there's no actual, there's nothing else to the project except for that. These coins, you know, they can have their moment of shine and have massive booms, but they all basically seem to bust. And the bigger story here is there's just so much money in the system. There's just so much liquidity out there. I think we're going to look back in 10 years and be like, hey, do you remember that thing called like meme coins and the stuff was worth like hundreds of billions of dollars and explained to our

kids what the utility was or lack of utility was that yeah happened after q ewee and trillions of dollars of stimulus yeah exactly in hindsight it'll be obvious right it'll be like that meme where the girls walk in the grandma back and she's like all right grandma i'm sure you built a coin that was worth $15 billion um all right that's enough on trump meme coin uh we're a little bit over but I do want to address like the broader market and what's going on. I mean, we didn't really talk about it at all. But I mean, Bitcoin is up above 94K right now. Broad market indices and the equities in the U.S. are like roughly where they were.

There's still a little below liberation day, but they're like mostly recovered. I guess like what are your broad thoughts on like Bitcoin, crypto in general, markets in general, where are we going from here? Are you like, yeah, I guess let's just go from there. Like around the horn real quick and then we can we can wrap up. Steven, if you want to go first. Or no, Rom, you go first. That's fine.

Well, I love to talk on the Apollo slides. I'll let you guys go ahead. Oh, yeah, that's right. We didn't get to those at all. Let's do that. Yeah, go ahead. Steve, you go first then on the broad market. Any broad market thoughts?

Because we should talk about those Apollo slides. Right. I would just go back to, I think the first topic we discussed, the idea of there being a trump put. And, and, I mean, the fact that we're all kind of back to par, I mean, it's a rough analogy, but every time he takes a stand, the market gets scared, he retreats a little bit. And I mean, there's no better, I guess, illustration of that than the fact that, like you said,

James, most of the broad indices are almost back to even after a curate of like unprecedented volatility with a global financial crisis, I'll be of short, that was entirely driven by one person. To me, though, I mean, the really big standout is Bitcoin because, I mean, I think it might have been Alex at the last session was talking about how Bitcoin was largely uncorrelated to brought indices until COVID. And then when COVID happened, everything went down for I guess a month or two and then everything started going up, Bitcoin, tech stocks, everything. And there's been a few periods where Bitcoin's been uncorrelated, but it's usually been for bad reasons, like the collapse of FTX and some of the unwinding in 2022 that really

had nothing to do with border markets. There were some good ones like when Graysko won its lawsuit against the SEC when Blabrock announced it was going to when a filed an ETF at location. I mean, those are some sort of outliers there. But this is really, I think, the first time where we've seen Bitcoin decouple from indices act more like

the gold that it's supposed to be. And it's staying there. So that has me, I mean, that has me very bullish on, on the market just because it's really proven some resiliency that it never has in the past. And people are.

noticing too, even people that I read that are like relatively anti-Bitcoin, anti-crypto, or like, oh, shit, maybe I should start taking this a little more seriously with what's happened over the last few weeks. Sorry, Charles, let's go to you. I don't know if you have any thoughts. No, yeah, I don't think I could be at this point where we are in a cycle, I'd normally be pretty conservative and worried, but I don't think I could have to be any more bullish right now, to be honest, given where we are and the data I'm seeing.

Is that Bitcoin or broad risk assets you're talking about? Bitcoin, possibly other assets. But yeah, so for the last four to eight weeks, I was a bit not so, you know, I could see things going both ways effectively. And I was a bit bearish at some points. But some big things that changed for me. And it's our macro index, which is our machine learning model, looks at all the on-chain data and macro market data,

it started trending up for the first time, mostly since last year, December, when it topped around just before Christmas. So that's for me a very strong signal for Bitcoin. So the liquidity, on-chain data, you've got the right flows, you've got long-term holders of buying again, all these things are quite unusual for this point of the cycle. Then just from a valuation perspective, Bitcoin to its energy value, production costs, various other metrics is quite well priced, approaching, you know, deep value territory at 40% below energy value. And that's also extremely rare at this point of a cycle. I've never happened before. So that's pretty amazing. And then just the relative strength we've seen. So gold has just been crushing new

records. Bitcoin typically lags it by three to four months. And we've seen that relative strength now against equities, et cetera. And it's, you know, I think that that that kind of gold type rally is probably ahead of us. So you've got that factor as well. It's also aversion to the mean of those two assets, the kind of pair trading through time. So really bullish on it against gold. Then you got the technical breakout we just had

where we had a breakdown below the 90 to 100 K range. We sat a lot for several weeks, a couple months, and now we've broken back above 91, as long as 91 holds from a technical level. I think that's also really bullish. Yes, I think things look really good. Obviously, there's always some risks. The technical breakout could fail, but it's not my base case.

You know, liquidity and other on-chain metrics could flatten out. All this is possible and it could change any time and stuff we're monitoring 24-7. But at the moment, it looks really good. So I'm kind of expecting like a very strong rally from here, basically. it's my base case. Fascinating. And when you say cycle, I assume you're talking on a cycle as far as the having goes. So like this far out. Yeah, yeah. Yeah. So normally you get really good 12 to 18 months post cycle. 18, if you're lucky, would be like 2020, 2017. Where you get the supply squeeze and all the other dynamics kind of play out. Usually plays into where long term holders, a percent of supply is kind of peaked and then kind of sells down. So we've had quite a bit of that very much muted in the last 12 months, but normally, you know, things look way worse than they do right now. And then that combined with what I'm seeing, kind of these flywheel effects of the

Bitcoin treasury companies, I think the ETS is going to take a backseat from here. I think it's really the, you know, the micro strategy models that are going to take over for the next six months. Yeah. The backdrop's really good, I think. And Fed looking at cut in ease later in the year, like I think the worst of the Trump tariffs is also behind us. So there's a few things that are kind of lining up,

which, of course, they can always change and we'll monitor that. But right now it looks really good from my view. Also, all the sentiment metrics, like across every market, AII, name, CNN, Fear and Greed. All of them are at extremes of like the 2020. too low, the 2020 low, 2009 low. So you have like a lot of confluence right now, which is quite interesting. Fascinating.

Yeah, I guess that 18 month mark would be, you know, the fall or Q3, Q4 of 2025 would be the 18 month mark. But you're seeing what happening now kind of thing. Yeah, the risk would typically ramp up from now to end of year if it was like a prior cycle. So that's definitely something to consider. Also, seasonality wise, Q3 and 4, which were in, now are usually the worst. But I think a lot of that was kind of front run, if you will, in Q1 with the tariff stuff.

So, yeah, I'm pretty optimistic at the moment. But we'll, yeah, the risks definitely grow over time for sure. And the playbooks won't work forever. But I still think that there's quite a bit of leg room there. There's the potential alpha from Charles for this episode. All right, let's go to Rom. Rom had some, Apollo had some slides. Yeah.

I'll share. Some slides from the chief economist of Apollo. So to frame it up, like the big disconnect in markets is the soft data versus the hard data. The soft data are the sentiment surveys that Charles are alluding to, which are at terrible levels, whether it's consumer confidence, CEO, CAPEX intentions, you name it. On the other hand, the hard data is fine, right? Earnings are coming in just fine. Initial claims are just fine.

We don't see job losses yet. There are risks down on the horizon, right? If this tariff issue isn't addressed, then you're going to see layoffs in the supply chain, particularly around truckers and logistics. It's like 8 million Americans employed in that sector, and you are seeing freight volumes diminish. So it does need to be addressed. As I said, I don't think China, U.S. trade gets solved or really addressed in earnest until June and July. I could see a multi-week, multi-month rally going through June and July,

especially with earnings season and buybacks are back and earnings are good. And, you know, Americans accelerated imports, which creates some economic activity. They built up inventories. But, you know, it all turns on this. Like, well, is Trump going to settle at a low and reasonable rate of tariffs or a high level of tariffs? If it's a low and reasonable, reasonable will be zero except for China. But let's meet in the middle at three or five. Please no more than 10. If you land there,

markets can have a shot at recovering. But if you go higher than that, and if his goal is to truly replace income taxes by jacking up sales taxes on all Americans, including the least worst off, then that's not good. When you do see New Order's class, scene. That's hard economic data, by the way. New orders is hard economic. That's actual,

you know, transaction. So I thought this was quite interesting. I don't think we're out of the woods on volatility, but, you know, you have had a lot of compression in the volatility index, which creates a natural bid for equities, right? The VIX was at 50 plus. Now it's in the mid-20s. the lower it goes, the less of that mechanical bid is in the market. It's not something to watch out for. I would also note that, you know, international equities, developed market equities like Germany or all-time high today, United Kingdom, right around all-time highs today, despite the fact that the Eurozone is in a recession.

Germany's got three years of recession, right? The central bank there is cutting. And there's genuine economic weakness. I think a lot of that was a repatriation of capital from U.S. equities back to home markets. Mexico is doing really well. Brazil is doing really well. I would expect that large-cap tech, quality firms would get a bid. Like, healthcare firms would get a bid.

I think we're seeing that now. But I don't think we're out of the woods yet. Like, obviously, it's still newsflow driven. We have to see what Lutnik says tomorrow. You know, we'll have to reassess. You just, unless you know what the end state of policy is, it's hard to have a long-term view. And that's also the same position that a consumer and a small business and a CEO is in.

They can't make a long-term commitment until they have clarity on policy. We have to exit the Band-Aid whack-a-mole policy. So it's a highly technical market. It's just a short-term oriented market. You do have earning season. an earning season is constructive. Yeah, I would say a few things. One, there's a lot of talk.

Our economists was at Bloomberg and Wong was saying, like, we're likely going to see empty shelves if things don't change. Like a lot of people front ran bringing stuff in the country. You talk about the huge drop off in ocean shipping. Like, things just aren't being sent here right now. And already Trump's approval ratings are really low. Like the lowest they've ever been for anyone this early in a term, which is kind of, I mean, I guess it's not that insane.

I think that his first term was kind of somewhat similar. But like, it's the markets obviously moved him. I wonder how much like general like approval ratings from the broader public is going to move his views on this. Like if people can't get hands on their car seats or other things to take care of their kids and stuff, which is all of that comes from China and all these things. Like it'll be interesting to see how he responds when people are up in arms about like all these shells being empties in different stores. The whole case for that, James, is like, suppose the retailer stores are empty, they won't be empty, but suppose the shelves are, what's the SOA, meaning the big drivers of the S&P are these large tech firms, which primarily offer digital products, banks which do lending, banks would be exposed if there's a recession. You have a services economy, so it's less sensitive to business cycle risk, but there is risk there. Insurance companies would be fine.

So there's an argument that, okay, retailers would be hurt, trucking logistics would be hurt, but maybe earnings can hold up. I put that as high pop. I'm not saying that's my view. Just to say that maybe empty shells aren't the end of the world if corporate earnings can hold up. In 2022, we had a valuation-driven bare market. There wasn't an increase in job losses because employers are still hanging on to labor. It's hard to replace that. No cycle is the same.

Yeah, we're sure that'll once again, it'll play out in its own unique way this time, too. Yeah, I just meant more like the general public response. Like right now we can see Trump reacting real time to like hiccups in the treasury market, pullbacks in the stock market, he's watching it. But I wonder how much he'll react to potential, like just your everyday people being pissed at him for every, because he's trying to blame something. He's like, if Powell would just cut, the things wouldn't be a problem. But like, people aren't dumb enough to fall for that anymore, I don't think.

Like, people know that he's causing this. Well, he needs to, right, improve it for his party into midterms, right? So I think he's just trying to do all the hard work, the brutal stuff early on so that he can, you know, soften it up and get to a better picture over six, 12, 24 months. So if you're in his position, that's the best, if you've got some policies you want to do that could hurt, you're going to do them early, right? So you can get to the best results or the better results over time. So my assumption is that's his strategy because it would make sense.

Yeah. I think that makes complete sense of time. Which would also then be, if that's right, it may not be, but if it's right, I would also be bullish for equities and risk markets generally as well, because that'd be the playbook. Yeah. All right, Stephen, any final thoughts before we wrap up on the Apollo slides or Trump's status? No. No, not so much. I mean, the divergence between the soft and hard economic data, Ron, we talked about that a lot last week.

and I know we're wondering, again, it's probably a lot about convergence when that's going to converge because at some point it just seems illogical that they're going to be so disassociated forever and I'm interested to see what will happen. But I share your hope, James, that one day we don't have to lead off with Trump talk. I mean, I was just going to say that we never really saw a convergence

with like the vibe session we had a few years ago. Like, everything was, I mean, granted, there were some things that were slowdown, but for the most part, all the hard economic data was pretty good, but the soft surveys were not great. There was a, I mean, Kyla Scanlan, I think, came up with the term, calling it a vibe session. Everybody kind of ran with it. It didn't give her credit for it.

But, like, I think there's just been a disconnect like you're talking about, Stephen, that I don't know if it ever goes back. Yeah, I mean, maybe. We'll see what happens. It is interesting. You know, again, we saw the new orders did decline. Cargo is slipping. So there are those early indications of real economic activity.

Do you see truckers get furloughed? But it's hard to imagine a scenario, even if Trump pivots, where multiples in the equity market don't move lower. Now, the path of that will have to see, but there's just more risk and uncertainty in the system. Full stop. And interest rates are higher, and they compete for risk assets. So that, you know, that seems to be a statement that, you know,

I'm comfortable making. I don't think this divergence is going to, I have a bit of a different view. I don't think it's going to converge as negatively probably is most you're expecting. But yeah, that's just the data I'm looking at. Expand on that. Do you think that you think it's going to get worse or do you think it's all going to get better? What are you saying? Look, there's so many unknowns.

I can't give like a clear answer to that because policies, tariffs, where they end, none of us really know, but I think the worst is generally behind us in terms of the tariffs. They've already been more than cut in half. And it's pretty obvious they're not going to go back that way because of the fear of the financial markets, impact of people, the polls and things you mentioned. So yeah, equities have been at a big premium for sure, but they're still well below, you know, prior cycle tops. They've had a big pullback in terms of, you know, the relative valuations to bond markets, you know, about 15, 20 percent just from this dip.

You know, things can always top at any point, right? But they're not as bad as they have been to other extremes right now. We know that the tariff stuff softening a lot. We know that they want to have good financial results. So we've got the Treasury backstop, Trump put, Fed's cutting into the later year. The Fed CME watches expecting three cuts this year, which is a lot, quite a bit more than was originally expected. Some people saying that QE might resume. We're seeing U.S. liquidity go up as well broadly, recently, M2 around the world going up.

So I just think the liquidity is going to pretty quickly step in if things get worse. And at the same time, the policy strictness, if you will, is softening quite a bit in the last month, six weeks. So, yeah, of course, any of this can change, but I think given all of that and the absolute extreme amount of fear in the markets, I think that there's a decent chance that the worst is behind us for this year at least. There's not like a, you know, obviously things can change. I'm not talking about next year or a late cycle, that sort of stuff.

But for 2025, I'm pretty optimistic, yeah. Yeah, for the rate cuts thing, throw some numbers out there for the listeners. Right now, they're basically pricing for the cut by at least July, potentially in June, another cut in September, and then another cut in October, potentially another cut. So we basically have over four cuts priced in by the January meeting of 2026.

So there's a lot of cuts being priced in right now. And what the Fed had priorly communicated was two for the whole year, right? So things are changing pretty quickly in that front. on. Yeah. All right. Well, we went over. But Charles, thanks for waking up early and joining us for this. I know it wasn't a great time for you, but you were great addition. Yeah, thank you very much. All right, guys. Thanks for joining us for this episode of Bits and Bips. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. Until then, everyone.