Unchained - Why Twenty One Capital Is More About Volatility Than Bitcoin - Ep. 826

Episode Date: April 29, 2025

The race for Bitcoin supremacy just got more complicated. Twenty One Capital, backed by Tether, SoftBank, and Cantor Fitzgerald, plans to stack as much BTC as it possibly can.  But is this new venture really about Bitcoin … or about creating a hyper-volatile stock to play market cycles? This week on Unchained, Jeff Park of Bitwise and Mark Palmer of Benchmark join to discuss: Why SoftBank and Tether are a “perfect match”—and why they turned to Bitcoin How volatility, not bitcoin itself, might be the real asset investors are buying What Cantor’s involvement says about Wall Street’s readiness for crypto Why the launch timing matters Whether Twenty One could repeat MicroStrategy’s mistakes Whether these new Bitcoin vehicles are better bets than spot bitcoin or ETFs Plus, is SoftBank getting into crypto a top signal? 👀 Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Bitwise Jeff Park, Head of Alpha Strategies at Bitwise Mark Palmer, Senior Analyst at Benchmark Recent coverage of Unchained on Twenty One: 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 Jeff Park’s post on X Timestamps: 📰 0:00 Introduction 🚀 2:07 Why Jeff sees the Twenty One Capital launch as a huge development 🧠 6:09 How Twenty One might learn from MicroStrategy’s playbook 🏦 11:59 Risks of turning into the next Celsius, Voyager or Genesis 💸 18:52 Why Bitcoin needs income-generating activities to evolve 📊 21:17 How metrics like bitcoin per share bridge crypto and TradFi  🤝 30:16 Whether Tether’s participation makes sense 💍 34:18 Why Jeff thinks SoftBank and Tether are “a perfect match” 🚩 42:29 Is SoftBank entering crypto a top signal? 🏛️ 46:32 Why Cantor’s involvement shows Wall Street is serious 📈 50:24 Why bitcoin vehicle stocks trade at a premium 🗓️ 55:48 Why timing matters compared to MicroStrategy’s 2020 debut 🧮 1:00:06 How to decide between investing in vehicles, spot bitcoin, or ETFs 🌊 1:08:52 Whether SOL investment vehicles will have the same success as bitcoin ones Learn more about your ad choices. Visit megaphone.fm/adchoices

I think it's a common misunderstanding that investors of strategy cares about earnings at all, actually. I think they don't care about earnings. And we're going to see it again with strategy reporting very soon, the stock does. But actually, the volatility of strategy and the stocks never react to earnings in the ways you see it with companies. And the question of how they're going to monetize it, it is likewise the case that I think those who are buying today, CEP at 3x, the premium. are buying something else. And what they're buying isn't an earnings monetization scheme. They're buying a volatility monetization scheme.

Hi, everyone. Welcome to Unchained. You're a no-hype resource for all things crypto. I'm your host, Laura Shin. Every episode, we're featuring listener comments. Today, we have comments responding to my recent interview with Van X, Matthew Siegel, on the launch of 21 and his pitch for BitBonds. On Farcaster, Especte La Cione writes,

quote, leverage on Bitcoin could be one of the biggest risks of the asset. On X, Christine Lee says, quote, Matt is clever, reminds me of the Swiss National Bank, which says it won't buy Bitcoin, but owns shares of MSDR, Tesla, and Mara, perfect bit bond buyer. Do you have an opinion or insight to share? Leave it on our video on YouTube, Farcaster, or X. This is the April 29th, 2025 episode of Unchained. 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, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. Today's topic is 21 Capital, the new Bitcoin holding company formed by Tether, SoftBank, and an affiliate of Cantor Fitzgerald. Here to discuss are Jeff Park, head of Alpha Strategies at BitWise,

and Mark Palmer, senior analyst at Benchmark. Welcome, Jeff and Mark. Happy to be your, Laura. Thanks for having us. So Tether, along with BitFinex plus SoftBank, will be launching this new company with Cantor Equity Partners,

and it'll be called 21 Capital, and it will follow in the steps of micro strategy and be a Bitcoin holding company. Its goal will be to increase its Bitcoin per share, BPS, this is a new metric they're introducing. It will also track its Bitcoin return rate, or BRR, which is the rate at which its BPS grows. At launch, it will have 42,000 Bitcoin, which around the time of the announcement was about $4 billion. And that will, no, actually, they've already been added to the Bitcoin Treasury's website. And you can see it's the third

largest Bitcoin Treasury company. What were your first line thoughts when you heard about this new company being formed? And Jeff, why don't we start? with you. Well, my first thought was, this is incredible. And I mean that in the most literal sense, because the players that are intersecting here are really a different flavor than the ways we've ever imagined in the past. And to me, at symbolic representation, it represents a lot of interesting dynamics across the world that is coming into play with Bitcoin at the center of it. And so there's a political element to it. There's an economic element to it. There's a, capital element to it. And there's a social capital element to it as well outside of the financial

capital that is coming into play with Jack Mahler's at the helm. And so to me, it just represented this incredible cultural moment where a lot of intergenerational forces across all parts of the world that are global level are coming together to bring on the mission of crypto in the biggest splash possible. All I could think of was, wow. And I'm still a little bit in that mode today. Mark, what did you think? I viewed it as a validation of what Michael Saylor did at Microstrategy, now strategy, over the last five years. The concept of tapping the capital markets and then using the proceeds to buy Bitcoin, and then to do that repeatedly using different capital market instruments over time,

was considered to be insane by a lot of people when Michael Saylor proposed this. back in the middle of 2020, now we're seeing copycats, not only in Bitcoin, but in other cryptocurrencies doing effectively the same thing. What the new players have is the benefit of seeing some of the learnings, I would say, you know, a mistake here and there that were done by micro strategy, the types of instruments they use to raise capital, that sort of thing. And also, the benefit of all of the things that have worked. We are a few years down the road, and the folks at 21 Capital are going to have the benefits of that experience.

Yeah, the other thought that I had was, you know, I should have looked this up before, but I'm pretty sure this was like winter 2020, 2021. but they had that big conference, Bitcoin for corporations. And a bunch of companies kind of said that they were going to be adding Bitcoin to their treasuries. And I expected within that year to see a lot more announcements. And then later I kind of was like talking to some sources because I was like, what would happen there? And somebody was like, oh, that was just PR. Like, that's not a real thing.

And I was like, oh, okay. And so it's interesting that like, you know, I don't know what happened then. So I don't remember what year. Maybe it was 2022. If it was 22, then that might explain why things went kind of quiet. But, yeah, validation finally came. And I do think that part of it is like, yeah, it's just a typical adoption curve where you have the early adopters and then you start to see, you know, bigger waves. So what do you think of the different strategies that 21 will pursue?

So you alluded to some quote unquote mistakes. You feel that micro strategy made. So do you actually want to elaborate on that? Like, what do you think those are and like what lessons do you think 21 will have imbibed from microstratologies experience? Yeah, I think a lot of it comes down to the types of instruments that are being used to raise capital in the markets for the purpose of buying Bitcoin. And, you know, I would point to a couple of different instruments that Microstrategy used, one of which was the Bitcoin-backed loan that it had from Silvergate Capital, which was $205 million, which in the broad scheme of things at that time was nothing earth-shattering.

Micro Strategy had grown to a point that that $205 million was just a fraction of its capital stack, a fraction of the value of its underlying Bitcoin, but there were triggers built into that loan such that if the value of the price of Bitcoin dropped below a certain level, the value of the underlying collateral dropped below a certain level, then micro strategy would have to inject additional collateral in the form of more Bitcoin. Now, the fact that there was any sort of margin call associated with micro strategy, really gave plenty of fodder to the folks on social media who could then turn around and scream micro strategy and margin call, which the detractors of Michael Saylor had been wanting to do from the get-go, it seems.

So having that in place, any sort of trigger definitely was something that weighed on the stock, especially given, of course, the fact that the space continues to be dominated by retail investors and certainly was at that time. There was another piece of the capital structure. The company had some senior secured notes, the six and an eighths, which also had covenants. In that case, it was a springing lien that didn't get a lot of attention. It was something that we certainly paid attention to, simply because there was the potential for that piece of paper to create some complication in terms of the company's capital structure and what would be coming due. So these are the things that, you know, at the time were available to the company.

You know, in the case of the senior secured notes, you know, it looked like the less expensive option for the company at the time when they did that. But the learning here is that you don't want to have any sort of triggers, any sort of encumbrances, anything that could come into play if the price of Bitcoin were to drop significantly over time. Jeff, what about you? What are your thoughts on, you know, what types of strategies 21 might pursue or how they might have learned from micro strategies experience? Yeah, there's a few things they emphasized in their roadshow that I felt were specifically

to address their differentiation versus strategy, formerly known as micro strategy. The thing that resonated with me the most, perhaps from just the lens that I get to appreciate the role of Bitcoin is that they mention a few times that the Bitcoin accumulation will be not just strategic, but also actively managed. So to me, this is a little interesting, right? Because there's essentially two things you can do with a capitalization table to drive value, one on the asset side and one on the liability side. And I would say strategy has done an exceptional job in trying to imagine a lot of different financial engineering

on the liability side to bring value to capital stewardship. But to be fair, he has not done a lot with the Bitcoin he actually owns on the balance sheet, right? He would say part of that is because the creative energy being exerted on the liability side requires that the underwritable assets be as static as possible to some extent. But I actually have always wondered at some level that if you could also capitalize upon some opportunity on the asset side of the balance sheet, could that not be worthwhile and

interesting to bring another concept of yield outside of just the liability side of the capital structure? So given that there's some mentionings of those types of languages in the roadshow, I felt that would be one worth highlighting. And then I would say also having Jack Mahler's at the helm, who is known for having founded Strike gives a little bit of that energy as well, right? Because strike is ultimately a payment network in ways you can bring utility to the Bitcoin network in ways that it hasn't been at the forefront of strategies conversations,

but you can imagine in the totality of an operating company, those types of benefits could be really interesting benefits to the asset side of the balance sheet. And then the last thing I would mention is that there's a real emphasis on this being a pure play Bitcoin hyper-financialization vehicle, meaning the, they really don't want any unrelated legacy business. And I would say strategy has evolved as well in ways where originally Dolores Deep. One may remember the Bitcoin strategy used to be just called macro strategy as part of micro strategy until macro strategy became so big that now then it became all of micro strategy. But the idea of having absolutely nothing else, but just a hyper focus on financializing Bitcoin was another energy they leaned on.

to make it a differentiator versus what I suspect there will be other experimentations of other kinds of Bitcoin vehicles that will come to the market in the near future. Yeah, so I do want to reference some of the potential different techniques they might use. They said 21 intends to develop a corporate architecture capable of supporting financial products built with and on Bitcoin. This includes native lending models, capital market instruments, and future innovations that will replace legacy financial tools with Bitcoin aligned, alternatives. So it seemed, at least to me, Jeff, so one of the ones where you were talking about

yield that may be referred to this lending models bit. But I did have a question about that because we just referenced the year 2022. And as we all know, that was the year where centralized lenders in crypto definitely showed that there is not only a ton of risk, but that it's actually just inferior maybe to D-F. I don't know if that's too strong, but, you know, but we clearly saw the difference in performance of lenders in the two worlds. And, you know, by that, I'm talking about the failures at Celsius, three-eiros capital. They're not a lender, but they were a borrower, big borrower, Voyager, Alameda, Genesis. And I just wanted to ask you to, you know, do you feel like the lessons from 2022 mean that that will be a super risky strategy that they

could pursue or do you feel like there are lessons learned there that will allow them to employ that effectively without those risks? Or how are you assessing that? Yeah, this is a great question, Laura. And I think this is the thing that underpins why people have loved micro strategy for the simplicity of what it represents today as a financialized unit of Bitcoin. But the reality is that the capital markets is extremely large when it comes to credit. And there are actually a lot of inefficient things that are happening in the lending market for which scale matters. And you see other players in the space that are trying to come up with different Bitcoin security ization models on the lending side of the business.

So to your point, there are some valid questions as to the operational infrastructure of how you underwrite counterparty risks or different kinds of risk management issues as it relates to potentially LTV metrics and things like that. But this is the whole kind of gradient of alpha that can be created if somebody was to do it in a pretty thoughtful way. You know, one thing I would allude to is Bitcoin is. is a ginormous asset class at this point for which it can serve as a collateral in the credit market. And you do see protocols out there that are taking Bitcoin collateral to lend

dollars against it and things like that, where you can imagine different flavors of risk that don't have to necessarily focus specifically on the custody of Bitcoin itself. And I think that's like the very low-hanging fruits. And then if you think about the inefficiencies that exist in capital markets where you have to pledge different assets for clearing certain trades. So, for example, if you're trading options, we all know that there's a concept of an initial margin and then there's a concept of an ongoing margin, maintenance margin, if you will. And historically, maintenance margins have to be posted really in cash because you don't want the things that's posted in crypto to also have a double correlation to the price section of

the margin value itself. But that's because we're not dreaming big enough about how much Bitcoin can actually be pledged. And so if you have the ability to think about using really Bitcoin as a collateral for a lot of these capital markets functions, there's actually a lot of, I think, low-hanging fruits to bring utility for where you can earn some incremental yield that is still better than zero. And I think we're going to find out what those things might be, especially with kind of canter sitting in the middle of knowing a lot of these capital market frictions that exist between trifi and crypto-native operations, there could be some real unlocks here. Mark, what do you think?

One of the lessons of 2022 is that over collateralization is really a prerequisite for any sort of Bitcoin related lending strategy. And it's just a question of how much over collateralization needs to be used in order for everyone to be comfortable that at the end of the day, they're not going to be massive losses. And making sure that that over collateralization is actually in place is also a big part of that because what we found was that when the market fell, a lot of the lending that we believed at the time to be over collateralized by Bitcoin really wasn't. So I think that that's front and center in terms of any sort of use of Bitcoin in that manner, you know, to prepare for the inevitable, you know, next downturn. And I think that that's been really one of the things that strategy or micro strategy has done extremely well is put together a capital structure that is designed specifically to withstand a significant downturn and a sustained downturn in the crypto markets and Bitcoin markets specifically.

And that's why you see a heavy reliance on convertible debt. and now a reliance on preferred stock, where you're not going to have the sort of onerous covenants and other requirements associated with senior debt or other instruments along those lines. And of course, then the other big part of micro-stratage's capital raising is just straight equity. And the key there, of course, is to be able to demonstrate that investors are getting their bank for the buck or in this case, you know, the bank for the bit in terms of what is being raised. And that's where the KPI's come into play. And of course, you know,

in the case of strategy, we've seen BTC yield as the KPI that they introduced. You know, in the case of 21 capital, we're going to see BRR as effectively the equivalent. But the point being that you need to be able to convince investors that what you are doing in the capital markets as it pertains to equity is not simply dilution without any real long-lasting benefit. So I did also want to ask Jeff about kind of like ways that this company could utilize the utility of Bitcoin to add more Bitcoin. And you referenced Lightning Network. I remember for a long time there were concerns about whether or not the economics of lightning were really there that some of the channel operators were just finding like there was pretty much

no return on investment. I don't know if those issues have been solved. This is not something I've looked into in a while. Are people finding that to be a profitable business? I think you're spot on that today it still remains a little bit unclear into the actual economic model for adoption. none of the less, I think most folks who are thoughtful about Bitcoin realize that ultimately the security model does and will eventually depend on some income generating activities away from the guarantee that comes from just having Bitcoin in itself as part of the supply. So this is one of the things where long term, I feel the vision can be more aligned by having a new voice in the space that can also bring that mission forward.

because this is one of the more sensitive questions that the Bitcoin community chooses to not really address up front. You know, there's a lot of things will just look different five, ten years from now. And so it's not worth worrying about it right now. But the reality is there's a lot of people that have to actually put in the work to figure out these things for that future to manifest itself. And I do wonder if now is the time in 2025 that we might want to channel some of that energy towards people who are addressing some of these long-term security questions. So even though it may not be lightning, the idea of finding a use case for Bitcoin that is not strictly a store of value, I think is a long-term mission-critical alignment in some fashion. It doesn't mean it has to be Bitcoin used to pay for goods, but bringing some kind of financial utility on top of Bitcoin to give it value outside of just in its existence is a worthwhile endeavor. And so I think that's important.

And it's also a younger voice, right? The other contrast that comes to me between Jack and Michael is that it's ultimately generational. Jack is young and he actually is a visionary when it comes to a new financial paradigm that he imagines. And funnily enough, I don't know if people appreciate this, but Jack also comes from a family of traders. Like his parents and his grandparents, I believe, were CME commodities traders. And so the idea of having a financialized individual who's a tech visionary in itself is a

pretty rare thing at that age. And that storytelling will look different than the way that most of sailors' storytelling to date has leaned on the energy of Bitcoin being a way to fight, you know, inflation and all the ways the world's going pretty bad. You know, Jack, I think, could potentially bring an optimistic version to what Bitcoin could unlock. That's not just a store of value, which I think is really interesting. Yeah. And I'm also realizing that there's so many different teams working on Bitcoin Defi. So those are potential also options for this company to try out and see if that helps them in their BPS quest. So Mark actually referencing that metric, Bitcoin per share. I was especially interested to hear your thoughts on like what you think

of that metric since you're kind of more squarely in the Tradfi world, even than Jeff. Like, is this something, you know, because like people have. People in crypto or Bitcoin have talked about this a long time that if you imagine a world that's based on Bitcoin, then one Bitcoin is always one Bitcoin and it doesn't matter what the price is. I remember all the way back in 2015, I wrote this article about Olaf Carlson Wehu heads up Holly Chain. And at that time, he was living a life where he was paying everything out in Bitcoin.

He just switched over to denominating his personal finances in Bitcoin. But I don't know how that looks to a trans-fi investor, this notion of Bitcoin per share. What do you think of it? Well, I think that's where the KPIs really make a lot of sense for strategy. The fact that they serve as a bridge between two different worlds, you know, the world of traditional finance and fiat and the world of Bitcoin. Because the vast majority of the audience that strategy is appealing to to buy their stock are traditional finance players.

And especially with institutions. But here I mean 21 as well. Yes. Okay, right. Yes. You know, so I think that, you know, the notion of coming up with a way of expressing the value that's being created

through the accumulation of Bitcoin, but doing so in a way that can be measured, whether it's in what they call BTC dollar yield or BTC yield, which is the percentage terms, you know, I think really not only allows traditional finance players to better relate to what the company is trying to do, but also provides a better means of measurement. As an example, you know, we heard strategies say that they were aiming for a BTC yield of 15%. for all of 2025, you know, the company this morning with its latest purchase of Bitcoin has been able to get its BTC yield to 13.7% year to date.

So based on that, we know that they're more than on track in terms of what they've been trying to do with the guards of the Treasury strategy. You know, it's a means through which traditional financial players can better gauge whether that strategy is working or not. I actually do think we need to put a little care and asterisk in the ways that we're normalizing this term. And I think Mark would agree at some level, too, that these need to be meticulously defined and studied before we assume connotations about what yield means. Because I've heard some people talk about yield and then use that word as gain in between. And, you know, there's differences between yields and gains and profits.

And we have to be a little bit clear about the nomenclature here. You know, the two things I will pick at a little bit is Bitcoin per share ultimately has a denominator, which we're talking about equity, right? But the reality is we've just talked about the capitalization structure of these companies having a lot of different instruments beyond equity. So there is a little bit of this notion where BPS, to me, is not the most fair metric of representing the health of the balance sheet. Because if you think about the idea of issuing a bunch of debt to just buy more Bitcoin

and you're realizing the benefit of the ability to say you bought all these Bitcoins, but your share account isn't adjusting for that. Well, I mean, if you just double click a little bit, you'll realize that the liability side of the balance sheet means it's actually not a totally accurate representation that BPS went up without there being a give, right? So there's a little bit of this thing that I worry about. at times that if retail investors are not really careful about studying what shares mean versus other issuances of liabilities that can exist, they're missing the full picture.

The other thing is this concept then of Bitcoin yield, right? Which is if you look at its definition, it's talking about the change of BPS from different periods. So how much more Bitcoin per share did I acquire over the last quarter and what is that rate of change as a percentage? And this, the other thing here I sometimes think about is, is the percentage the right metric, or is it the dollar absolute level spread that is the right metric? And what I'm implying here is that, for example, interest rates, people don't talk about

that as a percentage change, right? When rates go from 4.1 to 4.5%, we're talking about a change of 40 dips. We don't talk about that as a 10% change of the 10-year interest rate. There's a reason for that because interest rates have this component which there isn't an equal one-to-one linear movement in the ways people have a base expectation for versus other rates. So it's actually the spread level that matters more than the percentage change. Once we go into these denomination questions about Bitcoin versus dollars versus other currencies, there is a little bit of accuracy as it relates to the absolute spread, maybe mattering a little bit more than the actual percentage change. of those constructs. That's something that I've been thinking about a little bit more deeply and one that over time,

I wonder if other voices will come into play to bring more clarity to wondering if there's a way to make it sound a little bit more precise. And I just want to add some of those comments in there along with marks. And so just to understand basically what you're saying is like, so when you think of that metric, you feel like the change in the, the actual numbers matters more than the percentage. Okay, right. Yeah, because I heard Jack saying, I think it was like right now,

or when he did the interview, it was 0.06 Bitcoin per share. But, you know, they would try to get to 0.07, 0.08, et cetera. But yeah, I understand what you're saying. Well, let me put it another way to exemplify it. The dynamic that's going to merge, as you see smaller companies come to replicate the microchartage you play book is that their BPS calculations are just going to look a little bit different because of the denominator effect of their capitalization versus micro strategy already having over 550,000

bitcoins, right, as Mark alluded to. But at some point, it's the absolute count of Bitcoin that is maybe more relevant than the percentage change of the denominators. And there is something about that to a level in which we're going to see a lot more variety to come to market. And people are going to start asking, you know, if one yield looks worse than the other, I don't thing it necessarily means that one underperform the other. It's just that there's a different denominator effect that is affecting these companies. And there's going to be questions around it.

Right. I mean, yeah, it's basically like saying a startup that starts with really small numbers and it's like, we quidreouple, we can twit when quintupled. It doesn't matter as much because they're starting from such a low baseline. So I got what you're saying. Okay. So in a moment, we're going to talk a little bit more about some of the different players involved here. But first a quick word from the sponsors you to make this show possible. Hi, I'm Matt Hogan, CIO of Crypto Asset Manager Bitwise. Look, crypto can be confusing. There's so much noise and the space changes so quickly.

That's why, every week, I write a five-minute memo on the biggest stories impacting crypto. In plain English. Why is Bitcoin up or down? What are people missing? Where should investors look next? Get the lowdown every week. Sign up to get the weekly CIO memo delivered straight to your inbox. Go to BitWise Investors.

investments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. Here are some more listener comments responding to my interview with VanEx Matt Siegel and his pitch for bit bonds. On X, Sir Joey says, to be honest, any attention for Bitcoin is good. Ha ha. So we'll take any attention Bitcoin can get. And Hayton's G.B. writes, bro, Bitcoin bonds? Low key bonkers, but I'm here for it. Leave your thoughts on YouTube, Farcasser X, and you might hear it in a future episode. Back to my conversation with Jeff and Mark.

So Tethers had a super interesting inflection point. They are likely the most profitable company that's ever existed per employee on the planet. They're facing this moment when interest rates might be coming down. And so perhaps it may have just enjoyed its peak profitability, which was $13 billion in 2024. So to have them taking this majority sense, stake in 21, what does this move say to you about where they might be headed? And either of you can start. Yeah, I think it makes sense for a company like Tether to think about diversification of its revenue streams. And so getting into this sort of business, which is, you know,

not directly related to Stablecoins and the core business of Tether, you know, makes some sense, especially at a time when there is potentially going to be some friction with Tether in the United States if the stable coin legislation that has been proposed is enacted. Tether has acknowledged that that could be disruptive to their existing business. What they have said is that they would then launch another U.S. specific business that would focus on that area. I'm not sure if 21 would have anything to do with that or not. but it's clear that the environment is changing in ways that are positive for Tether,

to some degree, but maybe a little bit more challenging for them as well in terms of the regulatory front, as you said, interest rates. So under those circumstances, the notion of diversifying, finding other platforms that may be more friendly to the geographies in which you're operating makes a lot of sense. rather than simply waiting for the macro factors to begin to impact the company's profitability in a negative way. Yeah. I mean, Cleather is really interesting, right, as a company, because in a way, they are the prime

beneficiary of what otherwise historically is called the exorbitant privilege of the United States. The exorbitant privilege of the United States primarily being the ability they could influence the dollar to their advantage, where actually a lot of the United States, where actually a lot of that benefits is now occurring to Tether at some level where they're collecting interest on the Treasury holdings because of the demand by offshore investors, but not necessarily compensating them for that. And so this is a profound money glitch, if you will.

And it was actually quite important, in my opinion, that Tether would then find its alignment to Bitcoin because Bitcoin also represents the same money glitch, which is that there's a lot of global investor that want that security model outside of the United States. And this capital formation strategy with 21 represents that marriage. And Tether has a lot of other interesting projects that I've been following in the background where they're trying to bring more stablecoin functionalities using the Bitcoin security model. A project that I've been following recently is called Plasma that's also been in this space where they're trying to bring more Bitcoin native capabilities to the adoption of stablecoin

away from other competitors in this space. And so, Mark, I think you're completely right that this is a way for Tether. to grow into a more of a multi-conglomerate effort to do things outside of just being a stable coin issuer in the way that we right now know it as is. But ultimately, its final fruition and form will come from the adoption of Bitcoin standard in ways to bring real utility. And so this marriage that is happening through 21 with Tether, it cannot be underestimated because every kind of money glitch that we're talking about, whereas you've said, Laura, it's the most profitable company in the world. if they can channel all that profit back into the community for Bitcoin and the way that now

there's capitalizing a vehicle for, that is alignment in ways that one cannot imagine of literally having dollar flows of interest burden coming to Bitcoin. That's a pretty incredible thing. Yeah. Well, actually, you know, this is a perfect segment. So I was going to ask about some of the other players, but we can get to that in a second because I just, of course, had to ask you about your investor note. that really put this whole notion around these Bitcoin-focused equities in historical and geopolitical

context, but especially with SoftBank participating in this particular venture. So can you just describe what you said in that note that had to do with Japan and the Eurodollar, Tether, being this 21st century version of the Euro dollar, and just explain like, yeah, how you see this new development in that context? Yeah, absolutely. I think in the marriage we're seeing between Tether and SoftBank is one in which we're seeing a capital formation that is literally the perfect match. If you think about where SoftBank sits on the other side of this equation, they are essentially the most representative of the capital that's been repressed as a function of being in Japan, right? So we talk about how Japan has

had decades of global repression, mainly in the form of the global carry trade as we know it, that is subsidizing a lot of the U.S. consumption and U.S. growth. And as a result, their economy has generally been in stockflakes for a long period of time. This is not a mistake that is where SoftBank then will be born, where they're basically looking to find growth anywhere else, right? The whole point of SoftBank is to actually go out and find growth anywhere else, right? They're going to chase it in the U.S., in Europe, and they're going to find it in high-risk growth sectors like AI and robotics.

You saw it with Arm, you saw it with WeWork. There's some hits and misses. But the whole point is it's the most strategic patient capital. Masa has said it that it's a 300-year capital vision, which means that they're trying to find a way to grow. And if you think about what they're implying here is that they need to find a way to offset the repression they've been experiencing. And on the other way of that is Tether, which to me is the ultimate beneficiary of this financial repression we're talking about. Because again, the exorbitant privilege of the U.S. is that they can go out and print as much dollars and place as many treasures as they want. But now Tether actually collects the toll on that and benefits the most in an asymmetric way than anybody else.

So they're almost like opposite size of the same coin, in my opinion, in the way that we have the current global capital markets exist today. And the fact that they're meeting in the middle to use Bitcoin as the way to hyper-financialize a growth story, both for their individual goals. that may look a little bit different from their shareholders' perspective, but ultimately aligned and what is good for them is going to be good for Bitcoin is actually a worthwhile story. I think we're going to see more of these things unfold, where you have seen, basically, SoftBank make lots of big decisions. They have a lot of capital, and their backers are also sovereign in nature.

So the thing that I feel is really important here that we cannot miss is the next wave of buyers that we're going to see in the space, are going to look like this, where they're going to look like kind of quasi-private public partnership type models because it actually allows pools of capital to come together without that direct like sovereign agency risk. And I've talked a long time in the past about why, in my opinion, the U.S. Strategic Bitcoin Reserve fell short of expectations. A lot of this really is because you can't navigate public affairs and the ways to represent the people in a sovereign form. that is much easier if you can do it in a quasi-private public JV-type partnerships.

And that's why having all the Middle Eastern capital in their sovereign funds into an entity like SoftBank allows them to make quick decisions, allows them to make big bets, and also kind of obfuscates a line of like the responsibility as to who is to blame if things go wrong, which is actually really important from the perspective of the government. And so I think this is one symbolic moment of more of these types of capital formation strategies in like national sovereign type partnerships. This is like so fascinating. I just need to be sure I understood one other point,

one earlier point you made. So you were talking about how Japan or Japanese investors are looking for growth pretty much just anywhere. And then I forget the phrasing you use, but it was something like, you know, Tether and SoftBanker meeting in the middle. And my interpretation was you were saying that like, since Tether is the one that's exporting these dollars,

basically to the rest of the world and Japan is seeking that growth elsewhere, that that's how they're doing that and Tether can only do it because they're not regulated by the U.S. is that kind of like the most reductive way to say it? I think that's a great way to frame it. The other thing I would share is that they're both essentially at this point, the largest buyers of U.S. Treasuries, but they're experiencing the benefits in different ways. So Tether is experiencing it very directly. It is almost one-for-one direct profit transfer.

Japan has a different social contract, which is they essentially buy these treasuries, and then they have to invest it into offshore assets in ways that kind of allows them to participate in the traditional global carry trade as we know it. And here, I think what we're seeing is that they're now merging for Bitcoin to be the asset that's going to solve both of their long-term problems. Because to your point, interest rates might go down in the future. I think it's very likely we're going to see rates come in. And Tether will have to then imagine a new world in which they can also

fight for more asset inflation in ways that Japan will also have to fight for it. And they're meeting that path through the eyes of Bitcoin. And also, if you think about the unlock that micro strategy accomplished, which is the credit market, the converts market, to access big pools of capital that are essentially yield-starved, can you imagine a country that is more yield-starved in credit than Japan, where they've had negative rates for as long as they've had? I mean, if you think about one arbitrage at a global level, you would find that would be where the money is. If you could find Japanese creditors to fund Bitcoin purchases, that is something

that even Sailor will not have been able to accomplish with micro strategy thus far having been generally an American vehicle of American investors. Wow. This is, my mind is like kind of blown. I know I'm not like a sophisticated financial person, so I'd be interested to hear Mark's take on what Jeff is saying. The notion of matching up yield with those. that are star for yield is as fundamental as anything there is in the global financial markets. And I think that Jeff is spot on with regard to the role that Tether could play vis-a-vis Japan in that regard. I think what really takes all of this to another level is the influx of institutions into the space, which, of course, crypto is that asset class where retail investors,

took the lead and institutional investors have lagged to a large extent, especially in the U.S. where we haven't had a regulatory framework, but that may be changing and changing very quickly, first with the enactment of stablecoin legislation, and then, as has been suggested, we would see a broader digital asset market structure bill enacted. A lot of institutions that we speak with have been very interested in investing in crypto, but have held off simply because they don't know what the rules of the road are going to be going forward. And we just went through four years of regulation by enforcement where to many investors, that was just arbitrary. And that's not the sort of environment in which institutions want to make big bets. So I think the timing of this on a global scale is as opportune as it could be.

All right. So I'm going to ask a slightly contrarian question to what we just discussed. But Masayoshi's son of Softank famously got into Bitcoin with a $200 million purchase in late 2017. And then he lost $130 million on it in short order. he has paper hands or had paper hands. And on the chopping block recently, Tom Schmidt of Dragonfly Capital said that soft bank getting back in a crypto could be a top signal. So I wondered what you thought of them getting in now and what you think about his personal

history there and what that means for, you know, kind of how well soft bank will play this venture. Great question, Laura. I think that many people who come to crypto for the very first time may come in with paper hands and have that experience of regret and sorrow and remorse and come back and therefore then become stronger. And the reality is great macro traders in general flip-flop all the time. And Masasana, I would say at some level, is a bit of a macro trader.

And that's essentially the construct of what Vision Fund represents in themselves, in my opinion. And so that as a fact pattern is that surprising. The most important thing is we know him for who he is. And that is consistent, which is that right now in 2025, Bitcoin is the macro asset. But it's actually now more broadly adopted by almost every macro community investors across the world than we've ever had back in that cycle. Right now we're talking about a world where Stanley Druck and Miller has come in and talked about it. We've seen Ray Dalio come in and talk about it. I mean, almost every well-known global macro trader has commented on Bitcoin.

Even Treasury Scott Besson has commented on the role that Bitcoin will now play at the macro arena. So all of these fact patterns, to me, feels like it's aligned towards an outcome where they will have a different play. And the play they've landed on is what's Vision Fund and SoftBanks actually really good at. They're very, very good at creating leverage. And sometimes that leverage backfires, as we've seen it. but ultimately they understand leverage really well. And this is essentially the micro strategy playbook. How do you bring intelligent leverage to crypto in a way that can fuel the assets rise

that hasn't been done before? And I do think that marriage of thoughtful leverage that only SoftBank knows and has experienced based on their own context of their experience, plus the ability to adopt Bitcoin as a high risk, high growth, you know, tech, AI-resistant. energy type of asset for which is broadly in line with the Vision Fund's mandate, I think is really interesting and one that will serve differently than this time than last time. I think once again, you know, we may be at the very edge, the very front edge of a significant influx of institutional capital into the crypto space. So having lost, you know, a significant amount of capital back in the

2017-2018 time frame, you know, is good company, actually, because a lot of folks did the same thing. But the market was at a very different point then as well. And I would argue that we've seen quite a bit of maturation in the Bitcoin market since then. And now with institutions, potentially getting involved in a very big way, you know, that the fundamental underpinnings of that trade are very, very different. It's not the kind of pure speculation that it may have been eight years ago. It's always speculative. But in this point, you know, there are a lot of underpinnings for that speculation. The biggest one of which in my view is the fact that there are institutions getting ready to follow the lead of the black rocks of the world and get involved in Bitcoin in a

big way. All right. So last big player that I want to ask about here is Cantor. they, you know, obviously had this spec that was used for the current listing, which once a deal closes, will become the XXI ticker. But just sort of alluded to this earlier, that they could also be used more on the financial side. And I wondered if you could just talk a little bit about what you think is the significance of them being part of this deal and what that could mean for the future of 21. This just demonstrates that Wall Street, which had been reluctant to get involved in crypto previously, and, you know, of course, some of the comments from Jamie Diamond at JP Morgan are infamous at this point with regard to his view of crypto.

You know, we have now, you know, we've come a long way. And obviously, the fact that there is a crypto-friendly administration, which is in vivid contrast, to the much more negative stance taken by the administration over the last four years, means that Wall Street banks can get significantly involved in the space without the fear of damaging their clients by doing so, which is, of course, for any bank, any financial institution worth their salt, that's, you know, what is really premium at a premium is to protect the interest of your clients. Getting folks involved in a space where there could be the mother of all rug pulls from the U.S. government is not good corporate policy. So with that environment having opened up

and with that leading to the potential for, again, massive institutional adoption, you know, it makes sense for a Wall Street bank to get more significantly involved. This is a means through which they're able to do so and do so while making a pretty significant splash. I agree, Mark. I think you're spot on. Ultimately, in my opinion, it is political. And this is a way for the U.S. to have relevance in the ways that they're participating in the emergence of a new asset class.

If you really think about it, Tether and Japan via SoftBank are not within the American domains of control. There are different pockets of operators with different pockets of capital, but there's no American representation being had. Cantor is that bridge. Cantor's representation is the American blood that then ties into Wall Street, where the capital markets endeavors that you and I just discussed will be brought forth in financializing Bitcoin where Americans have some skin in the game. So I see Cantor's role as extremely vital, really vital because ultimately blessings of these things that are in the regulatory gray arenas can only happen when. all the participants give it the green light. Generally, when you get the green light

is knowing you have some economic benefits and skin in the game, and Cantor is going to be able to drive that, in my opinion, for the American interest, part of it, of course, is now in place with the political administration itself, but these representations are really important. It's also why I think that

it was critical that tether partners with only SoftBank. I actually just cannot imagine any other quasi-sovereign entity that will be so willing to help a cause as an American ally in the ways that the U.S. is number one ally at this moment in time, both financially and perhaps even geopolitically, is Japan.

And having that bridge with America and Japan at heart with cancer is almost, I just could not imagine a more perfect triangle in having everyone's interests aligned. And I think that's the most important thing I play here. This is so fascinating. So let's talk now about what's trading now, which is this CEP SPAC vehicle. It's tripled in price since the announcement. And we're recording Monday for people who are listening.

I wonder, so not that anything we say here is investment advice, but how would you analyze the current price in terms of whether or not it's a buy? And I'd also be, at the same time that you answer this, I'd also be interested in your thoughts on Matt Levine, who just published a column on this. And it starts with the quote, the basic situation is that the U.S. public equity markets will pay about $2 for every $1 worth of Bitcoin. I don't know why this is, and I am not especially happy about it, but it's true. So in the context of what you said, what do you see when you look at this CEP price? Well, you know, I think in this case, there's just a lot of enthusiasm for the concept of there being, you know, the next strategy knowing that. that micro strategy over the last five years has been, you know, these best performing stock in the market, you know, outpacing the S&P, outpacing Bitcoin, outpacing any precious

metal that you can point to, any tech stock. So if 21 capital promises to be that, once CEP becomes 21 capital, then I can see why folks would be lining up for that to get in early. You know, with that said, you know, I think if you're going to be comfortable buying strategy or buying 21 capital, at two times NAV or three times NAV, you have to get comfortable the notion that these firms' treasury strategies, the strategies that they have been employing and will continue to employ to acquire more Bitcoin in and of themselves have value, that that function is the equivalent of a value-creating engine for any other company, and that ultimately it's creating an earning stream.

And so this is where, getting back to what Jeff was talking about, the difference between percentages and absolute dollar figures, you know, you can look at the dollars that are generated by a strategy through what it is doing through the acquisition of Bitcoin, you'll be able to do that with 21 capital. And you can effectively look at and project those figures forward and discount them back the way that anyone would in valuing another equity.

And so I think that ultimately, by creating these KPIs, especially, again, there's BTC yield, which is the percentage terms and of the Bitcoin that has been accumulated by strategy. And then there is BTC dollar yield, which is the amount of dollars equivalent of Bitcoin that is being created through that same strategy. Because you have BTC dollar yield, you're able to create an equity-like projection and discounted model to come up with evaluation.

So I think that this is going to be one of those cases where some of the traditional financial tools will come into play in terms of understanding what this entity is worth at the end of the day. Yeah, it's a good point, Mark. And I would share a slightly different view, which is that I think it's a common misunderstanding that investors of strategy cares about earnings at all, actually. I think they don't care about earnings. And we're going to see it again with strategy reporting very soon, the stock does. But actually, the volatility of strategy and the stocks never react to earnings in the ways you see it with companies. And the question of how they're going to monetize it, it is likewise the case that I think those who are buying today, CEP at 3X to premium, are buying something else. And what they're buying isn't an earnings monetization scheme.

They're buying a volatility monetization scheme. And so the thing that we're missing here is that even though it's 3x nav, the implied market cap from that number is roughly $10 to $12 billion or so, significantly smaller than micro strategy, which means it's significantly easier to create volatility. And if you believe that investors are actually monetizing that aspect of the stock and not so much on the actual EPS signs of things, there is an opportunity because it is, in fact, easier to think about stocks moving when it's $12 billion, versus $85 plus billion. And this is why I also think that this idea of Bitcoin per share is missing the bigger picture. The bigger picture, in my opinion, is actually volatility per Bitcoin share, which is a new metric that I think I'm going to start working on to showcase how you can actually start analyzing these numbers.

But once you have enough of these peers, I think we're going to see a very strong correlation that the stock prices, richness or cheapness relative to each other, is going to be underpinned by the actual volatility delivery of those underlying stocks. That's a super fascinating concept. I would love to hear once you've developed it, if you want to expound on it on my show. So, you know, when you are kind of looking at all of these factors that we talked about, sort of like the geopolitical factors, the regulatory factors, where we are in the market, especially, obviously the whole tariff situation has really upended a lot of things.

I was curious for your thoughts on the market timing here, and especially in contrast to what the market timing was when strategy got its start. You know, if you look at, look back at August of 2020, which was when micro strategy launched its Bitcoin acquisition program. You know, we were in the middle of the pandemic. you know, there were a lot of questions about inflation and the inflationary impact of some of the stimulus packages that were being proposed at that time and some that had already been put into place. From an institutional level, you know, it was, I think, a couple of months before that that PayPal indicated that it was going to be getting into crypto for the first time. And there was kind of a bubbling up, it seemed, of different things that were going on in the crypto space. Defi, which had not been on a lot of folks' radar screens, suddenly began to be to a greater

extent. And so to a great degree, you know, Michael Saylor's decision to push into Bitcoin in mid-2020 was very good timing, which of course was proven out. during 2021 when we saw Bitcoin really rip and micro strategy, you know, gain the benefit of that. You know, right now, if there was a parallel, I would say that, again, going back to the same theme that I've spoken about a few times already in this conversation, it's the fact that we appear to be on the cusp of a real change in the U.S. market in particular as it pertains to the, the regulatory framework and the extent to which that will encourage investors,

institutional investors, who have been on the sidelines, to get more significantly involved, which almost certainly creates the kind of tailwind that anyone would want to have if they were creating a new investment vehicle around an asset as this team has. Yeah, I think the overlapping feeling that feels remarkably similar in 2020 as it would in 2025, is that those that are taking upon the courageous initiative to do these things back then, and as they are doing today, is that there is this unsettling feeling of a great betrayal.

And so if you talk to Saylor and how he finally came to really see the opportunity of Bitcoin, one of those turning points is understanding COVID and what he knew was being represented by the agenda towards inflation and fiscal dominance. that would allude to an asset like Bitcoin being necessary for a lot of companies and individuals. I would say this is a similar moment for Japan, where 2025 is the year that you found out that the U.S. has accused you of being a currency manipulator, even when Japan has basically done all the things they would have under the social contract of what the Yen-Carrie trade was meant to do for U.S. and pending the entire trade order, Japan, I think also now more than ever standing up for themselves,

and the ability to actually push back publicly in ways I never imagined possible. I mean, for those who have followed Japanese politics, they never say anything up front in the public media about how they feel. It's all done behind the scenes. 2025 Japan's different. And that same energy is a sense of this kind of public betrayal of something you thought you knew but is no longer true. And then gravitating towards the necessity of looking at Bitcoin as a way to hedge yourself.

I think that thematically, as it was true for Sailor in 2020, is exactly. what the world is seeing in 2025. Not that anything we're saying here is investment advice, but I'm just curious, like, if you look at kind of the universe of potential similar investment vehicles that are on the market now for, you know, for non-spot Bitcoin exposure, then how would you think about like which type of investor you might see by anything from, you know, a spot Bitcoin ETF to in particular, I am kind of curious about the differences between something like a 21 versus a strategy or any other similar company, how do you think about which type of investor

might be, each of these might be appropriate for? I think part of it comes down to the extent to which an investor would be interested in a levered play, because at the end of the day, that's what strategy is, a levered play on Bitcoin. that's what 21 capital is setting up to be. And so the question really is, you know, are you looking for that kind of leverage, which, of course, it plays both ways, you know, as fantastic as it is when the price of Bitcoin is rising and micro strategy is reacting accordingly, you know, it's just as painful when you see things move the other way.

Whereas, you know, an ETF is more limited. You know, just the fact that you do have the, you know, the redemption and issuance mechanics associated with an ETF really mean that it's going to play more straight in terms of the price of Bitcoin over time. So it really comes down to just risk tolerance in that regard. And I think for those who are real Bitcoin maxis and believe that we are in the early stages of a bull run, why wouldn't you then try to capture more of that upside by taking a levered position? It's a fascinating question, Laura. And it's one that I thought about a lot, even in the construct

of Bitcoin ETFs. As you know, there's multiple Bitcoin ETFs you can choose from. And I've always wondered, how does someone decide which Bitcoin ETF amongst the various issuers we have in the space that they ultimately choose? Because they're all at some level, fairly distinctly similar vehicles. And I've come to just really understand and appreciate to never underestimate how important values are. And so to the question of strategy and the variance that we're going to see, people are going to align themselves by the belief system they have and what they think the company represents to them in the values they share, in the values you hope that you can enthrust upon and find alignment financially in this manner. In other words, there's going to be folks who look at Sailor as

the ultimate champion for America in the way that he represents an American entrepreneur with American capital investors doing American things as part of the U.S. Strategic Reserve conversations are unfolding. And someone might say, hey, 21 capital looks less American because there's a lot of strange players involved that don't seem to represent American interests. But then you may find someone who says, wow, but Jack Mahler really knows what he's talking about when he's thinking about the future of Bitcoin in a way that maybe Sailor is not entirely capturing for a generation, these conversations actually will also contribute to how people

choose their assets. I agree risk management is the most important thing. And mostly people will care about the returns of the underlying stock. But at some level, when we're kind of at that escape velocity of whether you're up 100% or 200% and the numbers start getting a little fuzzy and funky, the things that you can always assume that humans will do what humans are always best at is finding some cultural affinity to the things they love and the people that reflects their values for. That makes sense. But now to ask this a different way, like amongst this category of these sort of Bitcoin equity plays, which do you think will perform the best? Or which types of strategies do you think will work the best? Like, what do you think will determine the winners and losers here?

I think the winner is the entity that will be able to manufacture the greatest amount of volatility for the minimal capital deployment necessary. to equitize the vehicle. This is my opinion. It doesn't mean I'm right, but I do believe generationally, we are entering a world of hyperfinancialization where people just really want the most volatility as much as possible.

It's not a surprise to me that zero-day expiry options have caught on and is now accommodating for more than half of the index options on a weekly basis. People really like volatility. And so if you can generate it in the most thoughtful way where there's as closeness to big, Bitcoin beta is possible to that vehicle, I think that is important. One thing that strategy did that Mark alluded to is that they actually do have a fairly complex

liability stack, right? They do have a lot of instruments that compete for the attention of equity because of preferred equity issuances and things like this. And you can imagine, and I actually think 21 Capital made this clear, they don't want a complex balance sheet. They've made it very clear that it's going to be simple. And if that simplicity drives more volatility, I think that's going to be potentially. a contender to win. I agree that the volatility and the ability to create more volatility is going to be

absolutely key. I do think that it will be interesting to see which approach ultimately wins out, taking a very simple, straightforward approach, or doing what strategy has been doing, which is trying to find additional pools of capital out in the market, which you've actually seen strategy do in the preferred space, you know, trying to find areas where its particular approach may better mesh with the investment priorities of the asset managers in those classes. So some of them are interested in more of a straight dividend yield. Others are very much about the volatility because that's what's going to drive their return over time. Certainly, if you're a convertible arbitrage player, then volatility is mother's milk.

And that's a big part of the reason why if you look at strategies capital structure, so much of it is composed of those converts. And now the question is, are there other potential pockets of capital that can be delved into over time? Because strategy laid out a plan to be able to raise $42 billion in capital over three years and then deploy that into Bitcoin. Now, 21 Capital is taking a very straightforward approach in this regard. You know, it's just, again, I agree with Jeff. I think it comes down to perception and kind of which tribe investors are looking to align themselves with because there are going to be different approaches.

to a certain extent, it's going to be, you know, which leader do you want to follow into the Bitcoin future? Is it going to be Sailor? Is it going to be Jack Mullers? And, you know, I do think the choice of Jack Mullers was really a brilliant one for a couple of reasons. One, yes, this is someone who very clearly understands Bitcoin and how to execute a strategy along these lines. But the role of the leader of one of these companies, as Michael Saylor has shown, is really to be an evangelist. You need to draw attention to what you're doing with your strategy. You need to bring along those who are already on board and create new followers. And I think that Jack Mallors is going to be very interesting in the role of evangelist,

which he's about to take on in this project. Yeah. Yeah. Yeah. You cannot underestimate the importance of having a chief meme officer, as I tell people. in this world. And it's actually a differentiating feature as I've seen it

with the non-Bitcoin assets. As you guys mentioned, there's other vehicles that have come to life primarily using Solana as a way to back a leveraged play. And the number one question I ask these folks

is who is your chief meme officer? And we can never discount how much Taylor has done for this space in the ways that he connects with so many people and can carry a message through with clarity.

That's a really, really critical component to the success story of these LBEs. So I did want to ask as my last question about these, you know, new Solana investment vehicles that we're starting to see. Do you think this model will work as well with Seoul the way it does for Bitcoin? I have my own personal thoughts on that, but that's why I felt compelled to ask it. Or do you feel like there are certain kind of fundamental differences in the underlying

that would then mean that these similar assessments? sort of equity plays are going to actually play out super differently. And by that, I mean, Sol versus Bitcoin. I think that there are some fundamental differences here, one of which is that just in terms of the underlying cryptocurrency itself, you know, Bitcoin is unique in that only 21 million Bitcoin will ever be mined. Salana has its own tokenomics and its own inflation structure. And just that alone makes it very different. I think on the beneficial side is the fact that you do have stakeable cryptocurrency with Solana, which translates into the potential for yield for investors.

You also have some of these companies that are executing on these strategies, actually operating the validator nodes associated with them, which does create some flexibility from a strategic standpoint, you know, you can see the owners of Elitator known, you know, executing secondary transactions and things of that nature. So there's definitely some creativity that the new Salana structures are going to be able to access. But I think at the end of the day, just the difference between the underlying cryptocurrencies is the single biggest differentiator. And wait, just to make it super clear. So basically, you feel, like because of the inflation and salon that these equity versions are just going to be not as appealing

as for Bitcoin? I think it depends on who the investor is because if the lead here, the interesting thing here is yield, then this is yield in a more traditional sense than what we're talking about with BTC yield, which is effectively compounding. This is more I'm going to generate yield. It is going to be accruing to me and I'm going to be able to pocket that over time. As opposed to what you're seeing with BTC yield, where it's the entity that I'm owning is able to amass more Bitcoin and effectively compound that, which through my ownership of the equity will accrue to me. But that's a different proposition.

I agree with that. The way I see it is that there's essentially three dimensions to compare and contrast. And the first question we have to ask is if this is actually meant to access the credit market, the way that's, that strategy has that now Solana will venture into, the collateral matters because actually everything about credit spread is underwriting the chance and probably of default and what your recovery value will be. And so Bitcoin has a very clear and clean adoption and narrative to how people think about that LTV and what it represents in the worst case scenario.

It's not as obvious, in my opinion, for non-Bitcoin assets today, despite the amazing trading volume and breadth of productivity that's added. And if you're going for the credit game, the jump to default risk in that segment will always matter. So that will look different from Solana. The other thing is the volatility. However, helps something like Solana, where volatility is good, as we've just talked about it. And Solana is more volatile than Bitcoin. So actually, if you're thinking about harnessing and harvesting all of those great features

that is bringing this financial engineering technology to more volatile asset, Well, that actually is maybe more interesting for Solana than it could be for Bitcoin. And then the third thing, which is Mark, as you rightfully mentioned, the productivity of the underlying asset. Today, Bitcoin actually does compete with two conduits, right? There's this micro strategy version, but there is also the Bitcoin Spot ETF, which people love to hold because they know what it is. There is a valid question, in my opinion, as to how to assess Solana in that construct, where if you're not delivering the total return of an asset in the ways that a participant, in the broader ecosystem of that value capture framework, that there may be a sense for yield that is being deprived

where only an operating company can truly bring it to the level that demands customer satisfaction. Now, we don't know exactly what that's going to look like in the ways that legislation has yet come without clarity to the staking for ETS, but what I'm pointing out here is that asset productivity also matters. And in this case, Solana is a little bit more complex, and there could be more value delivered

with a properly done active management component. So that's only if you're kind of purely looking at the assets alone, but you would still need the chief meme officer for it to be like a fully level playing field, basically. 100% percent. All right. Well, where can people learn more about each of you and your work? You can find me on Twitter.

I'm at DGT 10011, or you can find us at bitwiseinvestments.com. Happy to chat any time. And I'm with the benchmark company where we're putting out research every day. I'm also on LinkedIn. So we do post on there as well. Perfect. Well, it's been a pleasure having you both on Unchained. Thank you. Thanks so much for joining us today. To learn more about Jeff and Mark and 21, check out the show notes for this episode. Unchained is produced by me, Laura Shin, both of Matt Pilchard, Juan Aranovich, Megan Gavis, Pamma Jimdar, and Margaret Curia. Thanks for listening.