What Bitcoin Did - Is Michael Saylor Trapped? STRC Explained | Adam Livingston

Episode Date: June 24, 2026

“The market is trying to find a villain right now—and Saylor is that guy.” Adam Livingston explains the pressure building around Michael Saylor, MicroStrategy and STRC as the preferred stock trades at $88, well below its $100 par value. Is STRC broken, or is the market mispricing Strategy’s credit risk? Adam explains how STRC works, why its yield has climbed above 13%, whether it can recover to par, and what Strategy’s capital structure means for MSTR shareholders. We also get into dilution, dividend coverage, Strategy’s use of its cash reserve and whether Saylor is now forced to keep accelerating his Bitcoin strategy. We also get into the Bitcoin bear market, the possibility of a market bottom and why Adam believes the current environment is presenting a major buying opportunity. In this episode: Why STRC is trading below par Whether Michael Saylor is trapped The risks facing MSTR shareholders Bitcoin treasury companies and “digital credit” Bitcoin’s potential market bottom The Fed, inflation and monetary repression THANKS TO OUR SPONSORS: ANCHORWATCH BLOCKWARE LEDN BITKEY SWAN CAPE FOLLOW: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Adam Livingston: https://x.com/AdamBLiv

I think that the market is trying to find a villain right now, and Sailor is that guy. Like, he'll be the hero in the bull markets, and then in the bear markets, you know, he'll be villainized by a lot of the community. I do think that they did make a misstep when they used that cash reserve to pay off that $1.38 billion of convertible debt. You have to think of how the market is pricing the risk of the instrument. And that's simply what it is. It's just the simple fact that right now, if you go to their transparent information, you can see that right now. the effective yield is probably slightly over 13%. So really at the end of the day, it's simply the market signaling to strategy, hey, in order to essentially by Stretch, if we want to take

our money, buy your equity, then we need to be compensated above 13% right now to take on that added risk. All right. Let's do it. Adam Livingston, thank you for coming on the show, man. This was a bit of a last minute one. Stretch has been having a real tough time for the last week or so. And I thought you were the right guy to get on the call and figure out if Sailor is trapped in this trade. But welcome to the show, man. Thank you, Danny. I've been a long time fan of the show. So thank you so much for having me. You texted me last night at like close to midnight my time. I have a new kid at home. She's about seven weeks old. And I thought, will I get some sleep? Will I be sleep deprived? Can I even articulate my thoughts? But we're going to give it to go. So thanks for the

invite man. I'm a huge fan. No, thank you for pulling this out of the bag. That's, it's impressive. With a seven week old at home. I don't know if I'd have said yes to that, but thank you for coming on the show. So I want to start with the stretch thing. It's trading at like $88, just under $89 right now, way below what's meant to be par. How big a deal is this? Is this an existential threat to stretch? It depends on how you define existential threat, of course. But in my opinion, no. ultimately it's an equity. It's a credit hybrid equity thing. You know, it's a credit like instrument and an equity wrapper. So you have to think of how the market is pricing the risk of the instrument. And that's simply what it is. It's just the simple fact that right now, if you go to

strategy.com and you go to their transparent information, you can see that right now the effective yield is probably slightly over 13%. So really at the end of the day, it's simply the market signaling to strategy, hey, in order to essentially by stretch, if we want to take our money buy your equity, then we need to be compensated above 13% right now to take on that added risk. So what a lot of people do fail to understand, though, is that there is no stable coin peg. I do see a lot of thought about this peg that's broken. And to be fair, I do think there is somewhat accuracy with the term because they have something that they call the par stability mechanic, I think is the actual phrase that they

use. And at the end of the day, it's simply that, hey, we're going to raise the dividend based on a volume weighted average price guidance every single month. If there's too much volume, if the VWOP's below a certain price, then we'll be more than happy to raise the dividend. I expect that we'll see that. And then on top of that, once the stock actually trades at $100 or above, above that par value, on the other end, you have strategy there issuing more shares into the market. So I think a lot of people forget that if that ATM at the market facility wasn't in place, then the effective yield would actually be driven down a lot more because of the demand. So there is a par stability mechanic, but I do think there's a lot of people that don't understand

whether or not it's like a stable coin Terra Luna peg. I think that there's lots of comparisons made. But no, I don't see anything wrong with it. It's just the market saying, hey, we want an additional percent to be compensated for holding this thing. So, I mean, it's not the first time that it's traded below that par value of $100. Like in, when was it, in sort of November last year, it traded way below. But this is definitely the furthest below. And it's not actually traded at par since, I think, mid-May. So it's been over a month now.

Do you think it will get back to par? I do for sure. Yeah. I just look at the overall credit quality of the company. And I see they have decades of Bitcoin dividend coverage. They just raised $300 million last week. So if you look at their year-to-date capital raising, they are raising about 18 times what their daily dividend bill is or their monthly dividend bill.

So the capital markets access remains open. They can continue stack and Bitcoin stack and cash. I do think that they did make a misstep when they used that cash reserve to pay off that $1.38 billion of convertible debt. So there's been a few missteps that strategy has made in my time as a shareholder. But ultimately, I don't think there's anything existential. It's just the market wants an additional percentage point, the effective yields up. up and then the overall credit quality, I do think, Will went out, and it doesn't help when Bitcoin's down 50%. And timing didn't help either because Bitcoin dropped like $23,000 in no time.

They paid off that debt and then Bitcoin went from 83K to 60K. So that's like, I don't know, what the exact percentage is, but 20% of your Bitcoin value just immediately going away. So that doesn't help the optics either. That, um, sort of retiring that convertible debt is something that I didn't understand at all. Like I, I'm not sure what the thinking was behind that. And I don't know if the company have sort of aired that and said why they did it. But I thought that cash reserve was there. So you had dividends for two years in cash. There was no reason that strategy were going to sell Bitcoin to pay the dividends. Like they had that as a buffer. And then they got rid of almost all of that. I actually, I just saw before we

started recording overnight my time, I think they might have hit the ATM again and put a load more cash in a reserve to do that. But it made no sense to me. That convertible debt wasn't due until I think 2029. Like, why did they do that? Yeah. So the soonest that the debt was putable, where I believe that the bondholders could like ask strategy to repurchase them. I think it was in September of 2027. So I agree with you. Still a decent length of time away, right? So I agree that it was a misstep. But, you know, giving strategy the benefit of the doubt, I think, when you look at the way the equity was trading and you look at the true MNAV of strategy. There was a hefty premium on the common stock. And so if you're going to pull the lever on selling MSTR and

if it's net accreted to the shareholders, I would have rather had them do that, to be honest with you. I think that probably tap in the USD Reserve was not the right call. And what's really interesting is that when you compare the USD Reserve of strategy to that of Strive, it is really remarkable to see how the market is pricing both of these digital credit instruments because we both know that it's like competing for retail flows right now. Sailor's coming out and saying stretches 80% held by retail and I'm not naive enough to think that SATA isn't competing for the same flows. But it's something like Strive has 43 times less Bitcoin than strategy or strategy

is 43 times more Bitcoin coverage. But because Strive has 11 more months in cash, cash or eight months now, you're just seeing a huge discrepancy in how the things are trading. Now, obviously, because of the outstanding SATA, the volume is a lot smaller, so you need a lot more liquidity to move STRC. But it's interesting to see how the things are trading. But yeah, I would tend to agree with you. I don't think that use of the reserve was a good move.

If you look in the SEC filing, or maybe it was the STRC prospectus, I can't remember exactly, it must have been the filing after the USDA Reserve was announced, but they do talk about how they intended to use it. And then they also had the phrase something along the lines of we have total discretion to use it for whatever we want to. So the debate about whether or not they misled anybody, it's like, well, the language is in there that they have discretion. So but yeah, as an overall strategic move, I don't know if I agree. Yeah, like the misleading people is not something that, I mean, I'm not a microtractory shareholder. So it doesn't turn me at all really that part of it. It's just whether it was the right move. I don't, I don't understand it necessarily. But like, I believe they've just raised or just hit the ATM to raise more money to have that sort of backup. So I think that's probably a good move. But the thing that I don't necessarily get, another thing I don't necessarily get is like why would you be a MSTR shareholder when it seems like you're just going to get diluted at sort of every opportunity? Yeah, I think that if you look at history and you look at the

overall total returns over a long time horizon. It's pretty apparent that MSTR has considerably outperformed Bitcoin in Fiat terms. We were just talking before the show. As we get further into this Bitcoin bear, I become more convinced that holding the treasury companies definitely isn't for everybody because of the added volatility. And it requires a decent degree of understanding of sailors' financial engineering. But overall, I do think, you know, you look to history, you look at the strategy, can they continue to issue equity that's accreted to the shareholders? Can they amplify the Bitcoin exposure via the preferred stock issuance? And then if you think that they can pay those dividends, I mean, that's mechanically how the Bitcoin exposure is amplified.

So, you know, it's added risk. You are taking the counterparty risk. You don't own the Bitcoin. You are economically exposed to the residual. But, you know, some people like that trade. I'm an MSTR shareholder myself. I buy Bitcoin every day. I don't own Stretch, but I do like with my risk capital.

That's the way I think through it. Like I think of Bitcoin is saving. And then Bitcoin is the hurdle rate in my mind. Like if I'm going to beat, I need to beat Bitcoin if I'm going to invest in inequity. So I am an MSTR shareholder for that reason. It's, um, just getting back to the Sata versus Stretch thing, it's been interesting to see Satter do quite well. And I think one of the points you made before, I could be wrong on this. But like, you said that stretch is 80.

percent retail. And I'm purely guessing here, I would imagine Sater is not the same even higher. Like they seem like very retail products at the moment. And is part of the problem that if you play sort of retail games, you win retail prizes. And like this is, this is part of it. Like I'm sure huge liquidations played a part in stretch dropping to like $83 or whatever it did. And I also think you said that the market is deciding that the cash reserves are sort of the thing that they care about more. I just think it's higher yield. I think people just chase higher yield. Yeah. I don't know how you kind of balance those two things out. Yeah. I think that what we're witnessing right now in the market, Danny, I think you're spot on. I should have said that actually,

because I agree 100%. I've talked a lot about this where I saw this study recently. I think Pierre Rochard tweeted it out or somebody else. I can't remember exactly, but it was essentially Bitcoin, like how much of Bitcoin is explained by an efficient market hypothesis, like just Bitcoin itself, not even like all of these crazy derivatives that, you know, these market participants continue to come up with, at least these issuers of the digital credit things. So like I continue to see pricings in my mind with the strategy preferred that to me, in my opinion, like just totally don't make any sense at all, especially when you look at strike, for example, where you have an embedded call option on MSTR going up, which is essentially a call option on Bitcoin going up,

and that thing will trade at the same yield as STRC. I see a lot of these weird mispricings. So I don't think that Bitcoin can be explained by the efficient market hypothesis, and it's almost like these things aren't either. But I agree with you 100 percent. When they're competing for retail flows, I don't think that a lot of people are doing the hard risk analysis of them. to be honest with you, I think that they're looking at a headline yield number and think, oh, I'll get paid daily and I'll get paid more money. They get that dopamine hit. So I agree with you. And did the daily dividends from SAT have an impact on the stretch? And is that part of the reason we've had this drawdown? Because I know that before Stretch were doing sort of bi-monthly dividends and before SATA were doing the daily, people were swapping between the two, like getting in the lock-in date, getting the yield and then moving back. And that kind of got completely armed out. Like the arbitrage was there. that's gone now because people have to hold SATA every day if you want to get the dividend. Has that meant that the retail has gone there, parked their capital there, and SATA now has less inflows? Does that like, sorry, the stretch has now less inflows? Does that play any part in this?

Yeah, I think it has to. Like, there's no way of getting around that for sure. I think that we are so much in an echo chamber with, number one, Bitcoin itself in terms of the broader world and then on top of people even know what stretch and SATA are. So ultimately, like, they've issued $10 plus billion of STRC in a year. I think that's been a success for them. They paid every single dividend on time. So, like, it's going to take a while for the track record to really open up strategy only has a B minus credit rating right now.

So we're in this weird period where they have to prove themselves, prove the credit quality of these instruments for a number of years maybe before you see larger institutional capital pools even think of this meeting mandates, for example. So right now we're just in an infancy stage and there's highly little doubt in my mind that a lot of people didn't sell stretch to go to Seda. Yeah, it's been, I want to pull up a chart actually. Let me just grab this. Cool. This is by my boy, Checkmate. Can you see this? Yep. So one of the interesting things this chart to me. He wrote a newsletter piece on on stretch a couple of days ago is the number

here at the end. So I believe, and someone can correct me if I'm wrong, but this shows that there is no stretchholder that has made money at these prices, including the yield, including the dividend. Like, this is underwater in quite a big way. And I want to know your opinion on this. And if this signifies anything about the digital credit narrative, maybe not playing out how people expected. Maybe, like, is it still working? Is it real? Yeah. First thing I'd say, I don't know if I need to fact check this. The graph is really small, so I don't know exactly

what it says. I see the price for the stocks. I'm assuming here. It's this stretch total return is at 99.75. So it's, but it was IPOed at 89. So it's a positive return. So I actually just ran the math on this. It was IPOed on, I believe, July 20. And Stretch has an overall total return because it's only, like, if it was IPO to 89 and it's around $89 today with every single successful dividend paid, then they're at about a plus 6% total return. So ever since the Stretch IPO, Stretch is about plus 6% total return while Bitcoin is minus 50. And so I've actually made this point where people say, Adam, like, you're cherry picking

data. And I'm like, well, I'm not really. I'm looking at the entirety of the data set, but I decided, okay, fine. I actually plugged it into AI just to number crunch everything. And I found out that of every single possible holding period between Bitcoin and STRC. Stretch has won out on 86% of all possible time horizons since the stretch IPO when you're comparing it to Bitcoin. So the stretch return is when you're including the dividends, it does go up into the right versus Bitcoin falling off 50%. So when you couple that with every dividend being paid successfully, and there are times of high volatility, like now in February, for example.

But overall, it's been a success. The dividends have been paid. It has stripped the volatility out of Bitcoin considerably, just showing that it's still a total return positive after a 50% Bitcoin price correction. So 86% of all possible time horizons since the IPO and like at least total. return since the IPO has been positive. Yeah, I'm in the same boat. I heard back from Checkmate. So the first chart that I showed you, which was the stretch returns, his point was that anyone who bought a par is underwater at this point, and the other prefs are below IPO on total return basis. So, and like the question was that like, I guess, are these prefers working as intended. Yeah. Me and Checkmate must have different math because I ran it today. It's on my X account. I have a totally different number. It was $89 or $90 at IPO. And then we-

But he's saying anyone who bought the $100 peg or $100 par basis is underwater. Yeah. Like that is well, I don't know. At any point in time. Yeah, then probably yeah, definitely. Yeah, that's the, sorry, I was misunderstanding because his line was for like a month period. So now we're cleared up. But yeah, yeah, 100%. And then the other one that all the other prefs are below IPO price. Yeah, yeah, on a total return. Yeah, he's correct about all that stuff.

Yeah. If you would have bought at 100, yeah, you'd be underwater right now. Even after factoring and all the dividends paid, that's true. So what was your question? And so, well, and the other prefs being below IPA, IPO price, including like with total returns. are the prefs actually working as they were intended? Yeah, I do think so. I think that when you look at the amount of capital that's raised by them,

like we are seeing some higher effective yields, but nothing that signals that the dividends can't be paid. You look at the capital markets access, they are just like, they're having their most successful year of capital raising ever, like 2026 with a Bitcoin bear market. They're still raising more money and buying more Bitcoin at a faster pace than ever, at least in a January through now year-to-date basis. So when it comes to the credit quality, I think the risk is mispriced.

I think it's wild that they have to pay that high. Ultimately, they raised billions of dollars and they bought Bitcoin. So I think like that's a win for them. And then the people who bought them, I think, yeah, like just like with anything, if you would have bought Bitcoin in October, you would have been down 50% right now. So buying stretch, you would have mitigated a lot of downside. That's just mathematically true. So yeah, I think that they're working just as intended.

I don't think anything's broken. I think their credit quality is being questioned by a lot of retail shareholders. But overall, I think the credit quality is great. And I think when Bitcoin returns, you'll see them trade back up just like how they were last May. So I think that's what will happen. Do you want to pay less in taxes and stack more Bitcoin? Of course you do. Well, by mining Bitcoin with Blockway, you can.

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but again, that adds leverage. They can and have and probably will continue to dilute shareholders. Do you see that as the best option? Because the other option is sell Bitcoin. And like as a strategy shareholder, is selling Bitcoin not the best thing for you? If they just start selling enough to pay the dividends, the Bitcoin market can easily absorb that amount of money. I think it's, is it around just under two billion a year or something like that, that they, is that right? That they owe? Yeah. The Bitcoin market can take two billion a year in sell side. Like, is that the best option? I don't think they'll do it, but is that the best option. Yeah. What's really cool is that they have so much optionality. As a bitcoiner who like, I hate selling Bitcoin, I don't, that doesn't drive well with me,

to be honest with you. It's maybe a personal preference where this idea of selling Bitcoin, the market absorbing, it's $1.7 billion is the annual dividend obligation. And do I think it can be done successfully? 100%. Like the total volume of Bitcoin is orders of magnitude higher. Like the market would absorb that no problem, as evidenced by the fact that he bought 48 times as much Bitcoin the next week after he sold. And the price probably went down. So like the market can absorb it, no problem. But we really need to look at their total optionality with the true MNAV. People continue to look at the basic MNAV with the market cap in the

numerator, the market cap, which is like the value of all the shares, you know, divided by the Bitcoin nav. That's not telling the entire story because that's not looking at the preferred stock and the outstanding preferred shares. And then so strategy does a better job with enterprise value where it incorporates the overall, just a more cohesive picture of the capital structure. But if you look at everything with the outstanding preferred stock and you essentially do like an algebra algebraic look at the capital structure and find out what is the senior claim Bitcoin? So like when they issue stretch and they use those proceeds to buy Bitcoin, you have to think of the residual, what's left over economically for the MSTR shareholders. And what you'll find is that

the residual value of balance sheet value that's backing. the MSTR shareholders, it's not just the Bitcoin, it's also the cash, because as an equity holder, you are exposed economically to the total residual, not just the Bitcoin, which is why Bitcoin per share is incomplete. But if you crunch that MNAV number right now, last time I ran the numbers, there's like a 1.2XMNAV right now. And so Sailor has come out and corrected people online about this, where if you look at the total capital markets activity, it is accreted to MSTR shareholders. So in terms of a lever to pull, that would be my number one by-fifference. far because the stock is still trading it at 15 to 20 percent true premium. And I think that Bitcoin

is close to a bottom. I could be wrong. Maybe it goes down to 50K or something, but I don't think that the premium will probably drop any more than it is now. And if it does, like if the true C-E-B-E-M-Nav goes down to one, they only have to dilute the shareholders five percent per year to pay that annual dividend. And that's if they don't tap the Bitcoin or the cash. So to me, I'm like, the MSTR shareholders are seeing if all the premium evaporates to the residual, they would have to dilute the stock only 5% per year. In an exchange, you get that 40% Bitcoin amplification. So I think a lot of MSTR shareholders look at that tradeoff.

And if they're bullish on Bitcoin from a pretty big overcorrection, the math makes sense for them. It's interesting. Because I was saying to this before we started to show, I get so much hate for like trying to sort of ask these questions about treasury companies. Like I've said a million times I'm skeptical of them. And honestly, like I've come to the realization. The truth is I just don't really like them. Like my gut is just selling me.

I don't really like them. There's nothing wrong with that. I don't like the narrative of digital credit. Like I don't like all these sort of financial terms around Bitcoin. Like Bitcoin is just Bitcoin. Like I like the idea. I like what strategy started as. I like having a business that generates money.

and putting that money in Bitcoin. Awesome. Like, I love what Block are doing. I love what Tesla and SpaceX do. Like, having just a cool business that makes money and that money goes into Bitcoin is awesome. What I'm not a huge fan of, and again, it's not that I think it's going to fail or I don't think it'll do well. It might do amazingly well. I just don't like it. And I feel like there's a lot of the sort of, at least Twitter world, that are kind of coming to that same conclusion. Like, there's been a lot of hate on Sailor. And to be fair, I think probably that's bare market things. I'm sure say that it'll be fine. I'm sure he's not losing sleep over people like me complaining on Twitter. But like, why do you think this hate has sort of arisen?

Yeah, that's a really good question. I think that there is a philosophical split in the Bitcoin community that's like really eating it away at kind of our previously, at least better vibe that we had going on. I think that it's because people are defining Bitcoin's win condition differently. Like you just said, you don't like the treasury companies. And that's a very common viewpoint, right? now, I think a lot of people, they, you know, people come to Bitcoin through a variety of ways, and they have their own win condition attached to it because to me, like, Bitcoin is this monolith that's just this amazing, pristine, free, neutral monetary network. And then a lot of people like to attach their subjective, often political philosophy win conditions. What does it

look like for Bitcoin to win? And I think a lot of people are finding disagreement about that. a lot of people, you know, they'll say Bitcoin doesn't win until government is abolished and we live in an ANCAP society where we're all transacting equally. And then there's some of us that are saying, well, I don't know if that's necessarily a pragmatic thing. Like Bitcoin has improved so many people's lives and it's 16, 17 years since it, the Genesis block was mined. So I think it's really a philosophical disagreement about how Bitcoin will win. Like, what does it mean for Bitcoin to win? So I don't know what your thoughts are on what it looks like. like for Bitcoin to win, but maybe that's the source of the disagreement.

I mean, that could be it. And like, to me, Bitcoin is winning. Like, I wouldn't say it's already won, but it's winning and I think it will continue to win. But the problems that I have around it and the areas of concern that I have are like, I don't love that one company has 4% of the Bitcoin supply. And again, there's nothing I can do about this. And then, like, they can use Bitcoin however they want and they should. But I don't love that they have 4% of the supply. Like, I don't know where the sort of, crucial number is where it's too much. But like if it's 80, 90% of the supply, clearly too much. Is 4% of the supply too much? Maybe. I just don't know. I don't love that.

And like the other thing that I'm unclear on is whether this is now not actually attracting institutional investment, but but dissuading institutional investment. Because like you said, Michael Saylor and Fong have come out and said like 80% of the people buying stretches retail. And to me, it's like, that's not a good thing. Like, I thought this was meant to be aimed at institutional type investors. And our institutions looking at this and being like, let's wait and see how strategy shakes out. And is it actually putting people off? Are they concerned that strategy has too much Bitcoin can pretend like, you know, quote unquote manipulate Bitcoin? Like, these are the sort of some of the concerns that I have around it. Yeah. It's tough because

obviously it's a question of like wealth inequality and the genie coefficients. Like how much is too much. and like we know there's a finite amount and humans have never been face to face with true scarcity before. So I find it like psychologically fascinating how us humans are still absorbing it. I think we haven't even thought through the proper ramifications of Bitcoin yet.

In terms of the institutional capital thing, I think that what you're seeing when you look objectively like over the past couple years, a lot of people say that Bitcoin had its IPO moments, the OGs are selling like crazy. The individuals are selling their, coins hand over fist to the institutions. Like that has been the trend since the beginning of 2024.

River does a great job where they'll post their graphic about this every quarter or so, where it's like, you know, I don't know if it's 10 or eight consecutive quarters where like hand over fist individuals continue to sell to the institution. So I think that you raise an interesting point. Like long term, will that be seen as a negative? But overall, when we look at the trend of this institutional monetization of Bitcoin, I think it's actually quite the opposite. We've seen a lot of inflows.

The ibit holders are surprisingly sticky, I think. So yeah, I think that you raise a very interesting question long term, but to me, I'm like, I don't know if it's a cause for concern as of yet. If Saylor gets half of the network, maybe it will be. But, yeah, thinking that hypothetical future is an interesting thought experiment. Yeah, I was reading Checkmate's recent piece on this. And he raised a point, and I think is super valid. It's the like in a bear market, the market goes hunting for the most leverage people

and they like to take them out to the woodshed and chop them up. And he put a chart in there, which I'm actually struggling to find, but I'll put it on the video. So this shows like where the first impairments are for strategy. And it's around 25K. Like I don't think we're going to go to 25K, but I don't think it's impossible. And so do you think that the market is looking at these liquidation levels and will potentially try and hunt them. Yeah, I think that's, it depends on what you mean by hunt exactly. When it looks like Checkmady's math is spot on with mine where it's $25,000 where the

common equity is impaired, where I see a lot of people get, what I see a lot of people get wrong is simply that this is calculating kind of that residual that I was just talking about where the Bitcoin net asset value would equal the senior capital. So like the outstanding preferreds in the debt, so there's no room for the common equity. But when we look back in 2022, this exact thing happened. A lot of people don't realize this, but if you would calculate the residual exposure for the MSTR shareholders, at the bottom in November of 2022, it was negative 14,000 sats per share. So it was in the negative, and the market never valued MSTR at zero. So a lot of people run this math and they'll say, you know, MSTR goes to zero. And it's like, well, that's

separating how the market values the residual versus how the residual is calculated. So essentially, it won't go to zero because there's kind of an embedded call option where, hey, maybe Bitcoin will go up again one day. And obviously, you know, price is sentiment and people will look for those opportunities. The stock was trading at a 0.7XM nav that invites the opportunity for people to snipe that leverage Bitcoin is such a low price because your return is just. higher. So it's impaired in the sense where the residual is calculated at zero, but like in terms of MSTR going to zero, I just don't see that happening at all. When you actually run the math,

it's about 2022, they had minus 14,400 sats per share at the bottom in terms of Bitcoin exposure for MSTR shareholders. And now it's $145,000 today. So it's a huge gulf, like, the capital structure is so much healthier. So, like, if we go to 25K, I don't think that it will. Like, that's a crazy level of oversold. But, yeah, MSTR doesn't go to zero when that happens. It's just the residual calculation. Okay, that's good nuance because I wasn't fully aware of that.

And I actually didn't realize that it traded below that in 2022. That's interesting. Yeah, yeah. 2020 is way worse for strategy, like crazy negative exposure. And I think the stock was a bottom like $11. So yeah, it's quite of a different story than today. What's your take on the whole digital credit narrative? Because, like, to me, Bitcoin's just money.

And I don't fully buy into the digital credit sort of narrative that's growing amongst the Treasury companies. Like, what's your take on that? Yeah, I don't mind the term digital credit. I think that, like, you're evaluating the equities through a credit risk lens. This dictionary definition of provisioning money for, for the expectation of a return. Like, to me, it fits the dictionary,

Merriam-Webster definition, so a lot of people take issue with it. I don't take issue with that term. I agree with you. I don't like the digital money term either, though. There was this clip. Me and Jeff Walton, my friend from True North, Jeff, with my recent appearance on True North,

we kind of got clipped up where a lot of Maxis were freaking out on us. I think that a lot of people missed the context of the entire situation where people were acting like, I was advocating for digital money that's like tranched credit replacing Bitcoin as a medium of exchange. I view it as like if some people want to do that as like an incremental improvement over traditional fiat, like if the capital goes to Bitcoin, I would view that as a net positive for the overall capitalization of the Bitcoin network. But yeah, I'm with you. I think the idea that you can like tranch out.

these risk tranches from a security and that's somehow money, I don't buy that narrative. So I don't like the digital money thing, but digital credit I don't have an issue with. Okay, fair. With strategy, we're sorry, with stretch now trading it, like, it's $88 postmarket. This is going to take a long time to get back to par, right? I think last time it traded significantly below, it was a couple of months until it got back to $100. This is going to be sort of a prolonged stretch bear market, I imagine. Do you agree? It's tough to say. because on February 5th, we saw the largest nominal Bitcoin crash in the history of the asset. And Stretch rebounded in one day.

So I'll be honest with you, I expected kind of the same thing where I was like, man, a rebound to 98, that should be expected. And we actually did briefly touch 97, not after this Thursday, but with this recent overall price stress, we did see it like reached 97. I think that overall they're going to follow the guidance that they've set forth with the volume weighted average price. If the VWOP is below $95, they will probably raise the dividend at 12%. That leads me to wonder how many of the people chasing that headline yield with SATA at 13. Like, is that enough to bring it back up to par? You saw Fong Lee today tweet that he bought a million dollars worth of SCRC, so the CEO is doing his part, I guess. but yeah I do think it'll go up to part just because I think that overall risk is mispriced with

the strategy preferreds I think the credit quality of the company is amazing and I think that it's crazy that strategy even has to pay 11.5% if I'm being honest with you. I think it's it's super wild that the dividend rate is as high as it is. It tells me that the overall broader market doesn't appreciate Bitcoin and as a hardcore bitcoiner I hate that. I mean that's something I do agree And if I was ever looking at buying stretch, like, this is, I imagine one of the best buying opportunities you might ever get. Like, I don't think that this is going to wipe the right. I think it will get back to $100. Like, if you were into it, like, I get why you buy it at this point. Like, it seems very attractive. The interesting thing, though, is like,

Bitcoin price is going to determine some of this. And I feel like this works both ways where strategy can have, like, a really good impact on the price. And I think, think right now, this is the big overhang we have. I think if we didn't have stretch trading way below, I imagine that Bitcoin price would be doing better than it is. I don't know if you agree with that. Yeah, I might have misunderstood you. Are you saying that the Bitcoin price is being influenced by the stretch fiasco? I wouldn't be surprised if it was because people are then baking in like the Michael Saylor risk of Bitcoin. Yeah, I think that I'm not so sure if I agree with is being a huge, because I do, like, going back to what I said earlier, I think that we are in a

super niche of a niche of a niche. Like, I don't think people know what digital credit or STRC particularly are. Even amongst Bitcoiners, I see so much misunderstanding about it. So I don't think they have to understand it to look at this. In fact, maybe it actually works because they don't understand it, because they might look at strategy being like, this looks like it's at risk of blowing up, therefore Bitcoin's going to go down. Like, I think it can be that simple. Yeah, I just don't think that bitcoinsers who are orange-pilled, they're going to be dissuaded from buying Bitcoin because of sailors' preferred equity. It might have a, I'm not saying it doesn't have a portion of the influence on the price of Bitcoin. Of course, like, if you understand Austrian economics and human action praxeology, it's the price is the reflection of an endless, uncountable number of variables.

But like in terms of an overall driver, I don't think that that's sizable. I'd be interested to see, like, research on, on the sentiment behind Bitcoin and Stretch or something to maybe explore that further. But on its face value, I'm not so sure if I agree. But I think you're right. Like, I don't think Orange Pill Bitcoiners who are just stuck in Sat's care. And I think, like, they'll still be buying consistently. But it's the big money that I wonder if this is putting off. Yeah, I think it's definitely a possibility.

I just don't know. It's difficult to say to the extent that it is with, it's like an, unfalsifiable thing right now. I just wish that we had more market data to tell us that. But I think that it's an interesting theory. If you hold Bitcoin for long enough, there's probably going to come a time when you need some dollars. Maybe it's for a business expense, a tax bill, a property purchase, but whatever it is, you might not want to sell your Bitcoin. That's where Leiden comes in. Ledon lets you borrow against your Bitcoin so you can access cash without selling your stack. They've originated over $10 billion of loans since 2018, and they've operated through multiple Bitcoin

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astrology for man, chart squiggler guy. But when you look at so many indicators that mark bottoms, you look at the deviation from the four-year moving average, which to me is like the most bullish indicator ever, how that line just continues to compound it over 20% per year. We're like in the single-digit percentile

with a deviation from the four-year moving average, Bitcoin priced in gold is like cheapest since 2010 level of percentile. I don't know if you're a power law guy, but the same thing there. Like we're seeing so many indicators, relative strength index, where we're just seeing the same levels as 2022. It's flashing November 2020 FTX levels. So I don't think a wick down to 50K or even 30K is impossible. Nothing is impossible.

but I think a lot of people are freaking out because that's what happens when you are in like a single digit percentile of Bitcoin's oversold price. So, yeah, I think that given Bitcoin's volatility, a lot of people don't realize this, but Bitcoin's volatility has almost been cut in half since 2022, which is a wild stat. Like the volatility has been crushed for Bitcoin. And a lot of people don't realize that the moves necessary on a daily basis to get you below. like a 40K Bitcoin number or like a FTX black swan after black swan type situation, it is so much more statistically unlikely given the amount of capital that has to move now. So I think that, you know, who knows if we're in an exact bottom, but it has to be close. I don't know if you agree with me, but it seems like we're right there.

Sentiment, I think, is the worst it's ever been. So I don't know. And sentiments always, like, that's kind of the counter trade, right? when sentiment's the worst ever been, you're probably close to the bottom. And I don't go off anything but vibes at this point. Like, I've been in Bitcoin long enough that I sometimes get feels. And it feels like the bottom. I don't know if it is.

But, like, I've certainly been any spare cash that I could possibly get my hands on, has been going into Bitcoin recently. And that's not always the case. Like, it just feels like we must be close. What do you think is going to sort of play out over the next sort of Bitcoin cycles? Do you think we have sort of diminishing returns? Like, because, again, Saylor, obviously, talks about his, like, he has his caggart targets and he thinks Bitcoin's going to continue to

pull them in the way it has in the past, at least somewhat. Do you think that's true? Yeah, as of now, I think when you look at the actual price data and the price performance of Bitcoin, it's tough to argue that diminishing returns aren't a thing. And like a lot of people do this super cringe thing where they'll draw a line from the 2021 top and they'll do a horizontal line to now and they'll say, look, it's been flat, dead capital. But what I like to look at it's a been flat dead capital. But what I like to look at is the year over year, four year moving average compound annual growth rate, where you smooth out the volatility. And you are seeing that, you know, 10 years ago when it was going up 54% per year, year over year, now it's 30, then

29, then 28. I might be making some numbers up there. But that's essentially what it is. You are seeing a decrease in the kegher of the four year moving average. Um, so the people that say diminishing returns, like, aren't a thing. Well, we just saw a huge muted upside with the October 2025 bull run where we were trading at the power law trend, which is way less than previous bull markets. So it's tough. Like, I think that we're going to see muted downside volatility as well. I think that's the most realistic scenario. I think the people calling for 30K Bitcoin like it's some certainty, or smoke and crack, to be frank, I think it's like totally insane. when you actually go to AI and crunch in

the statistical likelihood of moves like that with how big Bitcoin is now. But yeah, I think that overall I'm bullish. The money printer has to print, man, and the Fed's in an interesting situation where they're being triple squeezed with oil inflation and do you cut rates in this environment? Maybe we don't see that for another half year or a year.

Overall, I'm bullish on Bitcoin because monetary fiscal repression is going to be what happens. There's no getting around that. Fiat has no bottom. So long term, I'm super bullish on Bitcoin, but I cannot be speaking with any degree of certainty right now, that's for sure. I do want to ask a question. I did allude to earlier, which is something that I can't get out of my head in that is Sailor stuck in this trade, whether he likes it or not? And this idea that he does have to just keep his foot on the accelerator, keep coming up with new things. And maybe that means adding leverage,

maybe like, whatever it is, is he stuck and he has to just accelerate at this point? No, I don't think you stuck at all because I think that everything they're doing is working. If you look at their KPIs, I don't like Bitcoin per share, Bitcoin yield, but that's up considerably year-to-date. They're raising money at a faster pace that they ever have before. They're buying more Bitcoin faster than they have before. So what they're doing is working. It's an amplified expression of Bitcoin. The amplification ratio is about 40% right now. So I think that when you saw that crazy blow off top where MSTR went to a 3.3. 4xMNAV in November of 2024.

When you have that and then on top of leverage on the way down with Jim Chano shorting the stock and a lot of people taking advantage of that frothy premium on the way down, I think the price performance is largely explainable. And then of course, man,

getting kicked in the teeth with a 50% Bitcoin price correction that doesn't help an amplification story. So yeah, I don't think anything's broken. I think it's largely explainable by those market forces. And with the, like you said he got to 3.4XMNAV, are those days gone? Like, do you think it can ever get back there again as like a MSTR shareholder yourself? Like, do you think anything over two now is kind of out of the question?

That's a good question. It's really hard for me to think of that happening again. I'll be honest with you. I see this critique a lot. You'll see, there's some MSTR maxis out there that are losing their mind. I'll be honest with you. I'm like the biggest strategy bull. but I think it's going to be the most valuable company in the world.

I'm like, Bitcoin's going to $3 million a coin. They're going to have trillions of dollars of assets. That said, some people are losing their minds. They will say, Sailor and Fong, stop selling MSTR, wait for the MNAB to go to a 2.5. And I'm like, you think that the company, like the market's going to give them $80 billion in premium just because, like they're too big now, man. Like I think that me and you probably are in agreement there where like a 3.4. XMNab, you got to think of when that happened. That was when there weren't so many Bitcoin derivatives in the market that you could access with a brokerage account. That was when Trump just

won the election where we were talking about a strategic Bitcoin reserve. You saw Bitcoin move from, I don't remember exactly, 55K in September to 90K. Like, that was like lightning in a bottle, everything going right to hit 3.4 at that time. And that's why Saylor was selling stock hand over fist because you don't squander that opportunity. Like, go get the Bitcoin when the stock is that expensive. So, um, I, I think MNAP will always oscillate just because the price is in the numerator, the price of the company and prices a reflection of market sentiment. So I don't think that like, we go to one and stay there forever. I think that's insane. But also I don't think like, we just go back to a three point four either. I, it's tough because we're thinking of these like

long term hypotheticals. Could MSTR one day command a huge premium because they own six million Bitcoin and they can issue more credit than everybody and Bitcoin is like the new foundation monetary base. That's an interesting question, but it's all like hypothetical. At least in the next five years, I would be shocked if we ever saw an MNAV explosion like that again. Yeah, me too. Okay, I want to get back into sentiment because you mentioned before like this feels FTX level sentiment. And I totally agree, if not even worse. And I've said this before on the podcast, but I think it's true in that when FTCS blew up, if you were a Bitcoin, coin around Bitcoin land, you could look over there and be like huge fraud, scams, like, of course

the market's going to dump. Make sense. Nothing's changed for Bitcoin. Therefore, like sentiment surely was bad because the price was way down. But everyone knew why. And whereas this time, like, prices down a lot. We didn't really get the sort of highs that we expected last cycle. And there's nothing to point to directly and be like, that's why.

And I feel like that's adding to the sort of negative sentiment within Bitcoin world. And obviously, Saylor is now bearing the brunt of that in a lot of ways because people are just mad about something and trying to find someone to blame it on. Is that a bullish sign, though, that we are at these levels? And there isn't some out-and-out fraud blow-up that you can point out and be like, this is why. Yeah, I agree with you 100%. I think that the market is trying to find a villain right now. And Sailor is that guy. Like, he'll be the hero in the bull markets and then in the bear markets, you know, he'll be villainized by a lot of the community.

I think that it is a buy signal. I think that, and it's not even a question of opinion almost. It's almost like a mathematical reality. Just going back to what we talked about, people often forget that your statistical likelihood of higher returns skyrockets when you buy at this level of oversold versus these indicators. And nobody has a crystal ball. You can't predict the future. But it's so fun to like load up Bitcoin's entire price data for every single. day since January 3rd, 2009, or at least the exchange data in July 2010, and just ask it,

like, what are the forward six-month, 12-month, 18-month, 24-month returns of Bitcoin whenever we've been at this level of oversold? And you could do it for like the Fear and Greed Index if you wanted to. And all of the numbers throughout all of history are like triple-digit returns where sometimes I'm seeing them thinking, man, like, I want to like take out a second mortgage to buy Bitcoin right now because like it's seriously that. what it is. Your statistical likelihood of higher returns skyrockets when you buy when we're this oversold. And the sentiment is an indicator. It is a buy signal. It like literally just is. Like the people who bought MSTR call options in 2022 and made $10 million. Like they literally

bought the most leveraged possible Bitcoin at the worst ever sentiment in history and they made out like bandits. So like are we 22 levels of oversole? It's pretty close. But yeah, I think I agree with you, man. Like the negative sentiment is, it's a buy signal for me. I'm like, I've never been more bullish because I understand the mathematical reality of to make money and to go up, NGU, you need to be buying right now. A hundred percent. And it's one of those funny things in bear markets. Like, I, I kind of like perversely enjoy when price is crashing. It's always exciting. There's always stuff to talk about. I don't like they're just dragging out. Like, this bit's boring. And I just can't wait for the tide to turn again. I'm like, I'm

ready for us to go up again. The time pain is awful. Yeah. Yeah, I couldn't agree. But I'm, it's weird. I'm sort of, I have this turbo bullishness around Bitcoin. And if I was to trade, it would get me in big trouble. It's like the big reason I don't trade. But I can't see Bitcoin staying at these levels for long. I hope not anyway. Do you follow what's going on, like on macro side with everything that's happened in the Fed recently? Yeah. I do to a degree. I don't have a total technical understanding like a lot of these macro experts do. But like, I do a lot of analysis on my own channel and then on the Swan Channel as well.

I have a two day a week show over there where I talk about this a decent amount. But, yeah, following the macro side a little bit, I kind of alluded to it earlier. But, like, the Fed's being triple squeezed right now, man. Like, it seems like, like, how do you explain away potential monetary easing or rate cutting? Like, that seems like the battle they've got right now. Yeah. Because when you talk about headwinds in Bitcoin, like, we don't really have one that's necessarily. intrinsic to Bitcoin this time. But like the macro side is the thing. And they seem totally trapped.

Like I inflation's high and they want it. Jobs are pretty good. Like, but they need to cut rates. And how do they do it? But this is very interesting. If people have been paying attention to what Warsh has said leading up to his appointment and recently, he's mentioning things like we need to recalculate how inflation is calculated. And then with his last statement after this latest Fed meeting, Warsh is saying that we're going to be giving less future guidance, like less commentary essentially.

So that's very interesting. Like what does that tell you? To me, it's almost like you need to play your cards closer with any like obvious moves you're going to be making. I'm not quite on the level of like the conspiracy tinfoil hat.

Like he's Trump's puppet and he's going to do the bidding of cutting rates. But those two things are very interesting. I think like they're already being open about talking. talking about how you recalculate it. And we've seen this game happen time and time again. The government lies to us about CPI.

They literally replace rib-eye steak with 7327 ground beef. They lie to us, Danny. And they manipulate the basket. Anybody who knows shadowstats.com, the true government inflation. I know I'm preaching to the choir here, but like we're seeing the same language happening. They continue to change the lingo. And this is very interesting. I saw this recently.

there was a meta-analysis of Bitcoin price action relating to not only the Fed's actual actions in terms of rate cutting, but the market perception in terms of how the media was reporting about it. And the finding was that Bitcoin is the most reactionary asset by far to even the perception of rates being cut or rates being hiked. So like a 25 study meta-analysis of that, to me, that's a very important. big explainer of the Bitcoin price action when you immediately saw this war happen and the polymarket, betting markets, price in rate hikes for 2026. To me, that's like a large

explainer if you look at that meta analysis. That was interesting. I 100% agree. And the interesting thing is like it seems like Walsh is trying to be sort of somewhat covert in what he's trying to do. Like he said no forward guidance. But it's so obvious. Like it's so overt. Like he's going to redefine what inflation is. He'll come out. with like a new CPI adjusted number, it'll give us a lower inflation print, and I'm sure he'll go to cut rates or do like monetary easing in some way. That's what these central banking snakes do. This is what these snakes do. These people manipulate the Fiat money supply. Like this is the case that it's been for over 100 years. Like this should be so obvious to everybody

by now. I know I'm preaching to the choir. We're bitcoinsers, but it's literally the same playbook. Like change the name of this. you know, will change the inflation statistic. It's wild, man. It's literally the, another page out of their playbook. Call it something else and then repress the society monetarily. It's a sad state of affairs. Like, dude, did you know that the United States debt is like on pace to be over $50 trillion by the time Trump leaves office? It's insane. It's just, it's just numbers that like, I can't even understand. Like, I don't know what $50 trillion is. I just know it's absolute insanity. Yeah. It's just crazy.

like, wait, Elon just became a trillionaire. That's $1,000 billion and that 50 times over. It's, it boggles the mind. It's just ridiculous. It's crazy. And it honestly, like, Bitcoin's at $64,000 right now. Like, with all this happening, there is literally, like, I don't understand why more people don't know this is the best place to put your money and, like, move into a Bitcoin world.

Like, it's crazy to me. And the other interesting thing that I think Wash has to battle with is, is he's got rid of forward guidance. And like you say, like markets move on what they say, not even what they do. And so without the forward guidance, do markets just get even more confused as everyone tries to read the leaves and they don't really have anything to go off apart from vibes? Like, everything's vibes. Yeah, I was going to ask you, like, do you feel like that this has been the most uncertain

market in history? Like, versus when you first started investing? To me, I can't imagine being in anything else but Bitcoin. Like literally 100% of my family's future and the success of my bloodline, it is 100% reliant on the success of the Bitcoin network. Because I look at equity multiples and I can't square that in my head on how these things are investable. And what's funny, even before I was totally orange-pilled, my orange-pilling journey has been quite long.

But I have always thought that about equities. and I've always been able to perceive certain valuations being ridiculous. And I continue to see that get more crazy as my life goes on and I get older. And it just, the uncertainty is wild. We have people debating on whether or not MSTR should trade at a 10% premium to their Bitcoin holdings versus DoorDash stock trading at a 70X earnings. It's like, to me, I'm like, guys, like the answer is probably somewhere in the middle here. to me, that's why I love Bitcoin, and I actually do like the treasury companies, because in terms of like a risk-reward calculus, it's so much easier of a tell to me. Like, do I buy Costco

at a 60 PE? Is that overvalued or undervalued? Will Costco exist in 2100 when robots have replaced humanity? There's never been more uncertainty, yet equity multiples are at the highest they've ever been. I believe that the composite price to earnings multiple for the S&P 500 is a 29. Like I don't, I think that's crazy. Crazy. Rather just buy Bitcoin. Just, JBB, just buy Bitcoin, stack sats and call it good. That's absolutely nuts. I didn't realize that across the SEP was 29 times. That's insane. And like people might think that's silly that, because you said before that Bitcoin trades off what the Fed says more than almost anything. Like, so sure, it could have a really negative effect, but we're just playing a different game.

Like, this is much longer term. Like, I'll take the short-term volatility to own Bitcoin for the long term. Like, that's an easy bet for me. I can't possibly imagine having my wealth stored in anything else but Bitcoin. And then, like, with some risk capital buying, like, an equity that's reliance on Bitcoin. Like, I cannot even fathom, honestly. Like, buying the S&P 500, to me, like, I want to, like, I don't want to say vomit, but I get like nauseated about this.

It's just like it feels gross. Like to me it's like this latest stock market crazy rush. It's like the last big boomer hurrah where we've seen real estate and equities just at the mercy of the money printer getting inflated. And we have all of this old boomer capital. I don't say boomer disrespectfully for anybody older listening to this. But like that's what it is. it's people that are unfamiliar with Bitcoin, and then they store their money and these things that are absorbing the money printer, essentially. And it's a really sad state of affairs. And

you know, as well as I do, like, you know, the capital is going to hunt scarcity at the end of the day. So I can't buy anything but Bitcoin. Let's go. Adam, this has been awesome. The takeaway is, you think strategy is going to be fine. Buying Bitcoin is always the way. I'm excited for the next few years, man. I think we're going to have good times are coming back. Yeah, I think so. I think there's a lot of this Bitcoin civil war is super interesting. People throw and shade at each other.

There's multiple civil wars. There are, yeah, the core and knots thing, that's for sure. We didn't even talk about that. So maybe another episode or something. Yeah, like crazy stuff, man. It was a great talking to you. I'm bullish on Bitcoin. Sounds like you are too.

And at the end of the day, that's how we win. Adam, where do people go to? find more of your work. Yeah, I do a daily YouTube show at Adam Livingston, BTC, and then I have an ex-account where I post analysis on Bitcoin and a lot of MSTR stuff as well at Adam B. Live. So those are my two platforms. Let's go. All right, thank you so much, Adam. We'll have to do this again. That was awesome. Thanks, Danny. I appreciate your time, ma'am. Have a good one.