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[SMART MONEY] - Bitcoin As A Business Model: Why Wall St. Is Watching Saylor's Strategy
Recorded: May 29, 2025 Duration: 0:56:09Space Recording
Short Summary
The conversation delves into the growing trend of Bitcoin adoption among corporations, with notable mentions of companies like GameStop and MetaPlanet exploring Bitcoin treasury strategies. Additionally, the impact of recent accounting standards on public companies' ability to hold crypto assets is highlighted, signaling a shift in how businesses integrate cryptocurrency into their financial frameworks.
Full Transcription
Thank you. you Thank you. water
why would you Thank you. Say it's all about you Say it's all about you Once you get your feeling
Once you have the law
Says it's got a dream
You won't get a call
One step back to leaving
Now it's moving on
Why won't you believe in it
Tell me it's gone
Once you get your feeling
Once you have the law Now it's a theory I'm going to go. He gave to me all I know I will stay here
I will not go
You gave to me
All I know
I will stay here.
I will not go. Oh, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, let us know, wrong, now it gets to be, feet ain't on the floor.
Once that's like you leave us out, jump we got the wrong, why won't you leave the telephone?
GM, GM, everybody.
Welcome back to another banger show with Bracket.
Bracket's platform infrastructure provides key services to securely scale both on and off chain yield vaults. Today we're here talking about Bitcoin as a business model and
why Wall Street is watching Sailor's strategy right now and why we're seeing so many people
copy that strategy. Also, we've got some banger guest speakers to dive into this conversation with. We've got Omniti Network, the BTC Phi Hub with BTC, ETH, Sol, AppChains, L2s, and more. We've got Garden Finance with us
today, Trustless, Peer-to-Peer, Bitcoin Bridge. We've got Dude over here from Garden Finance
coming out of my shell, Fertilizer at Garden Finance. And we've got a couple other guest
speakers who are going to hop up on stage any minute
now.
X is just being a little buggy today, people.
I believe, who do we have behind the mic today?
Is it Jay?
What is up, Jack?
What is up, Jay?
How is it going, homie?
Are you excited for the show today?
One of my favorite topics.
I love the second coming of Bitcoin Jesus, the material
conviction he brings to the room. But I think also, this is a really great topic because
any motherfuckers that think they're going to print the BTCL2 story like the alt story of 2021,
I think have a rude awakening coming their way.
So I'm excited to get into it with this guest panel and kind of dig up the next chapter of the eco, given the fact that apparently you're still a doodle, which I guess is OK.
Still Bitcoin combo, doodle PFP.
You know, we're trying.
We're trying.
We'll get you there.
We'll get you there.
We'll get you back.
We'll get you back.
Honestly, it's going to be even more confusing because I think I'll probably change it to an abstract PFP next and then.
That's when you need to get a psychiatrist.
You just need help.
Oh, I have one.
I have one on speed dial.
Do not worry, Jay.
As soon as I entered this space, it was the first thing I did with – I was going to say profits, but let's be honest.
There have been none of them.
Anyway, guys, I want to get the mic back over to Jay.
Jay, tell me, Bitcoin Jesus, who are you referring to?
Do you want to give us a little foundation for the story that we're going to have today?
Oh, yeah.
Well, I mean, so if anybody was at, so I guess just to sort of rewind, right?
So I'm an ex-Wall Street guy, right?
You know, so that's the roots of my tree in the first sort of 10 years of my career, right?
And anybody that's ever seen the dawn of an asset class that takes, let's call it, you know, global attention into consideration knows these stories,
right? You know, venture capital in the late 90s and early 2000s went through, you know, a very
sort of, you know, similar circumstance. And when we're talking about the allocations of real,
you know, institutional assets, you know, there are the soothsayers of those asset classes that obviously position sort of large scale, you know,
attention. And if you were at DAS, you know, the Digital Asset Summit at NYC last month,
which was a great conference, by the way, you know, highly suggest going to as many institutional
based conferences as you possibly can in this space, you'll see the incredible difference there is right between the sort of like the retail hype and the real blockchain rails that are sliding
under global financial markets. But Saylor was there, right? He was at DAS, right? And he gave
his presentation in the flesh. And it was the first time I ever saw him in the flesh. And it was a 21,
you know, it was a 21 page slide deck, you know, positioning the truths of BTC. And when he was done, he'd be like, man, I don't care if I'm an Eskimo that needs, you know, I'm buying ice from
this guy. Like, you know what I mean? Like, I mean, he was, he was, he's an amazing salesman,
you know? And, you know, he's, he, I literally, I still have the notes are actually right next to me in the notebook.
Sailor equals conviction, literally like, you know, on on my book.
Right. You know, you know, and that that presentation, I think, really sort of sets the stage for the types of headlines that you're literally seeing in pretty much every single newsletter you get every single day.
I mean, I don't know
how many crypto newsletters you guys get, right? You know, but if, you know, no matter how many
there are, right, there are at least sort of three to five to seven plus Bitcoin bullish,
you know, adoption, you know, headlines in them every day. You know, today it's the 401k,
you know, advances, you know, towards crypto.
El Salvador saying, OK, IMF, whatever you say, bud, I'm going to keep on stacking sats whether you like it or not.
Right. Like, I mean, this is like a this is a daily vibe. Right.
You know, so while all of this, you know, this ground floor attention is obviously swelling.
Right. And the asset class is, you know, validated, credible as a store of, you know, valuable,
the store of value, right?
Immutable, deflationary.
Obviously, there are now, right, you know, business models that are poking up, right?
You know, so sailor being the loudest drum in the room in regards to the utilization of debt and leverage
in order to establish a Bitcoin treasury.
You can see there are quite a few companies that are following suit.
So you've seen MetaPlanet.
I think GameStop announced yesterday.
I think you've had World Liberty Financial.
I think you had a spinoff of Cantor, I think, is getting involved. And also you had this theme popping up on other chains now. What's the other thing you saw in your headlines yesterday or the day before? Lubin, you know, one of the soothsayers of ETH, right? Thinking that he can take this strategy, copy pasta, bring it over to that asset class, right?
And kind of like, you know, run the same game plan.
So there's a lot in the soup, you know,
as far as what's that intention?
What does that actually mean for the asset class?
What can we expect?
You know, that's sort of why we're here today.
Just kind of unpack all that fun stuff.
Dude, what a breakdown. Absolutely love that take. And yeah, I'm so bullish on Sailor. Did
you ever catch his breakdown of the iPhone back when everyone was footing this idea that mobile
phones were ever going to be like a billion dollar market? I did not actually, no. It was good.
Yeah, yeah. So this is like iPhone 3 3gs do you remember the iphone 3ds the
little circular one it was like one of the very very first iphones and unfortunately i'm old
enough to remember yes i had one dude so i'm right there with you but he is literally breaking down
the iphone market 10 years before it really, really happens. It's goosebumps. And there is
a five minute video of him saying why he's investing so heavily in Apple,
why it's going to be so impactful and literally telling the story of what Apple did. And this is
like, you just have to be bullish on this guy when literally everyone else is telling him,
look, the mobile phone market is only this big. So how is this one product going to be bigger than the
whole mobile phone market? Because it wasn't a mobile phone, people. And he just saw it. He saw
it through the trees like nobody else did. And he even said that live on YouTube, when YouTube was
very, very early days coming out, I'll try and find the
video. I've definitely got it saved somewhere. But before we go any further in terms of the
sailor strategy, what it is, why he's doing it and why this guy is just so freaking engaging
and why people are copying the strategy now, you just referenced Bitcoin Vegas. So you guys at
Bracket were there. Can you give us a little TLDR just before we go any further on like big takeaways, anything you're super bullish on, anything outside of Sailor in terms of his freaking crazy pitch?
The Sailor presentation was the Digital Assets Summit at NYC last month.
Oh, okay.
Our CEO and COO are out in Vegas right now.
Of course.
Yeah, it's right now.
Yeah.
Yeah, it's this week.
So next week, we'll talk recap on
the vegas stuff um you know so we can skip that for now um and and definitely come come back to
that next week because there's going to be a lot of shit coming out of there yeah yeah that's super
cool i can't wait i forgot i i don't know why i thought it was last week maybe this is why i don't
have a bitcoin pfp anymore people. But anyway, that being said,
we'd love to hear some thoughts from our other speakers on this one.
And especially what exactly is Saylor's Bitcoin strategy
and why it does just seem to be doing waves at the moment.
If anyone hasn't seen MicroStrategy
and the fact that it is just climbing the charts when it comes to one of the
most valuable businesses on earth currently then you know maybe just check check those charts out
but we'd love to hear any thoughts from the rest of our speakers in reference to any takeaways on
this idea of bitcoin as a business model um who do we want to get first i haven't actually said
what I usually
say, which is get the hands in the air speakers. So if you've not been on a show with me, Bracket,
or Jay before, that's probably a big important point is if you do want to come in at any time
during the show, throw the hands up in the air, we'll get the mic straight over to you. And on top
of that, we do also do this jack point thing, which basically the most worthless point system
in the entire crypto space, maybe even the world. but you do get 10 jack points every time you raise
your hand in the air and at the end of the show we'll put all those points together and we'll see
who comes out on top they won't win anything but you know you could come out on top so there is that
and completely worthless as i said but yeah omnity you've been giving me the laugh emojis and
and all the emojis. So I'm
going to get the mic over to you, even though it wasn't technically a hand raise. What's your big
thoughts of the title of today's show and this idea of Bitcoin as a business model?
I see how you're doing, Jack. You're trying to throw me the mic but not give me the jack points.
Okay. All right. It's fine. But there's a concerning level, I think, of, you know, kind of dong piling into the one strategy.
So I think it's productive to have this, you know, one figure who gets the market and buys Bitcoin at a large level on a regular basis.
And white people are bullish about that and excited about that.
It's because Saylor is on this sort of insatiable,
inevitable, infinite Bitcoin mission. So I think some people in Bitcoin development would say that
Saylor is the final boss, that because he's accumulated so much Bitcoin, he has a sort of
outsized liability and outsized motivation to affect the development and future of Bitcoin.
outsized liability and outsized motivation to affect the development and future of Bitcoin.
But so far, that's also been really positive. So I think the Bitcoin Jesus approach is the
right way to see it. And that means that we have value and appreciation for profits, but
we also know that profits come before profits in this market. There's no hard feelings around here,
but also that means that it's not personal when someone dumps on you.
I don't believe in that.
I think that that's what the system is sort of showing us, that there is an impersonal part of this relationship with Saylor.
But on a strategic side, you know, he's accumulating a very, very high volume of Bitcoin, which effectively means that he's, you know, buying some of the weight in the vote.
If in the future we have a core debate where strategy wants an update that's capital S,
micro strategy, if they want some core updates, then there's a very good chance that they'll
be able to get them because they control so much Bitcoin.
So I think there's a double-edged sword to this.
And that's really what it is, is that we've got a great advocate in Michael Saylor and people are paying attention to him. And he's a professional
C-level who's been doing this for years and years, understands what it's like to be a publicly
traded company. That's really powerful for the future of Bitcoin treasuries. At the same time,
it has that counterweight of being incredibly being incredibly incredibly important in the industry yeah fantastic taking yeah the double-sided nature of all of this and this idea of any
one entity or business with their own goals being able to you know have enough of that bitcoin to
actually push some of those agendas forward really concerning because i still remember i
think it was blackrock i could i could have the specifics wrong but i i remember this whole
oh bitcoin and it's 21 million bitcoin doesn't always have to be that there is ways to change
that i remember that statement and being like what the fuck like what like literally it's the whole proposition what are you talking about
um and obviously you know this was a vc who was literally like yeah we you know if it will get us
more money we'll print more of it which is kind of crazy crazy take but again this comes with like
the depend honestly it comes with also getting retail to think one thing you know you've got bitcoin maxis
of all shapes and sizes um and that's a big problem because it means they just aren't at
consensus so when these big changes do come about it's not like it's us versus them it's
a hundred different us's versus one of them where they can come to consensus way earlier
and way easier so yeah really really great take for the conversation.
Dude, I want to get the mic over to you here.
What's your thoughts on this initial take of the conversation, Bitcoin as a business model?
Yeah, I come from a very different thought process generally.
So when this question was posed, I spent a bunch of time just thinking about it.
And you know what Michael Saylor really did for Bitcoin.
I was thinking, like, you know, is it really, like, replicable?
Is what Michael Saylor did, is that possible for someone else to be able to do at this stage?
at this stage and I think it's very difficult because the amount of capital that he needed
And I think it's very difficult.
to have to be able to amass the amount of Bitcoin he did during over the years and also
be able to grow to a position where in a way he's almost shaping the narrative of what
Trad5 thinks about Bitcoin and since it is so difficult to do it for
someone else again I really don't think like using what he did as a business
model where you know it's micro strategies more like you know one asset
hedge fund almost but like he took bet on the fact that you know Bitcoin will
go long you know in the early stages.
Now that we are here in a slightly mature market, I really don't think that as a business model will work anymore.
But like the guy from Omniti said, Wall Street and everyone is watching because I think it makes sense.
He almost has... You know how there are so many owners
for a project.
It's hard to really make uptent.
But since
Saylor has put himself in a position
where he can
kind of have a
flywheel effect on Bitcoin,
positive or negative, I think that's why you know wall street
would be looking at what strategy would be over the long term um it's not to replicate it i think
it's more for signals on you know what it would mean for bitcoin yeah honestly love that taken and love the conversation we're already diving into here
so much context from our builders up on stage and look fantastic fantastic start to the show
and listeners if you are tuned in if you're enjoying this one very easy way to support
this type of content that's a like and a retweet so if you do want to show support for the content
today likes retweets comments all the good stuff to make sure we get to as many members of the audience as possible.
Jay, phone the mic back over to you here.
Is Bitcoin acting more like a treasury asset at this point or has it become like MicroStrategy's core product in your opinion?
That's a good question so um so strategies core brand identity i would say
is definitely associated to bitcoin as a digital asset um but as a company uh you know there's
revenue on their you know uh on their filings, obviously, that are associated to their, you know, their consulting business. Now, this is all sort of like, let's call it a ticking clock of sorts, right? You know, so if I issue debt, essentially borrow money and have terms associated to that debt that has to be repaid,
you know, based on those terms, you know, and I'm using said dollars to go buy an asset, right?
I'm everybody's friend when that asset is going up, right? When that asset is not going up,
right? It's very different, right? It's a very different story, right? You know, which is very akin to 2008,
right? The 2008 financial crisis, right? It was really a lot about collateralized sort of mortgage
debt obligations, right? That were bought and sold and packaged into so many different types
of financial products globally, right? In the billions and billions of
risk and held by sovereign, you know, by countries, by sovereign wealth funds, by corporates and so on and so forth. The reason that became a contagion obviously was because
of home prices deciding to go the other way, right? And people could no longer pay their mortgage,
which led to default. So one of the most important pieces
of this particular puzzle is really related to the clock and those debt covenants and associating,
like how long do I got to start paying those bills? And because in his particular case,
he still retains board control, I believe, right? The forced liquidation possibilities for
him for now, for now, right? You know, or rather small, right? You know, so he's got a little bit
of time. Now, I think once you start to get into like Q4 of this year, especially the stretch
until like, you know, through 2026 to 2027, right? That's kind of like where the rubber
will ultimately, you know, meet the road. And I, like, when you think about like the copy pastas,
right, that you're going to see here, right? Like I said, every, like, if everybody does it,
right, what essentially happens, essentially happens right well you can definitely
sort of expect supply shock right on the underlying asset right that's one right like so there's only
so much of the asset to go around you know and if every single headline and every one of your emails
you're reading every day is about some other large entity you know that wants to buy billions in Bitcoin, right? Well, you know, that's a
deflationary asset, you know, and they're, you know, dependent on who wants to sell it,
why and when, right? That obviously can have a significant price impact, right? So
those significant price impacts, I don't even think are here yet, right? I think this is still
a speculative asset, right? That people are just
kind of getting in front of, you know, because they're early believers. Now, on the other tail
end of that is that, you know, if in fact, you know, I mean, look at, actually GameStop would
actually be, you know, probably a really good example, right? You know, if I'm bringing, I don't
know what they brought on, like 2,000 or 3,000, you know, Bitcoin onto the balance
sheet, I think it was, I can't remember is the exact number, but something around there.
Are they in the business of selling games anymore? I mean, one would say, are you really in the
business of selling games, you know, once, you know, Wall Street Vets got a hold of that thing,
right? And sort of, you thing and positioned it as a speculative asset
that had nothing to do
with the actual fundamentals of the company.
So there is a high mixture
of speculative retail and institutional fundamental
that goes along with this.
But if it gets so loud in the room,
people can't ignore right, you know,
sort of ignore, you know, that allocation for long, right, you know, if in fact it's being adopted,
you know, as such. So I think, you know, I think we're really the, you know, maybe not like sort
of like the sort of stage zero, right, you know, but we're definitely entering sort of like stage
one. And I don't even think we've hit that point of inflection yet
in regards to what supply shock is actually going to look like.
Because I think it's going to be pretty dramatic.
Yeah, Jay, absolutely banger take there.
And love, again, just trying to dive into the psyche of all of this
and what it actually means.
For Sailor, for the business overall, to dive into the psyche of all of this and like what it actually means and for for sailor for
the business overall like it's look look just for context here people and something that i want to
sort of dive into alongside the same sort of trail of conversation we're having right now
micro strategies outperformed bitcoin over the five years like Can we just take a moment to realize how freaking crazy that is?
A company that's sole objective is to buy the underlying asset, which is Bitcoin, is outperforming
that own asset is absolutely mind boggling to me. And I'd love any speaker takes on why you guys think it is. The specific returns I'm talking about is 2,478% over five
years. For context, Bitcoin's at 1,400 projected by 2032. So kind of freaking crazy statistics
to be able to pull out here. Why? Why is a business buying bitcoin outperforming bitcoin in your guys opinions
omnity do you want to take a crack at this you got any like logic behind why this might be
i mean i'm losing on the jack points again because i could be putting a hand up for this
but i think that straightforwardly you know there's a, you know, there's a reason why the strategy is not going to be repeated.
It's because the idea of, you know, the Bitcoin value going up, but also Saylor being the C-level person who's sort of mature enough to manage that portfolio.
I feel like it's kind of a 2D look at a 3D game.
You know, like it's a little bit difficult
to sort of pre-guess that this is going to go well.
And, you know, that because Saylor's been so charismatic
and has been right about a bunch of things
that clearly he can handle a volatile market.
I mean, there's reasonable assumptions there,
but at the same time, I don't like the idea of stitching any assumption
to any other assumption
as part of an investment strategy.
That's always been suspicious to me.
Now, by the numbers, without assumptions,
MicroStrategy has been relatively successful
in their work,
but also they weren't on this crazy,
like, you know, debt plus buying frenzy.
There's only, I think think so long that this sort of
like creating debt in order to buy bitcoin can be productive because there is some you know sort of
sleight of hand acknowledgement here that the debt is not the priority the the acquisition of bitcoin
is a priority and the management of that bitcoin is is worth the trouble to incur payments on debt at a high scale.
So I think that if you see the strategy the way that capital S strategy is kind of pushing
it forward, a lot of it has to do with Bitcoin Jesus.
A discussion that's been lingering around, which is eventually there will be a man.
They need to make Bitcoin more valuable by either spending it,
by funding Bitcoin development, which they already do in some small portion,
or by supporting other businesses with Bitcoin-based technologies.
And at the end of the day, I do feel that that kind of weighs out the risks that come with Michael Saylor,
is that having a big bag of Bitcoin in such an important publicly traded company, it means that someone's got to move that ball forward.
That there's a billion dollar liability that's now entrusted to this one company to keep Bitcoin moving, you know, to not get us stuck on things like OpReturn being unlocked or to not get us stuck on conditional upgrades for soft
forks. There's a lot of things that we're debating about Bitcoin right now that are difficult, but
at the same time, Saylor has not stepped in to weigh down on any of them. In the meanwhile,
we're kind of waiting for that moment where he's going to double down in a different kind of way,
which is more public education, more public tooling, and he is doing some so i don't mean to speak
negatively on that but i think the more time he's got with the bag the more the motivation is to
you know make the bag's reason for growing grow instead of trying to capitulate and just buy
bitcoin all the time it's too expensive to do it every day, right?
Well, yeah, tell me about it, brother.
My goodness, like trying to stack those sats has definitely become more and more of a pain
on my balance sheet, that's for sure.
I guess, look, we've hinted at this
with the GameStop reference.
We've hinted at it in terms of like
how other businesses can do it.
Dude, do you want to come in on this one
and talk about a little bit about what Gordon are doing in terms of like how other businesses can do it. Dude, do you want to come in on this one and talk about a little bit about what Gordon are doing in terms of this? You know, you're building
on Bitcoin. It definitely is a business model that, you know, it utilizes or depends on Bitcoin
also being successful. How realistic do you feel it is for other companies to follow
sailors lead? Or do you feel like the tides are
shifting towards actually building on Bitcoin itself? I don't think it's like exclusive in the
sense that it's one or the other because I think one kind of helps the other. Projects kind of fall in suit behind what Sailor is doing at MicroStrategy.
I'm not sure how it makes sense for anyone to think of it as a business model, but as an investment strategy, I think it is fine.
A lot of hedge funds, a lot of projects, a lot of companies do hedge their risks by investing in certain types of asset and if Bitcoin is that I think
that's great that's great for DeFi as well because you know with that funds that people have see like
okay this is this is an interesting thing this is what I believe right for any cryptocurrency at
this stage there's only two things that you know DeFi can do for it it is either you make money or you
move to the place where you make money right so I think Bitcoin is that one
asset where there is ample amount of opportunities to get more yield on defy
and what BTC5 is doing you know with all these L2s any other kind of projects is
to try and create more opportunities where people can make a little bit more money on bitcoin it's also good because it
hedges against any kind of price movements that happens on bitcoin at the end of the day and
gardens yeah gardens happy you know whatever happens at the end of the day right because
if more people are interested in you know holding bitcoin for uh as part of their capital investment strategy
or you know they want to come on chain and gain some more money on top of bitcoin i think garden
has a bridge our whole purpose from the beginning has been to create an experience that is as easy
as centralized exchanges or otc uh you know trading desks where small guys are able to do trades on Bitcoin very quickly
where you can move from Bitcoin to any asset in as little as 30 seconds with not a lot of slippage
and also same for the whales. For example, on Garden, right now you can move a million dollars
of Bitcoin in one trade to let's say Ethereum based or any other chain in as
a little as 30 seconds.
And that is the kind of DeFi rails or payment rails that we want to build to enable folks
like any institution trying to get Bitcoin quickly.
I think once that kind of infra, kind of games are ready, that's I think there is more possibility for the people to actually hold more Bitcoin so it's like
I said from the beginning right it's a it's not like mutually exclusive it's I
think one is dependent on the other so as more people hold Bitcoin there is like
scope for more people to build projects like yield projects or no payment rails
like garden and you know with that coming that like kind of
motivates more people to hold bitcoin because now they can easily move you know in and out of bitcoin
and also earn some yield while they're at it yeah dude that that is such a good take and also really
respect the name dude for that as well because it makes the takes very easy um but a hundred percent like when you think
about any product that is going to bolster the value proposition of the underlying asset and
then purchasing the underlying asset and holding it and therefore solidifying it from that stamp
standpoint yeah those two things are super cyclical like they're both going to
lead to the end result being a more valued
Bitcoin. So yeah, that's a really, really balanced, really, really solid take. Loving,
loving the conversation so far, guys. Jay, what's your take on, you know, you've said it yourself,
you're a big Wall Street guy. Do you feel like Wall Street are taking this serious now? Like,
obviously, MicroStrategy's value should probably speak to that.
But why is it?
Why are other firms and even Wall Street starting to pay serious attention to this?
Yeah, well, I think there's a couple of reasons, right?
One of the fundamental reasons that hasn't been mentioned yet was the update in FASB accounting standards that hit in December 2024, right, which allowed crypto assets on a balance sheet, you know, to be marked to market to fair value, right?
uh it wasn't a very attractive asset to hold on a public company's you know balance sheet so quite a
bit of a of sailor's voice went into influencing that right because obviously as he was amassing
that digital asset right you know he did not want the public stock performance to you know to suffer
without proper sort of accounting procedures that you know accurately you know or sort of reflected
exactly what the what the company was holding.
So that was just in December.
That was just five months ago.
So December 24 sort of like said, oh, okay, here are the rules in regards to the accounting
standards on how it will actually reflect in your P you know, in your P&L.
So cool.
Okay, that sort of like, you know, allows the level playing field.
So that's a ground floor thing, right?
The next ground floor thing is that, well, if I can mark the market fair value
of that digital asset I'm holding as a public company, right,
and that now can be sort of reflected in some relationship
to a fundamental stock price as well as obviously the speculation that goes along with that.
You know, do I want to buy this asset? Yes or no. Right.
Well, I mean, first off, you know, do you actually have, you know, you know, are you cash flow positive in regards to the, you know, the internal sort of corporate treasury management in order to actually purchase the assets? The answer is yes. Then obviously you're exploring whether or not you want to
execute that. I think when we talk about this as a quote unquote business model,
I think that's when you're going to start seeing a lot of really, let's call it creative business engagements, right? As far as how companies operate, right?
You know, can exist as public companies right now
that the accounting standard states this fair value, right?
So, okay, cool.
So I can be a public company, I can hold this asset,
that asset is going to have a performance level
and that performance level is gonna be directly related You know, to my stock price, right. You know,
as a, as a, as a listed public company that issues equity, right. You know, and or debt,
right. Uh, as far as, um, you know, uh, our relationship, right. You know, the price
earnings and blah, blah, blah. Okay, cool. Well, like, like now, now this is kind of like,
it's the same way you would talk to like a, like a, like a French culinary, you know, chef about ingredients in a
kitchen, right? Be like, well, what do you got? Well, I got, you know, I've got, you know, chocolate,
I've got flour, I've got, you know, I've got sprinkles. Well, great. Let's make a fucking
cake, right? This is sort of like the same thing that you're, you're, you're sort of like witnessing,
you're witnessing, right? The ingredients, you know, coming together. And the people that are committing to this, right, just like,
you know, Ruben on the East side, just like Sailor has been for some time, right,
they now are getting really confident, right, you know, in their ingredients, you know, to
bake this cake, you know, which obviously starts leaking around to other chefs. Oh shit. Uh, that guy
just made a really nice cake, man. I'd like to make a cake like that, you know? So now all these
other chefs are popping up and like, I'm a fucking great chef too. I'm going to make a, I'm going to
make a kick ass cake too. Right. So, uh, they're, they're gathering the same ingredients, right?
You know, what are the raw materials that you need to bake that cake? Well, I need cash, right?
So you're either going to issue debt, right, or equity to go get that.
You know, you have to raise capital in order to deploy capital, right?
If you do not have the capital necessary in order to secure the asset today.
So these are the things, right?
You know, this is the guy in the kitchen that's going through the cupboard,
looking for all of the things in order to position this cake. Now, I think everybody can generally say that there are like it's kind of, you know, I mean, you're we're in crypto, right? So like copycat trading, for example, even on the molecular retail level is obviously I say all the time, actually, in crypto is like nobody in
crypto does anything unless somebody else does it, right? Like, it's like literally the number
one reason on why somebody does something in crypto. He did it, right? And I listen to that
guy. So if that guy's doing it, you know, I'm doing it. This is, you're going to run into a
very similar scenario, right? Because if there's an explicit benefit attached, right, to a public
company, you know, stockpiling an asset, right, you know, on its way up, you know, as sort of, you know, the general consensus of supply shock is imminent, I bet I better get my fucking ingredients together really quick, you know, you know, if I want to bake that cake, you know.
I think that's the vibe, right? The vibe is, you know, that all of the people, right, that are starting to commit to gathering those ingredients, right, going into the kitchen to bake that cake, right? And hopefully, right, you know, get their cake out of the oven before it blows up, you know, which is definitely a whole different type of conversation.
And, you know, and I think we do run into, you know, a lot of the points that were made prior. You do start sort of like running into some very interesting scenarios that, you know, start creeping up against, you know, the entire reason of Bitcoin's invention, you know, as a response of 2008, right, which was 100% about, you know, centralized counterparty risk. Well, if I got a lot of,
if I, if, if a couple of chefs, right, you know, have the biggest cakes, you know, and those guys,
you know, are essentially, you know, have the power to wield control over that asset,
what does that mean? You know, so I don don't we're not at that moment yet right but you
can almost sort of guarantee the fact that that that moment will arise in some way you know shape
or form god damn jay what a take like someone soundbite that god damn the the were you expecting
this that was like you know that that was ingredients for how to provide a good take.
If I was going to reference like a chef and put those ingredients together,
a great analogy is one of those ingredients.
And that's exactly what's just a banger take, dude.
Wow.
Omniti is fully made up on the spot, by the way.
Just, you know, but it made sense, right?
I mean, it's on the money, right the way, just, just, you know, but it made sense. Right. I mean, it's, it's, it's on the money, right. It just, I think it's funny that if you, if you continue with that,
all the emails in your inbox are literally chefs are like literally gathering ingredients, right?
I mean, that's literally all the headlines that you're seeing every day, the countries,
the sovereign wealth funds, the CEOs, right. They're all just trying to bake some cakes.
both funds, the CEOs, right?
They're all just trying to bake some cakes.
Dude, that needs to be like a new catchphrase
for you on the show.
Like every single show,
or maybe we just need like a short
where you explain this
and we get some like animations around it
so we can get some viral posts going
as that really is.
That's a special take, dude.
Omniti, your hand was raised.
You're in Jay's absolute banger there.
Throwing the mic over to you next.
Jay gave a really good point that reminded me of something.
The majority of people who are discussing this kind of like Bitcoin treasury or Bitcoin
strategy, they are talking about issuing debt or in some way raising capital to do this.
Um, I think it's worth noting that there are some cash heavy companies that might be in
the opposite um
sitting it just occurred to me like apple is one of the most cash heavy uh companies that exist
it's one of the most valuable companies in the world and they have a very large amount of cash
on the side um it you know it it doesn't have to be explained very much to this audience that if
you hold your dollars for two years versus holding your Bitcoin for two years, you're always losing money.
Right. So I wonder if there's a counterpoint to the strategy as it sits now, because as it sits now, it's worth the trouble to raise new capital.
But if you have a cash heavy treasury, then you know that you're losing to inflation every year in a significant fashion.
treasury then you know that you're losing to inflation every year in a significant fashion
and most companies that have a cash every treasury they're kind of you know stockpiling dollars for
darker days so it begs the question you know is it worth it to keep those dollars parked for
darker days or is it more worthwhile to you know hedge against that with some bitcoin or
you know to consider a larger strategy where you move back
and forth between Bitcoin every quarter so you can rebalance your treasury and, you know, mitigate
losses from inflation. So I feel like that's part of the conversation too, but we've been mostly
seeing the approach that is, you know, about the treasury being new and fresh and that usually
means new capital. Existing capital is also something that needs a place to go,
that needs a place to function and not be diluted as harshly as it's been. I don't know about you
guys, but the idea that Apple would give 4.5% out of their financial products and then not want 4.5%
or more for themselves, that's not how capitalism works, guys. Big capital earns more capital.
themselves but that's not how capitalism works guys big capital earns more capital
so i think there's an obvious strategy there yeah that's that's a fantastic take and my mind's a
little bit melded by that i think you know i think a lot of people consider this quite deeply when
you look at really the us dollar and its weakness and where that really came from, you could go all the way
back to Nixon. I think that's what a lot of people sort of feel when they do see Bitcoin and they bet
on Bitcoin is, you know, Nixon came in and he basically made this decision that the US dollar
was no longer going to be pegged by gold, which meant that countries couldn't reclaim gold for
the dollar, which to my understanding,
I could be getting this wrong, but that's at least my understanding. What I have heard through the
grapevine is basically pre-Nixon, if any country in the world wanted to hold US dollars as like a
secondary currency to protect itself from inflation or from its own currency and the volatility of it.
If at any point the governments over in the US started doing weird shit with that dollar
and making it less valuable, i.e. printing a fuckton of it with no real reason or cause
and making the overall supply so big that it gets devalued, they could say, you know what?
No, I don't like the moves you're
making. Take that dollar back. You owe me gold now. And they would have to give you the equivalent
gold. And for a long time, that seemed to be quite effective. Then Nixon came in, removed that. And
if you look at inflation and you look at what's happening today, I think it's not to say it's by any means the only cause,
but you can't say that if that wasn't the case
and people really didn't like the way the US were ducking and diving right now,
the US maybe would have thought a bit differently
if they would have had to give gold in replacement for those dollars
that are now being held by all of these countries.
And the reason I use this as an example for Bitcoin right now
and this conversation we're having about why would Apple
not actually go towards Bitcoin instead of keep holding dollars
and losing 4.5% or however many percent a year.
Yeah, because that's essentially what the government now
seem to be referencing is like, well, maybe we need to do that.
So I would go one step further.
Not only would actual companies start doing this, but the next step, if that does start to happen,
if big, big companies like Apple start saying, you know what, I trust Bitcoin over the dollar,
maybe we get to a point where the dollar then has to be backed by something again.
And maybe it's not gold this time maybe it's bitcoin i think that's like the most maximalist take that you can
have but genuinely that's where my mind goes in a long enough time horizon like someone's gonna do
it and when they do um i do think there's gonna be a lot of governments that are gonna have to
follow suit in order just to maintain their standing within the global economic well that we currently are in but jay you came off mute there i'll throw the mic over to you but
yeah just something that has been eating away at me for years now since i've been in bitcoin
yeah i mean you're you're 100 right the year was 1971 right uh and it was the end of uh
it was the end of breton woods right uh which is essentially uh if there used
to be a website I wish I could I wish I remembered this one website literally was literally nothing
but all charts are pretty much like the entire global financial you know you know macro ecosystem
all showing you know what 1971 essentially did, right?
You know, and it's been around for a long time.
It's like this infamous website, right?
And it's literally, it's nothing but like a list of charts, right?
And every single one of those charts goes back, right,
to this solitary moment in 1971 where everything changed
changed because the dynamics of, what do you call it, the association of a dollar to a free-floating
because the dynamics of, what do you call it, you know,
exchange rate versus dollar backed and what the evolution of monetary systems really look like
from then on. So you're 100% accurate. But I think that's kind of like, I mean, look, by the way,
now that we want to get cute with it, right?
Look, look, let's, let's go back right to the chef, right?
That wants the ingredients.
What, what does that chef want, by the way?
Does he want to pay the most he possibly can for his chocolate sprinkles to make his cake?
Does he?
He fuck, fuck.
No, he doesn't, right?
He's not looking to like walk into like, you know, Whole Foods and buy designer chocolate
sprinkles, right?
At a 10x cost, right?
What does he want?
He's like, I want, I need fucking, I need a lot of chocolate sprinkles and I eat it as cheap as possible.
Well, those sprinkles, by the way, need to get impacted by what, guys, right?
They need to get impacted by interest rates, right?
Because I got to sell some fucking debt, right?
And that rate's got to come down, right?
And the cost of capital, right, has to come in my favor because if it doesn't, right? And that rate's got to come down, right? And the cost of capital,
right, has to come in my favor, because if it doesn't, right, then my cake is going to be too
expensive for me to make, right? Is that not what we're doing, right? So here's this pressure,
right, you know, on the Fed, right? And in general, like the global macroeco to say, hey,
I got a lot of bills to pay. I need more capital, right? I need the
cost of capital to come down. Right. And I need to play, I need to play this game, you know? So,
um, it's exactly the moment we're in and why over time, you know, the, the corner that, you know,
the sort of inflationary sort of fiat, you know, paints you into, you know, gets sort of
infinitesimally smaller every single time. And there's nothing you
can do about that. It's like you can continuously print your way out of that, which by the way,
don't be fooled. Don't be fooled by the guy that says, hey, by the way, I want to build a BTC
treasury, but by the way, I don't want interest rates to come down and you to print more money.
You know, like he goes, he wants, they want the money.
Believe me, you know, they want the capital, right?
And they want the cost of that capital to be as cheap as possible, you know.
You know, so that is, you know, it is an interesting point of tension that arises, right?
But, you know, anybody that goes back, you know, know to 2008 um again it is literally the entire
inspiration for why you know blockchain is an immutable store of value exists it was literally
this how to decentralize risk right you know through participants via nodes right you know
rather than saying hey large entity over there you need to house all this risk, because like we've seen, we've seen this before.
Right. It is impossible for any of these entities to house all of that risk. Right.
And what happens if they do? It blows up. And who pays? You do. Right.
between retail's association to crypto, right?
And sort of institutional's association to crypto
that might not have the same concerns you do
when something blows up, right?
Because you're the one that's paying the tax dollars
that is gonna foot that bill,
just like you did in 2008 and 2009.
So that's the vibe.
What a fricking show. Like guys, absolutely loved the takes today and jay absolutely crushed it
on the bracket account as always and look for our listeners if you haven't already
likes retweets people should listen back to this one but also give the main account to follow on
stage if you've enjoyed their takes today and definitely follow bracket for these weeklies
because look they're just a great way
to just summarize Alpha in a single hour
and also fairly freaking entertaining.
Who else would refer Bitcoin
to baking a fucking chocolate cake?
Tell me, show me.
Nowhere else will you get it that way.
So, look, that's all I'm going to say on that one.
Jay, I'll get the mic back over to you here.
Any updates, any milestones,
anything you'd like to share on behalf of Bracket before we do close out the show? No, it's all good. on that one. Jay, I'll get the mic back over to you here. Any updates, any milestones, anything
you'd like to share on behalf of Bracket before we do close out the show? It's all good. And thank
you. It's always a fun hang. So first and foremost, thank you, of course, for always holding it down.
And also thanks for our guests. You guys are always welcome at any time, right? So anytime that you feel, you know, what we're building out there is aligned, you know, to
your vision and ultimately, you know, what you're trying to achieve, right?
It's all about opening up resources in any way, shape or form that allows everybody to,
you know, to move forward, right?
So, you know, appreciate you.
Thanks.
Thanks for being a part.
A big picture for us, right? You know,
yesterday, this week, right, we announced, you know, the expansion, you know, of our vault
infrastructure, you know, moving, you know, into stables, you know, the ETH plus vault for us was
really the ground floor sort of like, you know, POC, you know, sort of setting the floorboards
in regards to how vaults can scale. Now we've sort of unlocked exactly what that's
going to look like. You know, stables is the next vault that we'll be opening up, you know,
to make sure that both institutional and retail alike, right, have this opportunity, right, to
engage, you know, the utilization of the assets in their wallet, you know, to access real yield,
right. And it's funny, this conversation about BTC and
what's real and what's not, blah, blah, blah, it's no different, right? We didn't really get to the
L2 conversation in regards to, you know, BTC's sort of expansion, you know, but you're going to
see a lot of things happen, right? You know, in 2025 that are definitely going to change, you
know, financial markets and digital assets forever.
Just so keep your eye on the ball, focus on what's real and what's most meaningful to you.
And for us, we're just going to be working really, really hard to sort of allow that high quality
assets and collateral to actually participate in actively managed strategies, you know, because it deserves it.
It deserves real utility, you know, that generates real value from real asset managers, right?
So that's our rub.
Well, let's go, guys.
And that's all we have for you today.
So thank you to all of our speakers.
Thank you to Bracket and a massive shout out to the audience as well who've tuned in.
Thank you so much.
We'll catch you on the next one.
Host
Bracket
from
Bracket Labs
