The $300 Trillion Credit Rotation Nobody Sees Coming

Right now, a $300 Trillion Credit Rotation is forming—and nobody sees it coming. Most investors and even Wall Street think these Bitcoin Treasury Companies are just a bubble, another creative play on Bitcoin, or maybe just a way to quickly generate cash. But… They’ve completely missed the real story—and it’s WAY bigger than anyone realizes. These companies aren’t gambling—they’re building highly targeted financial products, each acting like a straw siphoning trillions out of broken credit markets and into Bitcoin.

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Episode Transcript

Speaker 1 (00:00):
Right now, a three hundred trillion credit rotation is forming,
and nobody sees it coming. Most investors and even Wall
Street think these bitcoin treasury companies they're just a bubble,
another creative play on bitcoin, or maybe just a way
to quickly generate cash. But they're completely missing the real story,
and it's way bigger than anyone realizes. Because these companies

(00:21):
they're not just gambling. They're building highly targeted financial products,
each acting like a straw siphoning trillions out of a
broken credit market and right into bitcoin. I'm Mark Moss,
partner at a leading bitcoin venture fund, officer of a
publicly traded bitcoin treasury company, and today I'll reveal exactly
how the shift is unfolding, why banks are dangerously offsides,

(00:43):
and how you can position yourself to benefit. So let's go,
all right, So here's what nobody talks about. Fifty two
percent of US corporate pension funds are legally required to
hold fixed income, not because they want to, but because
they have to. Now, since two thousand and nine, pension
funds have shifted fourteen percentage points away from stocks and

(01:07):
into bonds, the number of plans holding more than half
their assets and fixed income has tripled. Now this is
an investment strategy. It's regulatory handcuffs. The municipal bond market
alone four trillion dollars. Insurance companies are mandated by law
to file every unrated municipal bond with regulators for credit assessment.

(01:27):
Now they can't just buy whatever makes sense. Property and
casualty insurers they hold two hundred and sixty three billion
in muni bonds. Life insurers hold two hundred and eighteen billion.
Why tax advantages, regulatory requirements. But here's the real kicker.
Total global debt just hit a record three hundred and
eighteen trillion. That's government and corporate bonds combined. The entire

(01:52):
bitcoin market it's only two trillion. We're talking about one
hundred and fifty nine times more money trapped in traditional
debt then exists in all of bitcoin. And here's what's
killing these investors, the m too money supply that I
talk about all the time. It's grown from four point
seven trillion in two thousand to over twenty two trillion today.

(02:14):
That's a four hundred and sixty seven percent increase. Now
do the math. That's roughly a ten percent monetary debasement
every single year. Meanwhile, you're safe unibonds they're paying you
what three five percent before taxes. So you've got millions
of retirees whose pension funds are legally forced to lose

(02:37):
purchasing power every single year, and the lower their funding
status gets, the more bonds they're required to hold. It's
a death spiral with a regulatory mandate. Pension funds. Of
course they won out. Insurance companies, they want out. UNI
bonds investors, they won out, but the mandates keep them
locked in place until now. Because what if there was

(02:58):
a way to meet these exacts, say, mandates, while actually
making money. But here's the deeper problem traditional credit markets.
They're not just underperforming, they're fundamentally broken. Remember back in
two thousand and eight, the great financial crash, right, credit
rating agencies downgraded four thousand, four hundred and eighty five
collateralized debt obligations in the first quarter alone. Now, these

(03:21):
were supposed to be safe. They're supposed to be safe
investments that had been packaged and repackaged until nobody could
even articulate what the risk was. Fifty percent of triple
A rated CDO tranches got downgraded to junk status. By
twenty ten, the rating agencies they had no idea what

(03:42):
they were even doing. What they're rating that same bundled complexity.
It's everywhere now. Commercial lending is sixteen point four trillion
and growing. Sovereign debt twelve point three trillion in new
borrowing just this year. Add unibonds, corporate debt, mortgage backscat curities,
all of it packaged, all of it bundled and sliced

(04:03):
themto trunches that make the original assets impossible to even value. Now,
when one loan defaults, you can't tell which other investments
are going to get hit. And here's what's crushing everyone.
Interest costs as a share of economic output just hit
the highest level in twenty years. Between twenty twenty one
and twenty twenty four, debt servicing costs went from the

(04:25):
lowest to the highest in two decades. But investors, they
keep bidding up bond prices anyway, Why again, because they're
mandated to buy this stuff. Pension funds, insurance companies, muti
bond funds, they have no choice. So you've got desperate
buyers bidding up prices of increasingly risky assets. Classic healed compression.

(04:49):
Everyone's racing to the bottom, accepting lower and lower returns
for higher and higher risk. Total outstanding government and corporate
bonds globally over one hundred trillion. That's larger than global GDP.
But nobody can actually tell you what's in these things anymore.
Commercial mortgage backed securities, collateralized loan obligations, unibond insurance, all

(05:12):
wrapped around unibon insurance. Now this is two thousand and
eight all over again, except bigger. The CDO market peaked
at two trillion before it imploded. Today's credit market fifty
times larger. The system is drowning in complexity, trillions of
dollars trapped in instruments that nobody fully understands, pain yields

(05:34):
that don't compensate for the actual risk. But what if
there was a completely different approach. What if instead of
bundled complexity, you add radical simplicity. Now here's what Wall
Street doesn't want you to know. Of course, their margins
a terrible blackrock. The world's largest asset manager charges zero

(05:55):
point forty five to zero point five to two percent
annually on their bond funds. That's less than half a
percent per year. To manage money, Muni bond underwriting about
zero point three seven percent per deal. Corporate bond underwriting
even thinner. Now, these spreads have been in a fifteen
year death spiral. Competition is driving these margins towards zero.

(06:18):
It's gotten so bad that City and Ubs just exited
the muni bond business entirely the margins they couldn't support
their operations. As one industry insider put it, you get
to a point where spreads are so low that the
margin on a deal for an underwriter becomes thin. But
there's a floor. They're desperately trying to stay profitable by
getting more efficient, better technology, lower costs, automated processes, but

(06:41):
they're still just fighting over breadcrumbs. When your margins are
this thin, you can't innovate. Every dollar spent on research
and development comes straight out of profit. So they're stuck.
They're trapped in a commodity business with no way out. Now,
the smartest firms they tried to escape and do private credit,
higher fees, less competition, But even there, margins are getting

(07:01):
compressed as more players crowd in. So let's recap here
real quickly. First Wall Street's best case scenario three to
four percent total margins on a good day, Annual management
fees under half a percent, underwriting fees about one percent. Okay,
that's the problem. Now imagine an alternative. What if instead

(07:23):
of managing other people's money for tiny fees, you can
create instruments that let you keep fifty percent of the upside.
What if instead of fighting over basis points, you could
capture the appreciation of the hardest money ever created. Well,
that's exactly what Michael Saylor has figured out, and it's
about to make traditional financial margins look like a rounding error.

(07:44):
Now here's the breakthrough that changes everything. What if you
could create financial instruments that pay junk bond yields but
qualify as investment grade under existing regulations. Investment grade means
rated BBB or higher by the major agencies's threshold that
pension funds and insurance companies and munibond investors are required

(08:05):
to meet. And Sailor figured out how to hack this system.
Instead of backing bonds with unpredictable cash flows, back them
with bitcoin, take strategies, STRF strife preferred shares. They pay
ten percent annually. That's more than jump bonds. And here's
the key. They're backed by bitcoin holdings worth ten times

(08:25):
the face value. Now, traditional corporate bonds they're backed by
business cash flows that could disappear overnight. Muni bonds they're
backed by tax revenues that fluctuate with the economy. But
bitcoin backed instruments they're backed by the hardest money ever created.
Strategy even created new metrics to prove this, like BTC

(08:46):
risk that's the likelihood of under collaborization at maturity, or
BTC credit spread that's the yield required to offset the
bitcoin risk. Now, look, this isn't theoretical. This is regulatory
arbitrage at its finest. These instruments fit perfectly into the
existing investment grade boxes that mandate investors are required to fill.

(09:07):
Pension fund managers have a legal duty to maximize financial benefits.
Insurance companies must invest in sufficiently rated securities. Communi bond
funds need investment grade paper. Now strategies strike STRK it
pays out eight percent with convertibility, Strife pays ten percent
cash only, and STRD stride pays ten percent as the

(09:31):
highest yielding option. Now compare that to traditional investment grade
bonds paying three to five percent. Now, this is the
same regulatory approval, same fudiciary compliance, but it's double the yield.
It's backed by an asset that's been appreciating at sixty
percent annually for over a decade. Now, again, this isn't
just a better mousetrap. It's a completely different category of

(09:53):
financial engineering. And here's why Wall Street can't compete with
the math behind it. Bitcoin's compound annual growth rate over
any four year rowin window the minimum has been twenty
four percent, the average about sixty five percent. Now, since inception,
Bitcoin has delivered a one hundred and forty percent compound
annual return. Even being conservative, let's just use sixty percent annually.

(10:15):
Going forward strategies, preferred shares pay ten percent coupons. Bitcoin
appreciates sixty percent annually. That leaves fifty percent retained profit margins.
Now compare that to Wall Street's three percent. Now, look,
this isn't theoretical. Recently, a real estate investor in Toronto
deployed this strategy. Borrowed one hundred thousand dollars against a
rental property. Cash flow bought Bitcoin generated an additional eight

(10:38):
hundred and fifty nine thousand dollars in just ten years.
No additional out of pocket capital. Now strategy takes this
concept and scales it. It issues convertible bonds at zero
percent interest, issues preferred shares at eight to ten percent
by bitcoin with the proceeds. Now, as one analyst put it,
strategy strategically uses equity, issues convertible bonds, and in light

(11:00):
volatility arbitrage to build a hybrid capital stack. It mimics
central banks mechanics by creating funding sources through equity and
debt issuance. Now, traditional finance fights over basis points bitcoin
treasury companies they capture fifty times higher margins. Now the
math is so compelling that Trump Media, Game Stop and

(11:20):
dozens of other companies are now announcing bitcoin treasury strategies.
Corporate treasury adoption has entered a news phase. Companies whose
primary objective is bitcoin accumulation are purpose built from the
ground up. And this is how capital always works. Money
flows to the highest risk adjester returns. When one strategy
delivers fifteen times better margins than the alternative, capital moves.

(11:44):
And here's the beautiful part. Every successful bitcoin treasury company
proves the model works, making it easier for the next
company to get funding, get regulatory approval, get institutional backing,
and Wall Street's been optimizing around three percent margins for
decades bitcoin treasuries. They just showed them what fifty percent
margins look like. Now, look, this is in competition, like

(12:06):
it's annihilation, and Sailor just built a blueprint that everyone
else is copying. Now, while Wall Street's been sitting around
debating whether bitcoin treasuries are sustainable, Michael Saylor as Strategy
have been quietly building the most sophisticated capital conversion machine
in financial history. And I'm not talking about the theory anymore.
I'm talking about a track record that makes Goldman Sachs

(12:29):
look irrelevant. And the market has taken notice. Strategy stock
has served two hundred and fifty eight percent from its
fifty two week low of one hundred and two dollars.
That's not speculation rewarding. That's systematic execution being recognized by
institutional capital. Now, look at these numbers. Strategy now holds
five hundred and ninety two thousand bitcoin. That's over sixty

(12:50):
two billion worth, representing two point eight percent of the
entire bitcoin supply. But here's what's truly insane. They've added
to their bitcoin position every single quarter since August of
twenty twenty. Think about that, through the twenty twenty one peak,
through the twenty twenty two crash, through the twenty twenty
three banking crisis, the twenty twenty four ETF launch, that

(13:11):
never stopped any of them. Twenty twenty five, they just
continued to turn it up. Ten billion dollars raised in
just four months, six point six billion through their ATM
equity program, two billion in convertible notes at zero percent coupon,
one point four billion through their new preferred instruments. I mean,
this is industrial scale bitcoin acquisition. But here's where it

(13:32):
gets really interesting. Remember those precision straws I talked about.
Sailor didn't just build one, he built the entire assembly line.
Strike for income investors eight percent perpetual coupon convertible at
one thousand dollars per share, launched in February, already trading
twenty two percent above IPO price. Strife for institutions ten

(13:52):
percent perpetual preferred with no dilution to shareholders. This is
permanent capital with no refinancing risk, no covenant, no collateral requirements.
And now Stride their newest instrument targeting specific institutional mandates.
See what's happening here. Each instrument is a different precision
tool targeting different pools of trapped capital. Pension funds that

(14:15):
need study income, Strike insurance companies that need yield without
equity risk strife, municipal treasuries with specific mandates stride. It's
like having four different drill bits for four different types
of rock. And they're just getting started. Strategy just announced
their forty two to forty two plan, forty two billion
in equity, forty two billion in fixed income by the

(14:37):
end of twenty twenty seven. Now, to put this into perspective,
they completed their previous twenty one billion plans so fast
they just had to double it. Now. Wall Street loved
to dismiss this as just another crypto play, but look
at this correlation data. Ninety eight percent correlation between Strategy
stock price and their bitcoin value per share. Now remember

(14:58):
those Wall Street margins talked about, like black Rock makes
three to four percent on placement fees, strategies making fifty
percent profit margins because they're not just managing money, they're
converting it into the world's hardest asset. And here's the kicker.
One hundred percent of their bitcoin remains unencumbered. That's pristine
collateral that can backstop every future instrument they create. And

(15:21):
this isn't just happening in the US. Over eighty public
companies have now adopted bitcoin treasury strategies. Metaplanet in Japan
just announced their five point four billion, five five five
million plan. The playbook sailor Debugged is being replicated globally.
The institutional validation it's already here. These aren't retail day
traders buying strike. These are pension funds, insurance companies, and
sovereign wealth funds that need yield without violating their mandates.

(15:45):
As one analyst put it, strategy didn't just prove the concept,
They built the assembly line for capital conversion. The siphon's
working and the flow rate is accelerating. Now, let's look
at Metaplanet in Japan, which proves this model works across
different markets and regular environments. Japan had negative interest rates
until March twenty twenty four. Their ten year government bonds

(16:06):
currently yields just one point four to two percent. Japanese
institutions have five point four trillion trapped in low yielding instruments,
which creates the same mandate problem that we have in
the US Metaplanet adapted Strategies playbook for Japanese regulations. They
now hold eleven thousand, one hundred eleven bitcoin worth one
point one two billion dollars, making them the seventh largest

(16:30):
corporate bitcoin holder globally. Now, their approach uses different instruments
tailored in Japanese markets. They've issued five point three billion
in moving strike warrants, the largest program in Japanese history.
They also issued zero coupon bonds specifically for bitcoin purchases
and generate eighty eight percent of their revenue from bitcoin
option strategies. And the results well their stocks up twenty

(16:53):
two hundred percent year over year and about three hundred
percent bitcoin yield, meaning they're increasing bitwo coin per share
faster than they diluted Metaplanets target of two hundred and
ten thousand bitcoin by twenty twenty seven, there's roughly one
percent of the total supply. The same concept as strategy,
different regulatory framework. Now. This demonstrates that the model scales

(17:15):
across different markets. American companies are accessing US credit markets
while Japanese companies are accessing Japanese bond markets. Both are
converting trapped capital into bitcoin using instruments that meet local
regulatory requirements, which brings us to the supply implications when
this scales globally. Now here's the math that's hiding right

(17:35):
in plane sight. Okay, so bitcoin has a hard cap
of twenty one million coins, nineteen point seven have already
been mined. That's about ninety four percent of the total supply.
But the effect of supply is much smaller. Between three
and four million bitcoin are permanently lost, forgotten passwords, destroyed
hard drives, whatever, Right, the true circulating supply is closer

(17:56):
to about sixteen to seventeen million bitcoin. The new supply
shrinking really fast. Only about one hundred and sixty four thousand,
two hundred and fifty bitcoin will be mined just this year.
The having schedule means that this number keeps getting smaller. Now,
if we look at the corporate demand, public companies alone
hold over seven hundred and twenty five thousand bitcoin. That's

(18:16):
more than four years of new supply. Private companies hold
an estimated three hundred thousand more. Now, corporate purchases in
twenty twenty five have already exceeded the entire annual mining output.
Now this is just beginning. The regulatory barriers are just
starting to fall. The strategy playbook is replicating globally. Meta
Planet in Japan. New companies announced weekly across Asia, the

(18:40):
Middle East, North America. I mean run the numbers forward.
If just one percent of the three hundred trillion global
credit market rotates into bitcoin backed instruments, that's three trillion
chasing twenty one million coins. We're seeing the early stages
of the rotation right now. Credit rating agencies are starting
to recognize bitcoin back debt as instrument grade. Institutional mandates

(19:03):
are beginning to approve these instruments. And this isn't going
to happen gradually. Supply shocks in fixed cap assets happen suddenly.
Each successful corporate issuance proved the model, Each regulatory approval
opens new pools of capital. Now, consider this strategy alone
targets eighty four billion in bitcoin purchases by twenty twenty seven.

(19:24):
Metaplanet targets two hundred and ten thousand bitcoin. Now that's
before we count the dozens of other companies building similar programs,
which brings us to the investment implications. Right now, there's
three ways to position for this rotation. Each target different
risk balances and return expectations. All right. First, there's the
pure play equity exposure right strategy Metaplanet. They offer maximum

(19:46):
leverage bitcoin treasury execution strategy shows a ninety eight percent
correlation between its stock price and its bitcoin value per share.
The market now values it primarily as its bitcoin holdings,
not as the software business. Metaplanet trades at the eighty
first percentile of fair value, but has room to run.
It's achieved three hundred and ninety one percent gains year

(20:06):
to date with a three hundred and six percent bitcoin yield.
Second yield plays through bitcoin back preferreds. These instruments offer
eight to ten percent annualized yields with bitcoin collateralization. Third
is the core bitcoin holdings. The ultimate asymmetric bet remains
native bitcoin. First, these companies are wrappers around bitcoin exposure.

(20:27):
They're not substitutes for it. The three hundred trillion credit
rotation isn't a prediction. It's a process that's already underway.
The precision straws. They're already working the supply shock. It's
accelerating the investment window. It's narrowing. The question isn't whether
this happens. The question is whether you're positioned before everyone
else figures it out now. If you want to know

(20:49):
more about the number one thing most miss when valuing
bitcoin treasury companies, then you should watch this video right here. Otherwise,
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