October 12, 2025 • 48 mins
Cory Klippsten, founder of Swan Bitcoin, and Ben Werkman, CIO of Swan, join us to break down the next evolution in Bitcoin investing: public companies engineered from the ground up to maximize Bitcoin exposure. This isn’t MicroStrategy 2.0—it’s something entirely new. From Swan’s vertically integrated model to the overlooked opportunities in private credit, Cory and Ben reveal how Bitcoin-native strategies are disrupting traditional finance from the inside out. In this episode, we explore why buying spot Bitcoin is just the beginning—and how Swan is building a full-stack financial institution with Bitcoin as its base layer. We unpack the hidden leverage behind Swan’s business model, the risks and rewards of taking the company public, and what it takes to navigate capital markets while staying true to Bitcoin values. Whether you’re a sovereign individual, fund manager, or curious builder, this episode unlocks the future of Bitcoin capital formation—and the asymmetric edge that Swan is betting everything on.
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Episode Transcript
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Speaker 1 (00:00):
The advice that we give to our private clients who
are going to buy, A lot of them are going
to do this regardless of what we say. We say,
have eighty percent of your bitcoin price exposure.
Speaker 2 (00:09):
And I think that's what people are starting to feel
now as you're seeing the demand ramping up from these
treasury companies. They're going to be buying all the time.
Their goal is to accumulate more bitcoin for share for
their shareholders.
Speaker 3 (00:20):
We're seeing crypto like returns. We've seen companies doing five
hundred percent in the last couple of weeks, blockchain groups
up two thousand percent, and six months, I think smart
webs up like eight thousand percent. Of it is insane,
and I see these getting priced differently in the market
as well as far as the correlation of the stock
price to bitcoin's price. So how do you look at those.
Speaker 2 (00:43):
I think that's a fair way.
Speaker 3 (00:46):
Corey and Ben here we are talking about maybe the
most exciting topic in the bitcoin space right now, which
is the bitcoin treasury companies. And I know for a
lot of people in the industry, I see they're talking
about a bubble.
Speaker 1 (00:59):
They're talking about.
Speaker 3 (01:00):
Out building equity, but not any value. And I think
there's a lot of misconceptions around that space. I've also
been sort of reframing the way I look at this,
But I want to hear directly from you. Congratulations on
just launching sequence sequons sequans. We're trying to get that
figured out. About three hundred and eighty five million dollars raised,
(01:21):
one of the biggest launches that we've seen so far.
Congratulations on APPED. What do you think separates you from
some of the other big launches that we've seen in
the last month or so.
Speaker 1 (01:34):
Yeah, So i'd say, first, thanks for having us on.
I'm glad to bring my homie, Ben Workman. Yeah, excited me,
happy to be here. Yeah, chief investment officer for SWAN.
And obviously we're we're doing a lot in the space.
And I'd actually kind of like to start with essentially
what happened over the last couple of years that kind
of got us to this point. And I'd say, really,
(01:57):
if you think, you know, we both kind of got
into the space, probably maybe you even earlier than I did,
but you know, twenty seventeen, and let's call that kind
of like the crypto era was seventeen when I started
twenty fifteen.
Speaker 3 (02:07):
Then then was a trypto rabbit hole, and then in
twenty nineteen I went full bitcoin.
Speaker 1 (02:11):
Right, So if you think about call it like twenty
seventeen through about twenty twenty three, the whole thing was
basically bitcoin versus crypto and trying to overcome one hundred
billion dollars of alt coin VC money that was trying
to market coins and claim that they're better than bitcoin.
So the top of funnel was basically lying about bitcoin
so that they could sell their pump and dump tokens.
(02:33):
And what changed in the market structure was the launch
of the ETFs in early twenty twenty four January twenty
four and then the rise of these treasury companies. It
means that people now are not you know, coming in necessarily.
I mean the majority of SWAN clients now for for
Swan financial services actually access bitcoin price exposure through a
ticker in their brokerage account. First they're buying an ETF
(02:55):
or they're buying micro Strategy or one of these other
treasury stocks first, and then they go down the rabbit hole.
But they're not they're learning about bitcoin. You know, we
talk about Uncle Larry at Blackrock, Anti Abbeit Fidelity and
crazy cousin Mike over at micro Strategy, that's who they're
learning from. Yeah, and it's mostly really good information about
bitcoin that entices people to actually want to learn more.
(03:16):
And then they access your show, or they read Lynn
Alden's book or something, or find as on YouTube video
and they're kind of down in the funnel a little bit.
And so when I dovetail, like for us even to
just keep on serving our two thousand plus enterprise clients,
that's the number of enterprise accounts we have, like businesses
that buy bitcoin, and then you know one hundred thousand
plus swan clients, so many of them are looking at
(03:39):
bitcoin now through a lens of like, Okay, I feel
like Sailor's doing fifteen things, which of those are applicable
to my family office or my small and medium sized business?
And so that's how we have to talk about it.
So it basically pulled us in starting really like mid
last year Q three and definitely into Q four with
the red wave and everything. You know, we got sucked
(03:59):
into this, had to talk about it through that lens,
and then once we kind of dove into the space,
we were like, it's not a big leap for us.
To go from serving these enterprise clients and you know,
being involved in the media and education around this space,
to go whole hog and actually start doing the work
around the coin treasury companies as well. And so I mean,
(04:19):
maybe I'll pause so I don't have to talk the
whole time, but you know, Ben, if you want to
just kind of talk about getting before we get.
Speaker 3 (04:27):
I loved the point that you brought up, and I
think it's worth just bears repeediing. So sort of like
the crypto space was sort of always like an arbitrage
on the trend, right, He's always trying to leverage bitcoin
into your point, sell these other tokens so they can
go buy bitcoin.
Speaker 1 (04:40):
Yes, same of a thing, And.
Speaker 3 (04:41):
Unfortunately it was like a DDoS attack against bitcoin of
all this big money coming in and they were able
to buy tokens at a discount and then dump them
on the market.
Speaker 1 (04:50):
They liked that.
Speaker 3 (04:51):
But you know, you know, I we've talked quite a
bit about sort of these technological revolutions and these phases
of capital that comes in. And in this second phase
of capital, or you have institutional capital, they can't go
allocate a billion dollars to Shibu nuw m true or
doze coin. So we have real allocators and they're looking
for real place that need to be registered with the
(05:12):
SEC and it has to be liquidity, and I have
to be able to do options against them. And so
it's just a natural part of this evolution that we
have institutional money and it's looking for the way to
get in. It also wanted also more volatility on bitcoin,
which is what the all coins were, and so it's
sort of sucked all of that out of the space.
And that's what I've seen, is that's kind of what
(05:33):
you're saying, or.
Speaker 1 (05:34):
What you're absolutely Yeah. Yeah, we really don't sell against
like Cardano and Ethereum and Ripple anymore at all. It
just doesn't even come up.
Speaker 3 (05:41):
Yeah, Cardano. Charles Hoskins finally found the only real use
case for cardano selling it for bitcoiniling it for bitcoin.
Speaker 1 (05:49):
He finally found it cool.
Speaker 3 (05:51):
So, Ben, how long have you been studying bitcoin and
sort of involved in the space.
Speaker 2 (05:56):
So Bitcoin I found in twenty thirteen. I screwed it
up the first time, like a lot of people.
Speaker 1 (06:00):
We all find it.
Speaker 2 (06:01):
It runs up to one thousand. You sell it, you
think you're the world's best trader. Yeah, it takes you
a little bit to figure out exactly what it is
we're getting rid of. But I came back to it
pretty heavily around twenty sixteen, which really when I went
down the rabbit hole, and I was the crazy guy
in all my jobs. Yeah, trying to pin down all
those coworkers and tell them about bitcoin at lunch and
on brakes. And you know, once you start going down
(06:22):
that rabbit hole, it consumes all of your mind's energy. Yeah,
it's all you really want to think about, because you
see what a monumental shift in asset like bitcoin really is.
Speaker 1 (06:31):
Yeah.
Speaker 2 (06:32):
But it wasn't really until twenty twenty when Sailor and
Strategy came out and entered as like that first corporate
that wasn't associated with bitcoin in the beginning. They weren't
a mining company, they had no association. When they adopted it,
that was when it really clicked for me, and I thought,
this is the start. This is what we've all been
talking about for years, is we're just waiting for one
company to break that dam and make this successible to
(06:55):
everybody else.
Speaker 3 (06:56):
Was it really one company though? Or was it really Metaplanet?
Proving the strategy could be duplicated.
Speaker 2 (07:03):
Well, there's been a big evolution here for sure, but
let's not discount that Strategy had to do a lot
of work.
Speaker 1 (07:08):
To break this safe.
Speaker 3 (07:09):
But it worked for Strategy, But like til Metaplanet did it,
it was like, could someone else duplicate it?
Speaker 2 (07:16):
Yeah, the proof of being able to do it and
then being able to do it in another market was
a huge step.
Speaker 1 (07:21):
Yeah.
Speaker 2 (07:21):
I mean what Simon and Dylan are doing over there
in Japan is amazing.
Speaker 1 (07:24):
Yeah.
Speaker 2 (07:24):
They found this really niche country with a lot of
weakness in their economy, not the right type of access
to bitcoin directly. You have to get it through your
retirement accounts to get the tax advantages. They found a
really unique setup there that they could take advantage of.
But then what they did that was really good was
they took the mentorship from Sailor. I think there's a
lot of people that look at this and go, I
(07:45):
could go do it better, But there's a huge amount
of value in taking the wisdom from the people that
have been fighting the battles for a roon time, and
that's what Sailor's been doing. He's been proving the markets.
He's been showing what products are effective and which ones aren't.
He's been educating on what it means to be truly
a creative for your shareholders. Yeah, and those guys took
that ran with it.
Speaker 1 (08:05):
Yep.
Speaker 2 (08:05):
You don't have to reinvent the wheel here when someone's
gone through and done all the work to show you.
Here's how you prove the value to your shareholders. Here's
how you execute this playbook. Here's the steps you should
take as you scale this. That's a huge head start
for everyone entering the market now, and now you're seeing
a flood of them coming in. So everyone's gonna tweak
this a little bit and try to make it their own.
(08:26):
But the playbook's out there, so you've just got to
figure out how that fits into your organization.
Speaker 3 (08:30):
The best Yeah, I want to understand the playbook a
little bit better, and so let me kind of frame
it up for the audience is maybe people are just
starting to catch up. And actually, last time I had
you here, I think those are on Thanksgiving or Christmas.
Speaker 1 (08:42):
Sounds about right.
Speaker 3 (08:42):
I remember we were down here doing this one event.
I actually asked you a similar question. What's the difference
of a company that puts big one on the balance
sheet versus a treasury company. But now I see it
as three actually different strategies there. I want to ask
you about that real quick, but just for the audience listening.
Part of the reason why this is the most exciting
thing is bigcoin gets kind of boring and bear markets
(09:03):
number one, but number two, we're seeing crypto like returns,
meaning we've seen companies doing five hundred percent in the
last couple of weeks. A couple months we've seen companies
do two thousand percent. The blockchain groups up two thousand percent,
and six months we've seen companies I think smart Web's
up like eight thousand percent. I mean it is insane
(09:24):
five thousand percent and so sort of sucked the room
out of the crypto space. But back to the companies.
Last time I asked you about two, but now I
sort of see three. So I want to see how
you think about this. So there's like level one, which
is like Tesla. I put big one on the balance sheet, yep, okay,
then I have and cool Maybe game stuff is still
(09:46):
in that area.
Speaker 1 (09:46):
Who knows what they're doing.
Speaker 3 (09:47):
They bought a little bit of bitcoin, but they still
have a business, right their businesses over here. They have
money in savings their treasury.
Speaker 1 (09:52):
They put them in a bigcoin.
Speaker 3 (09:53):
Level two is like it's a bitcoin treasury company, but
there's a business and they're trying to strategy. I'd put
similar there. So they have their medical business, but then
they're also running a bitcoin treasury strategy. Nakamoto says that
they're going to run all these businesses, They're going to
fold all that in Jack Mahler's company.
Speaker 1 (10:15):
They're going to do all these financials.
Speaker 3 (10:16):
So you sort of have all these businesses with bitcoin.
And then level three you have the pure play and
the peer play is the meta planet. The peer play
is the micro strategy, where really the stock is the product.
And I see these getting priced differently in the market
as well as far as the correlation of the stock
price to bitcoins price. So how do you look at
(10:37):
those three types? Am I looking at that riote or
would you combine those last two?
Speaker 2 (10:42):
I think that's a fair way to look at what's
happening in the market right now. I mean, there's definitely
a separation in the way that these companies are trying
to operate. Some are focusing one hundred percent on.
Speaker 1 (10:52):
The treasury strategy.
Speaker 2 (10:53):
They're saying, our equity is going to become our main product,
and we're going to securitize around our balance sheet, and
we're going to find unique ways to use bitcoin as
the backing to bring products people desire, yield products, duration products,
whatever it is that you're looking at. I think that
there's still a segment of the market that we haven't
seen yet, because even when you mentioned like as similar,
they came at it from a very similar approach to
(11:15):
what Strategy did, where that core business really wasn't growing anymore.
Now we've seen recently they've made some announcements, they're trying
to launch new uses for their product, so they're trying
to grow it, but effectively the growth installed out of
the company. The equity was getting punished because of it,
so they made a pivot like what Sailor did with Strategy.
Right they were competing against Microsoft's the core business was dying.
Speaker 1 (11:34):
What I don't think.
Speaker 2 (11:35):
We've really seen yet in the market is a true
growth company that's also running an active treasury. And I
do think that that's going to bring a unique value
proposition into the market because when you actually have a
company that's scaling the core operations and growing that cash
flow aggressively alongside with utilizing the capital markets to run
an active treasury. Now you give the markets two things
(11:57):
to focus on assigning value to growing that income statement side,
you're not abandoning it and making it an afterthought, because
when you look at the way the market's valuing these companies,
they're basically ignoring the core operations now and they're just
going to multiples of the balance sheet, right, multiples of
med asset values what everyone talks about a lot. But
if you have a true growth company or one that
even hits a hypergrowth phase there, that gives you something
(12:19):
really interesting to talk about because you're now driving shareholder
value from both sides of the financials. You're still driving
it through the income statement. You're showing that aggressive growth,
you're showing that you can deliver on a core product,
and you're also making sure you're deploying the assets on
your balance sheet in a way where you're constantly building
that intrinsic value under each share. So I do think
(12:39):
that actually, over time, if someone could execute that appropriately,
and I think you have to separate the responsibilities of
those because these treasuries, those are full time jobs. You
need to be engaged in the capital markets, looking at
the terms that are happening out there, figuring out when
the perfect time is to do a transaction, to issue preferreds,
to issue converts, whatever it is you're doing. You need
hyper focus there. But I think that when you see
(13:02):
both sides of those being run effectively, you've got a
powerful combination for creating your older valuable We haven't seen
that yet, we've seen.
Speaker 3 (13:09):
And when you say growth company, you're differentiating that from
a similar or a MicroStrategy whose business is sort of
stagnant or dot saying. You're saying, we actually have a
real company that's actually growing fast, okay.
Speaker 1 (13:21):
Which we haven't seen yet. And I would say that
Similar and MicroStrategy are not in different categories other than
the size and success of Microstrategies Treasury arm because they
have similar core businesses, and in fact, microstrategies core business
is probably quite a bit larger than Similar's core business.
It's just dwarfed by the size of the Treasury operation,
which has been so successfulful.
Speaker 3 (13:41):
And I believe that's the answer you gave me last
time I asked you that question, because you said if
an Apple were to put BITC one, it's balance sheet.
The amount of bitcoin it holds in proportion to the
business is so small they can't really wag that that's
the right kind of thing. And micro strategy is sort
of being the opposite their business.
Speaker 1 (13:57):
Is it one hundred and forty.
Speaker 3 (13:58):
Million a year or something like that, And I don't
know exactly versus the whether they have fifteen billion or
whatever bitcoin, right, So it's a it's a big mismatch.
Speaker 2 (14:07):
Sixty Yeah, they're usually about a sixty million in free
cash flow a year through strategies, sixty million in free
cash le right, But there is that nuance where it
does need to be an asset like business because what
you still absolutely need to have if you're planning to
run an active treasury or using leverage against your balance sheet,
is you have to be asset like. You can have
a lot of capital expenditures that you have to be
making because you still need that sensitivity on the balance
(14:29):
sheet to the volatility of bitcoin. So it is a
special type of company that's going to fit into that slot.
Speaker 1 (14:35):
We just haven't seen that yet. This is, by the way,
this is why and you know, God bless the bitcoin minors,
and that's a whole other category. But it's the reason
that you don't see them being in the same kind
of conversation. It's because most of them are vertically integrated
and they are still trying to play this you know
call option value of maybe doing HPC as well or
moving a lot of their business towards that, and so
(14:56):
it doesn't have that sensitivity to the bitcoin price that
is driving you know, all this value in micro strategy.
And so you know, there's Marathon that actually has the
second most bitcoin, but it just can't trade that same way.
It can't offer securities and instruments the way that your
strategy can because it's vertically integrated and has all these
other assets. I do think, by the way, that a
(15:18):
miner that basically only did you know, profit share and
just did manage mining could do it because then it
would be asset light. You leave the assets on the
balance sheet of their investors and just manage the mining
for a profit share could do a treasury strategy. But
they seem all very distracted by HPC right now, which
is reasonable because that's lucrative. Yeah. The one thing I
(15:39):
would say that would be like another level further and
maybe a different category company, which I which is if
it's a growth company that actually has a reason to
be in bitcoin treasury strategy, where there's actually synergy and
where they're and I think that's what you see the
promise or the pitch in like Dangling Strike as maybe
(16:00):
folding into the tether spack at some point, or Knackomoto
buying BTC Inc. And building financial services someday or something
like that. They're leaning into that because they know that
actually will be the best possible outcome. And I think
it's why micro Strategy historically until they kind of went
peer play and realized all they actually sell is financial
instruments and that is what they sell, which I can't
(16:22):
wait to hear you kind of elaborate a little bit
more on what you were saying in the pre show.
But I think that's why you see these companies pitching
that as their future. It's because that's what micro Strategy
did too. They were like, Oh, we're going to do
d IDs, We're going to do ordinals, we're going to
do lightning, like all these different things, trying to say
that they were going to do something related to bitcoin,
because there should be synergies between having a huge balance
(16:45):
sheet and talking about bitcoin all day and being able
to leverage that bitcoin for bitcoin products and leverage that
balancedet for bitcoin products, and also leverage the fact that
you're doing marketing and media around both and it's synergistic
and nobody's done that yet. Yeah, it's so early.
Speaker 3 (17:00):
We don't know what the best models will be yet.
But the way that I was looking at it, and
sort of the way Sailors sort of framed my mind
around this, is that who is your customer? So who's
buying the product? So right now I see in the
market around all these new companies that are popping up
way smaller than what you guys have done. But these
companies are starting with two bitcoin and growing to a
hundred bitcoin like really quickly, right, and the market is
(17:22):
sort of pricing them based off of the multiple nab
the m nab as you said, and then they're looking at, okay,
well why is it the two times or six times
or eight times or ten or eighteen times, And a
lot of that has fast how faster adding that bitcoin there?
But those are all ways that we can evaluate how
fast or adding the asset to the balance sheet, and
(17:43):
then how that will reflect in the stock price. So
I'm looking at it purely from a bitcoin lens. If
I'm trying to understand similar Now I have like this
Benjamin Graham value investor, like, well, what's the underlying business
and what's the profitability and what's the EBITA and once
the cash flow projections and okay, I kind of understand
healthcare business, but it's not really my niche but I
kind of get it. Oh, but then what's this bitcoin thing?
(18:05):
And like most of these value investors, they don't know
about bitcoin, and the bitcoin guys don't know about that.
So now I have this problem where I've confused my buyer, right,
because the first thing that we wanna do is like
who's my avatar?
Speaker 1 (18:16):
Who am I selling to?
Speaker 3 (18:18):
And so when I look at people buying these things
or buying them off these multiples and these growth strategies.
But now I don't know anything about biotech, And honestly.
Speaker 1 (18:27):
True, act I went.
Speaker 3 (18:28):
I invested into a fund about two years ago that
was buying distressed biotech companies and liquidated him and I
lost half my money. So I ain't getting into that again.
I don't know anything about that, right, So I kind
of look at it like that. So maybe when you
talk about like bitcoin financial services like some of these
companies you mentioned. Maybe that's a little bit more in line,
(18:49):
but maybe if you get too far off sides, then
you don't know your customer properly. I don't know what
you guys think about that.
Speaker 1 (18:54):
It also just depends on whether your treasury strategy scaled
and was successful, because they're there's no one that there's
no analyst that covers BI software and covers bitcoin treasury strategies,
right Like micro strategy, it's just that it ended up dominating,
and all that people care about is that it kicks
off some cash flow. Because ninety nine point nine percent
(19:14):
of the people that are interested in micro strategy, probably
one hundred percent of the people that are interested in
the stock, it's because of bitcoin. And so if similar
is able to get through that and sort of reach
escape velocity and start to get on a program where
they constantly are issuing new instruments and preferred shares and
warrants and converts and more ATMs and et cetera. In
that business, you know, the balance sheet goes up to
(19:36):
twenty or thirty billion or something like that, then it'll
just be judged Like micro strategy, it's just at this
infant stage where it's starting out and they're still trying
to figure it out that it's judged differently. They haven't
abill to escape, we escape, no escape velocity out on
a right.
Speaker 2 (19:50):
It is that need to be communicating into the market
exactly what you're intending to do with the strategy. It's
now that there's options out there. You can't just buy
bitcoin once and then expect people to be excited about
We're in the show me phase of this strategy now
where there's a lot of companies saying that they're going
to do what micro strategy does or be the next
micro strategy. But now we're to the point where the
investors are looking at this going you have to prove
(20:12):
that to me. Now you have to show me the
conviction and you have to put out aggressive targets that
we're going to and you're starting to see that pivot.
And I think that was one of the things that
was holding similar back for a while was no one
really knew what they were doing. It felt kind of
cautious for a while, and it wasn't until recently that
they actually put out a goal to get over one
hundred thousand bitcoin, and then the market rewarded on with
(20:32):
like a twenty percent week, right, So people want to
see the leaders out facing their investors, communicating very clearly
what the intentions are and then showing the follow up
execution to tver said, get there, right. Radical transparency is
kind of the theme of these bitcoin treasury companies. For
any other company, you get information once a quarter when
they file their quarterly is their annual report. That's when
(20:55):
you're getting your information. The rest of the time you're
in the dark. Usually a muss bad news comes out.
Speaker 1 (20:59):
Yeah. Right.
Speaker 2 (21:00):
With these companies, you're watching their progress every single week,
and that's kind of becoming the expectation. When you see
Strategy out there and now Metaplanet as well, putting out
announcements what seems every single Monday, sometimes more than once
a week. That's radical transparency. You're seeing the evolution in
real time. You're watching that bitcoin rating in real time.
So if you're an investor in these preferred products, you
(21:21):
know one where you stand on the capital stack and
you know how over collateralized you are. That's different than bonds,
that's different than all these other products. The radical transparency,
but having the management team that's willing to take the
time to educate their investor and their customer on what
they're doing and how they're doing it, and then showing you.
You hear Salor talk about it a lot. The reason
(21:42):
why they have an ecosystem around them that nobody else
has with these ETF products that are out there. You know,
you get the income products with the msdys or the imsts,
you've got the leverage products. Now you've got the convertible
bond fund. The reason that they can build those around
strategy is because they're completely transparent. They tell you exactly
what they're going to do, they execute against it, they
(22:04):
don't pivot, they don't hedge, so you can trust how
they're going to react in the market to your products.
Speaker 3 (22:10):
Right, And that's exactly it's that's exactly what Sailor made
an emphasis on, is that because the market knows exactly
what they're doing, so volatility, vitality is volatility or whatever. Right,
So it's like they know that micro strategy will move
in a two times three times to what Bigwoin's prices.
And he said, he said, imagine if God came and
(22:31):
spoke to me last night and told me that Bitcoin's
going to dump tomorrow and that I should hedge my position,
and I do, and the market crashes, and I made
a bunch of money for my investors. They don't want that.
They want me to actually lose money because they need
me to be predictable as to what I'm doing. And
so what he was trying to say by that is
that any other underlying business now adds unpredictability. So will
(22:57):
I get a DOJ lawsuit, I don't know, Will I
create a new patent, I don't know. But all of
that unpredictability, all the operational risk, all the other risks
that are associated with it then start to drag it down.
So I guess that's a strong case for why a
peer play is there. And I guess to the point
that you're making, we don't know if this new category
of high growth business and a treasury business will be valued,
(23:18):
and I guess that's.
Speaker 1 (23:19):
What we'll find out. Well, let me ask you this,
Why do you think that so FI sponsors the Rams Stadium?
Speaker 3 (23:28):
Well, I would imagine so they get attention to their brand, right,
so more people would use their product.
Speaker 1 (23:33):
Okay, so that's part of it. Why else maybe right off?
I don't know, we'll try to get people to buy
the stock.
Speaker 3 (23:42):
Well, sure, of course, yeah they product yeah, yeah.
Speaker 1 (23:44):
But that actually has a material effect on the business
because if you drive interest in the stock, then you
drive liquidity in the stock, which actually drives down your
cost of capital. Right. Yeah. So I think that's the
type of mechanism that everybody actually knows about in the
mainstream that bitcoiners in retail treasury stock fans are just
starting to learn about. Yeah, that everybody else in tradfy
(24:05):
already knows about. Yeah. So there's just like this rediscovery
of things that are already known happening in the bitcoin
space right now. Yeah.
Speaker 3 (24:13):
I love it. I mean the way I look at it,
and I gave a keynote in progue and I was
basically talking about the first new financial asset in five
hundred years, and so we have this new thing and
we don't understand what it is. So it's it's sort
of like this, and it's sort of like that, and
it's sort of like that, which it is, but it's
something new, and so we're just barely starting to discover
what we can do with it. And so to your point, yeah,
(24:33):
I think that could work, and we don't know yet.
Because no one's pioneered that, and so it's exciting. It's
exciting to see what we could do with an asset.
Speaker 1 (24:40):
And it's all happening out in public because people have
to kind of show their plans because you know, that's
just kind of how it's going down. And you know,
the Bitcoin or draft as well underway. Yeah, it's everyone
we've been you know, promoting bitcoin with for the last
six seven years is getting snapped up by these companies.
And yeah, it's a fascinating time to be in the
space for sure.
Speaker 3 (25:00):
So where does it go from here? So a couple
couple things that I want to discover and see what
you guys think about this. So number one, how many
of these types of companies can the market bear? And
is this a bubble and they're going to all crash out?
Speaker 1 (25:13):
Let's talk about that one first. Well, I'll attack one thing,
which was there was a thesis out in market last
year in twenty four that there could only be one
per market and this was pushed pretty heavily, not actually
by micro Strategy, they don't sort of take sides like that,
but I think it was pushed pretty hard by Metaplanet
and bit Wise for quite a while as well, and
(25:35):
a lot of other asset managers, and I think what
was happening is that a lot of the crypto asset
managers were seeing a lot of their funds drain away
into micro strategy and related products, and they wanted to
tell people that there was only room for one so
that once you hide your mstr bag, you wouldn't take
any more assets out of their funds. And I think
(25:56):
the turning point was probably Sailor speech at the Cannor
conference in Miami last November, right before the election, which
I think was the it was the ref refining capital speech,
and it really just like it clicked with Wall Street
in a huge way. It got really way easier to
explain that just like any instrument that or any asset
(26:16):
that has a certain level of risk, you can give
somebody some returns that are lower risk reward, and then
somebody else picks up more risk and has like the
equity tranch, right, So it's just like mortgage backed securities
or collateralized debt or obligations or anything like that. And
once people kind of understood that, then I think they realized,
oh shit, there are going to be so many of
(26:36):
these and that was really I think that was really obvious,
like from that speech forward, and then the red wave
happened a few days later and like on and on,
and the big signaling to me that that showed that
this was definitely going to be a thing was really
just it was actually the Marathon convert offering that sold
out in a day and was oversubscribed for like a
billion plus or two billion dollars or something like that,
and I was like, oh, okay, like Wall Street's going
(26:58):
to snap up these instruments. And then micro Strategy did
you know, twenty billion dollars of offerings in two or
three months after that, and it was like okay, after
the races, and then what you saw is the asset
managers fall in line and flip the script on what
they were pitching, and they said, oh, there's going to
be lots of these. I want to have a Bitcoin
Treasury Company ETF that actually buys a piece of all
(27:19):
of these. And that's where you saw the previous narrative
about their only room for one per market kind of
going out the window because it's just not true.
Speaker 3 (27:26):
Even though bit Wise did spend up an ETF for them,
and they've sold like two million dollars.
Speaker 1 (27:30):
It's like terrible ETF for what for treasury companies? Yeah,
I think that's just in its infancy. Yeah, I think
that will go do just fine over time. And there's
a bunch of other people. I think it's happening more.
I think that capital is going to the private deals
because that's where the alpha is right now, is in
these these popcorn companies that are going up twenty thousand
(27:50):
percent in a few weeks and stuff like that. So
there's a lot of insider games going on right now. Yeah.
Speaker 3 (27:55):
Yeah, and you say the same thing.
Speaker 2 (27:57):
I mean, yeah, I think there's a lot of room
in the market still. I think we get oversaturated by
news sometimes and we assume that there's more of these
that's scale than they really are. Yep, you know, most
of these are still very very small. Strategy is really
the only one in the US markets of true scale.
So I think there's still plenty of room for more
companies to run that same style of a playbook here.
(28:19):
You know, is it going to be fifty or more,
I'm not sure yet. But in terms of treasury companies, yeah,
every company can be a treasury Well, every had a
long way to go every country, every.
Speaker 3 (28:28):
Company will be a treasury company at some point. That
was part of my keynote I gave in prov like
no way to survive if you're not.
Speaker 1 (28:34):
Yeah, and you have to remember, like the two biggest
launches of a few months ago, the tether spack the
twenty one deal and then Nakamoto the Bitcoin mag deal,
Like neither can't acquire yet, like their their mergers have
to close, so it looks like, you know, probably August
for Knakamoto and sometime later this year for twenty one. Yeah,
and then they can start buying bitcoin, so they're not
(28:54):
even like in the market, yeah, putting out you know,
orange dots on charts, like they're not doing the thing yet.
When they do, then it's going to get I think,
really really exciting. Yeah, it's one of the reasons that
we liked the structure of We have to decide what
to call this thing because nobody's going to pronounce it
the French way. In French, it's actually se Quon. Okay,
I think we should just call it Saquon, Yeah, like
(29:16):
like the bitcoin or football player. Yeah, we should just
call it Saquonquon. Yeah. So Saquon, this French company that's
listed on the NYSE squns if you're trading, you know,
provided that the shareholder vote goes as expected, you know,
on June thirtieth, Like we can buy bitcoin starting July one, right,
(29:36):
And that's one of the nice things about just doing
it with an existing company and not having to wait
for a d spack or wait for a merger to
go through.
Speaker 3 (29:42):
Yeah. So we've talked about the different types of companies,
three different ones. We've talked about even more hybrids that
we haven't even seen yet. From that lens, I would
say there's unlimited amounts of these companies, even the ones
that are the pure plays. Let's just even just signaling
just on that little piece. If they're making financial products
for these different marks, it's well, like like an ETF
like type deal, right, Well, how many of those do
(30:04):
we have? Thousands, thousands, thousands of them?
Speaker 1 (30:06):
Right, So I think there's unlimited room.
Speaker 3 (30:08):
But let's go to your company specifically, because yeah, honestly,
I mean, I consider you a friend, but I haven't
really heard the whole lot of it out. It's you
got to snuck up on the market here.
Speaker 1 (30:19):
So so it's deliberate, is because it's deliberate is because
of the timing of you know, you want to actually
I mean you want to see the shareholder vote actually
go through and like have it be a live deal.
So like I think that you'll see us be a
lot we'll talk a lot more about it come July one. Okay,
so you're still sort of under wrapped a little bit
of Yeah, there's not there's I've already said everything that
(30:41):
I can probably say about it. What I can tell
you is just you know, the structure of the deal
is like, you know, us putting all of our expertise
and network and experience across security, custody, investment management, knowing
all the OTC desks and liquidity providers, knowing all the
custodians and being able to evaluate them, put them through
like intense you know, due diligence questionnaires and ye you know,
(31:04):
so this is me, this is Yan, this is Jeremy,
this is Brady, this has been this is why it
is like the whole squad you know, going to work
on behalf of one of these, and there's nobody else
in the market that has our muscle for doing something
like this other than micro Strategy.
Speaker 4 (31:18):
Yeah, so I would say when you look at what
twenty one or you call the tether spack whatever whatever
those guys are doing, you kind of have an idea
of what they're probably going to do because of the
businesses that.
Speaker 1 (31:32):
They're already in.
Speaker 3 (31:33):
You look at Nakamoto and the businesses they're already in,
and so to the point that you're kind of hinting to,
we can see the kind of businesses that you're already in,
so we kind of have like a little bit of
a window as to where that could potentially go. What
I would say to a lot of people that maybe
aren't as in tune with what you're doing, Swan has
always been, at least in my mind, like a media
first company. You've always done an amazing job at that
(31:55):
education first, which has been super important. But that's definitely
gonna give you a big leg up in the.
Speaker 1 (32:01):
So you're the CIO, correct, So what are you going
to be doing?
Speaker 2 (32:05):
I'm going to be running these deals?
Speaker 1 (32:06):
Yeah.
Speaker 2 (32:07):
So yeah, I was brought in. I don't think it
was any secret in the market. You know what the
plans were as soon as I came on, because I
was really just focusing on one thing at the time.
So I was a pretty public equity analyst for micro Strategy.
Pretty early on, I was one of the founding members
of the True North groups. We d covering these for
a long time, figuring out what works, what doesn't work,
how to execute these, and what it looks like to
(32:27):
really run those well. And so when I started working
with Swan, they were one of my customers early on,
when I was doing consulting in this space, it was
just so clear that this is such a unique place
to operate something like that. Yes, because you've got an
entire company top to bottom that's built of bitcoiners, which
is very hard to find out there. Normally, in any
other company that you're talking to, you've got resistance coming
(32:48):
from one part of the organization or another. Maybe it's legal,
maybe it's whatever, but someone's pushing against this. When you
come to a place like Swan, and the entire mission
is to further Bitcoin, whether that's helping people build bitcoin
on their personal balance sheets and build their personal wealth
around it, or whether it's talking to businesses and helping
them secure their futures as well, it's got one singular
(33:10):
mission there that you're pushing towards. So for me, that
was one of the most unique setups I could possibly fight.
Heuple that with what you just said. With the media
first a pro, you quickly realize how powerful that is
when you start assisting these types of companies. There's a
lot of companies that aren't going to be able.
Speaker 1 (33:26):
To get their own name out there. Right.
Speaker 2 (33:27):
This isn't native to them. They had a core business.
That core business wasn't being on x and engaging directly
with retail investors. So they might not be ready for
that world. But we're built for that world. It's what
we do every day.
Speaker 3 (33:39):
I would say that that is super important that most
people maybe don't even realize how important that piece is
because what you saw, like with micro Strategy, or back
then with micro Strategy through the bear market, you know
a lot of people were calling for liquidation and risks
and things like that. And so if you didn't have
alignment from the top through the board, all the way
through the shareholders, then there's going to be pressure to
start selling bitcoins sure to whatever, right. And so having
(34:02):
everybody in the company aligned is what it's going to
take to weather those storms. I want to take it.
We've got a few more minutes left. I want to
jump to another topic, which is unlimited demand from the
public debt and equity markets. Hundreds and hundreds of tillions
of dollars of demand in a very scarce asset, and
(34:23):
we're already starting to see these two collide at a
massive scale. I think the treasury companies this year have
already bought twice as much supply as has been mined
by the miners. I mean, we're talking about massive scarcity.
Sailor said that he thinks that within a year we
could have twenty companies doing ten to twenty billion each
per year, So I mean we're talking about massive demand.
(34:47):
Right now, I think we have about fifty million in
bitcoin per day coming to the market, So like, what
does that mean for the price? I mean, what are
you guys thinking? Because when you think about the treasury play,
not only are you how much bitcoin can we acquire
to move the stock price, but then how much will
those assets be worth in five years or ten years?
So then you have to start kind of putting in
those future valuations. So I kind of have this theory.
(35:11):
I'm starting to work on doing some research on where
a lot of people are expecting the keguard to continue
to slide down from eighty five to sixty five where
we're at right now, to forty eventually twenty. But potentially
because of the way bitcoin actually started as a bottom
up approach, we could see the kegar start to accelerate
(35:33):
up as we go through the S curve part of
the adoption cycle. I don't know some theories. I'm sure
you have some. So what does all this massive buying
from these treasuries companies mean to you? And how you
look at it from your own treasury strategy sort of
looking forward to the forecast?
Speaker 2 (35:48):
Well, I try to keep this really simple when I
start to think about it, Right, the first thing that's
happening is the arbitrage between the scarcity of bitcoin and
then the infinite supply of theadcurrencies.
Speaker 3 (35:58):
Yep.
Speaker 1 (35:58):
So what I like to look at out.
Speaker 2 (36:00):
When I'm talking to people who are just trying to
understand what's going on here, You start with what's going
on with the US dollar? What are they signaling to you?
What are they telling you they're going to do? And
can you trust that? Well, what they're telling you they're
going to do is continue to devalue that over time, right,
and if they want prices to stay relatively stable from
an appearance perspective in the market. That means the supply
(36:20):
is going to have to be played with. You're going
to have to change that. If you want the opposite
side of that trade. You need something with the ultimate
and scarcity where it's completely inelastic to the demand for it,
and bitcoin fits that. So when you get this inflow
of demand coming for an asset where the supply is
completely anelastic to it, the only thing that can ultimately
give is the price. And I think that's what people
(36:41):
are starting to feel now as you're seeing the demand
ramping up from these treasury companies, because what they know
about these companies is that they're constant accumulators right their price,
They're not sensitive to the price at all. Right, They're
going to be buying all the time. Their goal is
to accumulate more bitcoin per share for their shareholders, So
they're going to be in the market as soon as
(37:01):
they needed capital, whether that's coming through equity sales, whether
it's through bigger transactions. And as you build up more
and more of these companies, and those companies achieve more
and more scale, you're putting this really heavy structural bid
underneath bitcoin and I think what people are starting to
look for is they know that price in all these
assets is set at the margins, and so if that
(37:22):
supply starts to shrink a little bit, volatility can actually
pick up, right because every big buy might have an
amplified effect on in every big cell might have an
amplified effect, but you might just be seeing the volatility
more to the upside. I think we're getting to that
phase now. People are starting to see that coming, and
right now it's largely coming from companies, but I think
eventually you're going to see more of the countries getting
(37:44):
involved as well, and that takes the gloves off in
this fight, right. I mean, when you see other companies
fleeing to safety of bitcoin from their own fiat currencies,
that sends a really loud signal into the market. And
that's when I think you start to see that scarcity
and that rush for people to get a hold of
this asset before everyone else gets to buy it up
before they do.
Speaker 3 (38:04):
Now, Corey, you've been selling bitcoin for many years through
Swamp Bitcoin, and you've definitely weathered some storms. For sure.
The bear market's notoriously bad for us to have to weather.
Do you think this sort of changes. I think he
said more volatile to the upside. If you think potentially
we could see where this gets to be more asymmetric
of the upside and then the draw downs are a
little bit more muted or kind of what do you
(38:25):
think in that regard.
Speaker 1 (38:26):
I think it's basically, if there is a large blow
off top and like a ripping bull market, then inevitably
the draw down will be larger. Oh really, yeah, so
I just that's just how I see it. So I
feel more volatility to both sides, not more volatility, just
like you know, corresponding volatility. Okay, So it's kind of
like if you see a bull market peak here in
(38:48):
the next you know, six to nine months, let's say,
and I actually think it'll be before the end of the
year like usual, like previous cycles, if you see that
peak at like two hundred, you have a pretty good
shot of only seeing like a forty percent draw down
after that and coming down to like one twenty. Okay,
if there's a blow off top and you see it
go from like two hundred to three hundred in the
space of like four or five weeks, like twenty seventeen, Yeah,
(39:10):
something like that. Right, and you know, we're we're kind
of like a natural peak for just early December twenty
seventeen would have been you know, ten k, right, but
it went up another ten k and then you know
a week and a half, right, right, And so it
immediately came back down to ten k and then dwindled
down another seventy percent from there to bottom out at
three k by the end of twenty eighteen. So I
(39:30):
would see it like that, like whatever that blowoff top
is will disappear very quickly and you'll give that back
and then there will be still a bear market from there.
So if you like, if you doubled from two hundred
to four hundred, you'd come back to two hundred, and
then you'd still see another forty percent down from there.
And that's seventy percent draw down from from pete to trough.
So that's just all it is, like careful for what
you wish for. The good thing is like very little
(39:52):
money ever really trades at the blowoff top. It's like
because it's so sensitive and volatile to the upside, and
it's you know, I think at the peak of seventeen
it was like one dollar in move the price thirty
bucks right or something like that. It was crazy how
sensitive it was in the frothiest stage. So it just
doesn't matter that much. And that's why I just tell
businesses and families, individuals, whatever, you know, Yeah, secure the
(40:15):
bag if you have some liquidity and establish your initial position.
But from then on, just be buying all the time.
Always have more bitcoin the day after right, one bitcoin's
one bitcoin, Always have more bitcoin. Yeah, yeah, if you can.
Speaker 3 (40:27):
Yeah, I was just thinking with the change in the
makeup of the buyer, so we've gone from you know,
still we're seeing massive retail selling into like institutional hands
and so like in twenty seventeen, you have the retail
buyer rushing in to buy the top and then they
sell the bottom at the same time.
Speaker 1 (40:40):
And so maybe you know, these institutions.
Speaker 3 (40:43):
Have these may days not to sell the bitcoin, and
so maybe that mutesa to the downside.
Speaker 1 (40:46):
Maybe I just wishful thinking. Look, I think you're going
to have to see a cycle play out once. It's
more than just micro strategy, because you know, anybody looking
at this and seeing the way that they're being marketed
basically the same way that icos were marketed a few
years ago with the same tactics and really in many
cases the same marketing vendors doing you know, Telegram groups
for stocks instead of you know, it all looks very
(41:08):
similar the way some of these are being marketed, And
so I think you have a lot of sort of
doubters and a lot of the investors that fill these
deals are you know, their merger arm funds and they're
traders and they're not knowing people, and like you don't,
you don't know how this is going to trade until
a few months after ye and maybe a year after
or two years after or something like that. So I
(41:30):
just think it's early and we don't know. So whether
you think that it started when when Meta Planet proof
that there was a second one that could do it,
or you still don't think it's proven because you want
to see Knakamoto and twenty one out there trading or
whatever it is, it's just still so fricking early, Like
we've been saying that along time. So few well it's
(41:51):
even earlier for this because so few people know anything
about bitcoin, and half of Americans don't know you can
buy a fraction of a bitcoin. I have a private
client that I spoke to yesterday, Swan private client been
buying from us for he probably about a huge bag
three or four years ago, and he was like, you know,
he's geriatric boomer or whatever. But he was just you know,
calling to see if he could buy some for his kid.
(42:11):
And he was like, and I can buy less than one,
can I can? I can? I just buy like twenty
five thousand for my you know, my grandson. And I
was like, yes, yes, you can buy a fraction of
a bitcoin. The SATs are like sense, yeah, yeah, that's great.
Speaker 3 (42:24):
So let's wrap it up. I want to ask you
have Larry Fink, the largest asset manager in the world,
saying buy bitcoins. You have Ray Dalio, the largest hedge
fund manager in the world. You have President Trump, the
leader of the free world. And then your cousin still
thinks it's like a scam coin. So that's on his
wife's side, though, that's on your wife side. That's like
(42:46):
the inbred sides, right or whatever. Not your cousin obviously,
But so what would you say to the people who
still think that this isn't going to work, And even
more specifically, now they see these treasury companies and they
think it's even more of a Ponzi than it was before.
What wild your advice be to them for where they
could go start to learn more about this on where
(43:07):
it's going.
Speaker 2 (43:07):
Well, First, I think we're overestimating how many people are
still interested in space. I mean a lot of the
people that I still talk to, they really have no
concept of what bitcoin is. They might on the fringe
here about these companies during some of those real blowoff tops,
but they never really dig into what they are. And
I think what Sailor says is really accurate, which is
people find bitcoin when they need to find Midwess. It's true,
(43:29):
until you need to find it, you're not looking for it.
Speaker 1 (43:31):
Yep.
Speaker 2 (43:32):
So there's still a learning curve. People are still blind
to what's happening with the US dollar, what's happening to
the value of their savings, and that started to get
highlighted more throughout COVID. People started paying attention a little
more when you started seeing those inflation numbers really heat up.
But now that they're reporting them, and we all know
that real inflation isn't what's getting reported, but now that
they're reporting them in a range that feels more normal,
(43:55):
I think people have backed off of that. For a while, Okay,
So I don't think it's going to be in until
we see whatever the next event is that causes interest
in what's happening with the currency again to bring retail
further into bitcoin. And even then you've got they're probably
coming in through etth exposure. That's a really low friction
way for them to get exposure. But I think that's
(44:17):
actually good at the beginning because you need to have
an easy way for people to get financial exposure to
the asset, and then they start doing the research. Once
you're invested in it, then you go down the rabbit
hole to figure out what it is you hold and
why you want to hold the actual asset itself. So
I've almost met nobody along my journey who I've spent
a lot of time with showing them either videos, walking
(44:40):
them through setting up a wallet, showing them how we
can send our value here peer to peer without anybody
else having to give us permission. I've seen no one
that said I'd rather own a paper representation of this asset.
It always ends with there's a lot of value in
sovereignty and I want to participate in that. So I
think we've still got a ways on the journey, which
means we all have a very big job to keep
(45:01):
getting the word out there, help people understand, help them
see what they're missing, help them protect the value they're
working so hard to create but finding it very difficult
to hold on to. I think that messaging in the
market and doing it from you know, a welcoming perspective,
trying to bring them in right. This is one of
those things where we've found something that everyone else hasn't yet,
(45:22):
and you want to tell them about it so badly,
but they need to be ready for it.
Speaker 1 (45:25):
Sometimes they have to want.
Speaker 2 (45:26):
If you want it to stick, they have to want
it and they.
Speaker 1 (45:28):
Have to need it.
Speaker 3 (45:29):
In marketing, we learn that it's much easier to sell
food to someone who's starving and to convince them that
they're starving. First Core, I want to throw you to
the last question. Sure, you know with Swan, I always
applauded what you guys did with really pushing self custody.
You know you've made a strong statement in the market
for years that we tell people to withdraw.
Speaker 1 (45:49):
We make it easy to withdraw.
Speaker 3 (45:51):
We don't want to hold their bitcoin, but obviously buy
in equities is not self customy, so as somebody who's
been advocating for self custody. How should somebody think about
the trade off of bitcoin versus these Should they be
not buying bitcoin and buy these treasury companies now because
they're going up faster?
Speaker 1 (46:10):
Or how how should they think about it? So I'll
come at it with with two things. So I would
say the advice that we give to our private clients
who are going to buy a lot of them are
going to do this regardless of what we say. We say,
have eighty percent of your bitcoin price exposure or your
bitcoin portfolio bitcoin related portfolio should just be regular one
x long bitcoin, and you know what, we know you're
(46:32):
going to go and do this anyway some of you, right,
just keep it to twenty percent, Okay. So that's kind
of the headline there. And then the other way that I.
Speaker 3 (46:40):
Would say, so it's not a replacement for your bitcoin
stat not at all.
Speaker 1 (46:43):
You got to have your Hoddle stack and if you
want to go and play some games, just understand that
it's a trade and the point is to have more bitcoin,
you know, so you know, good luck to you. I
think the real magic here is in tapping pools of
capital that have nothing to do with reel that could
buy self sovereign bitcoin or could buy your stock. It's
(47:04):
all of these other pools of capital that are trapped
that we talked about at the outset. Yeah, that's the
engine that makes these things big, and that's where micro
strategy focuses for good reason. But the launch phase of
getting it going obviously is helped by retail participation and
they get to buy in early, just like they got
to buy in early on bitcoin bottom up. But it
(47:24):
eventually gets taken over by institutional buyers that really need this,
and then the other way I would think about it.
For individuals, I like the concept of a sovereignty multiple,
which is basically like how much more valuable is bitcoin
in self sovereign, self custody than some other asset. And
it depends on where you live and the jurisdiction that
(47:47):
you're in and what their rules are and kind of
the rule of law, and it depends on your own
personal threat model of like boots on next sixty one
oh two attacks and things like that. But I tend
to find like in the West, you should have it
at least probably a fifty percent boost on over any
other asset. Bitcoin, bitcoin and self custody should be worth
(48:08):
at least fifty percent more than bitcoin being held for
you on an exchange or with a custodian, and it
gets worse from there for every other asset.
Speaker 3 (48:15):
Yeah good, all right, we'll wrap it up with that.
Speaker 1 (48:19):
Thanks so much, Thanks for having us on Mark
The advice that we give to our private clients who
are going to buy, A lot of them are going
to do this regardless of what we say. We say,
have eighty percent of your bitcoin price exposure.
Speaker 2 (00:09):
And I think that's what people are starting to feel
now as you're seeing the demand ramping up from these
treasury companies. They're going to be buying all the time.
Their goal is to accumulate more bitcoin for share for
their shareholders.
Speaker 3 (00:20):
We're seeing crypto like returns. We've seen companies doing five
hundred percent in the last couple of weeks, blockchain groups
up two thousand percent, and six months, I think smart
webs up like eight thousand percent. Of it is insane,
and I see these getting priced differently in the market
as well as far as the correlation of the stock
price to bitcoin's price. So how do you look at those.
Speaker 2 (00:43):
I think that's a fair way.
Speaker 3 (00:46):
Corey and Ben here we are talking about maybe the
most exciting topic in the bitcoin space right now, which
is the bitcoin treasury companies. And I know for a
lot of people in the industry, I see they're talking
about a bubble.
Speaker 1 (00:59):
They're talking about.
Speaker 3 (01:00):
Out building equity, but not any value. And I think
there's a lot of misconceptions around that space. I've also
been sort of reframing the way I look at this,
But I want to hear directly from you. Congratulations on
just launching sequence sequons sequans. We're trying to get that
figured out. About three hundred and eighty five million dollars raised,
(01:21):
one of the biggest launches that we've seen so far.
Congratulations on APPED. What do you think separates you from
some of the other big launches that we've seen in
the last month or so.
Speaker 1 (01:34):
Yeah, So i'd say, first, thanks for having us on.
I'm glad to bring my homie, Ben Workman. Yeah, excited me,
happy to be here. Yeah, chief investment officer for SWAN.
And obviously we're we're doing a lot in the space.
And I'd actually kind of like to start with essentially
what happened over the last couple of years that kind
of got us to this point. And I'd say, really,
(01:57):
if you think, you know, we both kind of got
into the space, probably maybe you even earlier than I did,
but you know, twenty seventeen, and let's call that kind
of like the crypto era was seventeen when I started
twenty fifteen.
Speaker 3 (02:07):
Then then was a trypto rabbit hole, and then in
twenty nineteen I went full bitcoin.
Speaker 1 (02:11):
Right, So if you think about call it like twenty
seventeen through about twenty twenty three, the whole thing was
basically bitcoin versus crypto and trying to overcome one hundred
billion dollars of alt coin VC money that was trying
to market coins and claim that they're better than bitcoin.
So the top of funnel was basically lying about bitcoin
so that they could sell their pump and dump tokens.
(02:33):
And what changed in the market structure was the launch
of the ETFs in early twenty twenty four January twenty
four and then the rise of these treasury companies. It
means that people now are not you know, coming in necessarily.
I mean the majority of SWAN clients now for for
Swan financial services actually access bitcoin price exposure through a
ticker in their brokerage account. First they're buying an ETF
(02:55):
or they're buying micro Strategy or one of these other
treasury stocks first, and then they go down the rabbit hole.
But they're not they're learning about bitcoin. You know, we
talk about Uncle Larry at Blackrock, Anti Abbeit Fidelity and
crazy cousin Mike over at micro Strategy, that's who they're
learning from. Yeah, and it's mostly really good information about
bitcoin that entices people to actually want to learn more.
(03:16):
And then they access your show, or they read Lynn
Alden's book or something, or find as on YouTube video
and they're kind of down in the funnel a little bit.
And so when I dovetail, like for us even to
just keep on serving our two thousand plus enterprise clients,
that's the number of enterprise accounts we have, like businesses
that buy bitcoin, and then you know one hundred thousand
plus swan clients, so many of them are looking at
(03:39):
bitcoin now through a lens of like, Okay, I feel
like Sailor's doing fifteen things, which of those are applicable
to my family office or my small and medium sized business?
And so that's how we have to talk about it.
So it basically pulled us in starting really like mid
last year Q three and definitely into Q four with
the red wave and everything. You know, we got sucked
(03:59):
into this, had to talk about it through that lens,
and then once we kind of dove into the space,
we were like, it's not a big leap for us.
To go from serving these enterprise clients and you know,
being involved in the media and education around this space,
to go whole hog and actually start doing the work
around the coin treasury companies as well. And so I mean,
(04:19):
maybe I'll pause so I don't have to talk the
whole time, but you know, Ben, if you want to
just kind of talk about getting before we get.
Speaker 3 (04:27):
I loved the point that you brought up, and I
think it's worth just bears repeediing. So sort of like
the crypto space was sort of always like an arbitrage
on the trend, right, He's always trying to leverage bitcoin
into your point, sell these other tokens so they can
go buy bitcoin.
Speaker 1 (04:40):
Yes, same of a thing, And.
Speaker 3 (04:41):
Unfortunately it was like a DDoS attack against bitcoin of
all this big money coming in and they were able
to buy tokens at a discount and then dump them
on the market.
Speaker 1 (04:50):
They liked that.
Speaker 3 (04:51):
But you know, you know, I we've talked quite a
bit about sort of these technological revolutions and these phases
of capital that comes in. And in this second phase
of capital, or you have institutional capital, they can't go
allocate a billion dollars to Shibu nuw m true or
doze coin. So we have real allocators and they're looking
for real place that need to be registered with the
(05:12):
SEC and it has to be liquidity, and I have
to be able to do options against them. And so
it's just a natural part of this evolution that we
have institutional money and it's looking for the way to
get in. It also wanted also more volatility on bitcoin,
which is what the all coins were, and so it's
sort of sucked all of that out of the space.
And that's what I've seen, is that's kind of what
(05:33):
you're saying, or.
Speaker 1 (05:34):
What you're absolutely Yeah. Yeah, we really don't sell against
like Cardano and Ethereum and Ripple anymore at all. It
just doesn't even come up.
Speaker 3 (05:41):
Yeah, Cardano. Charles Hoskins finally found the only real use
case for cardano selling it for bitcoiniling it for bitcoin.
Speaker 1 (05:49):
He finally found it cool.
Speaker 3 (05:51):
So, Ben, how long have you been studying bitcoin and
sort of involved in the space.
Speaker 2 (05:56):
So Bitcoin I found in twenty thirteen. I screwed it
up the first time, like a lot of people.
Speaker 1 (06:00):
We all find it.
Speaker 2 (06:01):
It runs up to one thousand. You sell it, you
think you're the world's best trader. Yeah, it takes you
a little bit to figure out exactly what it is
we're getting rid of. But I came back to it
pretty heavily around twenty sixteen, which really when I went
down the rabbit hole, and I was the crazy guy
in all my jobs. Yeah, trying to pin down all
those coworkers and tell them about bitcoin at lunch and
on brakes. And you know, once you start going down
(06:22):
that rabbit hole, it consumes all of your mind's energy. Yeah,
it's all you really want to think about, because you
see what a monumental shift in asset like bitcoin really is.
Speaker 1 (06:31):
Yeah.
Speaker 2 (06:32):
But it wasn't really until twenty twenty when Sailor and
Strategy came out and entered as like that first corporate
that wasn't associated with bitcoin in the beginning. They weren't
a mining company, they had no association. When they adopted it,
that was when it really clicked for me, and I thought,
this is the start. This is what we've all been
talking about for years, is we're just waiting for one
company to break that dam and make this successible to
(06:55):
everybody else.
Speaker 3 (06:56):
Was it really one company though? Or was it really Metaplanet?
Proving the strategy could be duplicated.
Speaker 2 (07:03):
Well, there's been a big evolution here for sure, but
let's not discount that Strategy had to do a lot
of work.
Speaker 1 (07:08):
To break this safe.
Speaker 3 (07:09):
But it worked for Strategy, But like til Metaplanet did it,
it was like, could someone else duplicate it?
Speaker 2 (07:16):
Yeah, the proof of being able to do it and
then being able to do it in another market was
a huge step.
Speaker 1 (07:21):
Yeah.
Speaker 2 (07:21):
I mean what Simon and Dylan are doing over there
in Japan is amazing.
Speaker 1 (07:24):
Yeah.
Speaker 2 (07:24):
They found this really niche country with a lot of
weakness in their economy, not the right type of access
to bitcoin directly. You have to get it through your
retirement accounts to get the tax advantages. They found a
really unique setup there that they could take advantage of.
But then what they did that was really good was
they took the mentorship from Sailor. I think there's a
lot of people that look at this and go, I
(07:45):
could go do it better, But there's a huge amount
of value in taking the wisdom from the people that
have been fighting the battles for a roon time, and
that's what Sailor's been doing. He's been proving the markets.
He's been showing what products are effective and which ones aren't.
He's been educating on what it means to be truly
a creative for your shareholders. Yeah, and those guys took
that ran with it.
Speaker 1 (08:05):
Yep.
Speaker 2 (08:05):
You don't have to reinvent the wheel here when someone's
gone through and done all the work to show you.
Here's how you prove the value to your shareholders. Here's
how you execute this playbook. Here's the steps you should
take as you scale this. That's a huge head start
for everyone entering the market now, and now you're seeing
a flood of them coming in. So everyone's gonna tweak
this a little bit and try to make it their own.
(08:26):
But the playbook's out there, so you've just got to
figure out how that fits into your organization.
Speaker 3 (08:30):
The best Yeah, I want to understand the playbook a
little bit better, and so let me kind of frame
it up for the audience is maybe people are just
starting to catch up. And actually, last time I had
you here, I think those are on Thanksgiving or Christmas.
Speaker 1 (08:42):
Sounds about right.
Speaker 3 (08:42):
I remember we were down here doing this one event.
I actually asked you a similar question. What's the difference
of a company that puts big one on the balance
sheet versus a treasury company. But now I see it
as three actually different strategies there. I want to ask
you about that real quick, but just for the audience listening.
Part of the reason why this is the most exciting
thing is bigcoin gets kind of boring and bear markets
(09:03):
number one, but number two, we're seeing crypto like returns,
meaning we've seen companies doing five hundred percent in the
last couple of weeks. A couple months we've seen companies
do two thousand percent. The blockchain groups up two thousand percent,
and six months we've seen companies I think smart Web's
up like eight thousand percent. I mean it is insane
(09:24):
five thousand percent and so sort of sucked the room
out of the crypto space. But back to the companies.
Last time I asked you about two, but now I
sort of see three. So I want to see how
you think about this. So there's like level one, which
is like Tesla. I put big one on the balance sheet, yep, okay,
then I have and cool Maybe game stuff is still
(09:46):
in that area.
Speaker 1 (09:46):
Who knows what they're doing.
Speaker 3 (09:47):
They bought a little bit of bitcoin, but they still
have a business, right their businesses over here. They have
money in savings their treasury.
Speaker 1 (09:52):
They put them in a bigcoin.
Speaker 3 (09:53):
Level two is like it's a bitcoin treasury company, but
there's a business and they're trying to strategy. I'd put
similar there. So they have their medical business, but then
they're also running a bitcoin treasury strategy. Nakamoto says that
they're going to run all these businesses, They're going to
fold all that in Jack Mahler's company.
Speaker 1 (10:15):
They're going to do all these financials.
Speaker 3 (10:16):
So you sort of have all these businesses with bitcoin.
And then level three you have the pure play and
the peer play is the meta planet. The peer play
is the micro strategy, where really the stock is the product.
And I see these getting priced differently in the market
as well as far as the correlation of the stock
price to bitcoins price. So how do you look at
(10:37):
those three types? Am I looking at that riote or
would you combine those last two?
Speaker 2 (10:42):
I think that's a fair way to look at what's
happening in the market right now. I mean, there's definitely
a separation in the way that these companies are trying
to operate. Some are focusing one hundred percent on.
Speaker 1 (10:52):
The treasury strategy.
Speaker 2 (10:53):
They're saying, our equity is going to become our main product,
and we're going to securitize around our balance sheet, and
we're going to find unique ways to use bitcoin as
the backing to bring products people desire, yield products, duration products,
whatever it is that you're looking at. I think that
there's still a segment of the market that we haven't
seen yet, because even when you mentioned like as similar,
they came at it from a very similar approach to
(11:15):
what Strategy did, where that core business really wasn't growing anymore.
Now we've seen recently they've made some announcements, they're trying
to launch new uses for their product, so they're trying
to grow it, but effectively the growth installed out of
the company. The equity was getting punished because of it,
so they made a pivot like what Sailor did with Strategy.
Right they were competing against Microsoft's the core business was dying.
Speaker 1 (11:34):
What I don't think.
Speaker 2 (11:35):
We've really seen yet in the market is a true
growth company that's also running an active treasury. And I
do think that that's going to bring a unique value
proposition into the market because when you actually have a
company that's scaling the core operations and growing that cash
flow aggressively alongside with utilizing the capital markets to run
an active treasury. Now you give the markets two things
(11:57):
to focus on assigning value to growing that income statement side,
you're not abandoning it and making it an afterthought, because
when you look at the way the market's valuing these companies,
they're basically ignoring the core operations now and they're just
going to multiples of the balance sheet, right, multiples of
med asset values what everyone talks about a lot. But
if you have a true growth company or one that
even hits a hypergrowth phase there, that gives you something
(12:19):
really interesting to talk about because you're now driving shareholder
value from both sides of the financials. You're still driving
it through the income statement. You're showing that aggressive growth,
you're showing that you can deliver on a core product,
and you're also making sure you're deploying the assets on
your balance sheet in a way where you're constantly building
that intrinsic value under each share. So I do think
(12:39):
that actually, over time, if someone could execute that appropriately,
and I think you have to separate the responsibilities of
those because these treasuries, those are full time jobs. You
need to be engaged in the capital markets, looking at
the terms that are happening out there, figuring out when
the perfect time is to do a transaction, to issue preferreds,
to issue converts, whatever it is you're doing. You need
hyper focus there. But I think that when you see
(13:02):
both sides of those being run effectively, you've got a
powerful combination for creating your older valuable We haven't seen
that yet, we've seen.
Speaker 3 (13:09):
And when you say growth company, you're differentiating that from
a similar or a MicroStrategy whose business is sort of
stagnant or dot saying. You're saying, we actually have a
real company that's actually growing fast, okay.
Speaker 1 (13:21):
Which we haven't seen yet. And I would say that
Similar and MicroStrategy are not in different categories other than
the size and success of Microstrategies Treasury arm because they
have similar core businesses, and in fact, microstrategies core business
is probably quite a bit larger than Similar's core business.
It's just dwarfed by the size of the Treasury operation,
which has been so successfulful.
Speaker 3 (13:41):
And I believe that's the answer you gave me last
time I asked you that question, because you said if
an Apple were to put BITC one, it's balance sheet.
The amount of bitcoin it holds in proportion to the
business is so small they can't really wag that that's
the right kind of thing. And micro strategy is sort
of being the opposite their business.
Speaker 1 (13:57):
Is it one hundred and forty.
Speaker 3 (13:58):
Million a year or something like that, And I don't
know exactly versus the whether they have fifteen billion or
whatever bitcoin, right, So it's a it's a big mismatch.
Speaker 2 (14:07):
Sixty Yeah, they're usually about a sixty million in free
cash flow a year through strategies, sixty million in free
cash le right, But there is that nuance where it
does need to be an asset like business because what
you still absolutely need to have if you're planning to
run an active treasury or using leverage against your balance sheet,
is you have to be asset like. You can have
a lot of capital expenditures that you have to be
making because you still need that sensitivity on the balance
(14:29):
sheet to the volatility of bitcoin. So it is a
special type of company that's going to fit into that slot.
Speaker 1 (14:35):
We just haven't seen that yet. This is, by the way,
this is why and you know, God bless the bitcoin minors,
and that's a whole other category. But it's the reason
that you don't see them being in the same kind
of conversation. It's because most of them are vertically integrated
and they are still trying to play this you know
call option value of maybe doing HPC as well or
moving a lot of their business towards that, and so
(14:56):
it doesn't have that sensitivity to the bitcoin price that
is driving you know, all this value in micro strategy.
And so you know, there's Marathon that actually has the
second most bitcoin, but it just can't trade that same way.
It can't offer securities and instruments the way that your
strategy can because it's vertically integrated and has all these
other assets. I do think, by the way, that a
(15:18):
miner that basically only did you know, profit share and
just did manage mining could do it because then it
would be asset light. You leave the assets on the
balance sheet of their investors and just manage the mining
for a profit share could do a treasury strategy. But
they seem all very distracted by HPC right now, which
is reasonable because that's lucrative. Yeah. The one thing I
(15:39):
would say that would be like another level further and
maybe a different category company, which I which is if
it's a growth company that actually has a reason to
be in bitcoin treasury strategy, where there's actually synergy and
where they're and I think that's what you see the
promise or the pitch in like Dangling Strike as maybe
(16:00):
folding into the tether spack at some point, or Knackomoto
buying BTC Inc. And building financial services someday or something
like that. They're leaning into that because they know that
actually will be the best possible outcome. And I think
it's why micro Strategy historically until they kind of went
peer play and realized all they actually sell is financial
instruments and that is what they sell, which I can't
(16:22):
wait to hear you kind of elaborate a little bit
more on what you were saying in the pre show.
But I think that's why you see these companies pitching
that as their future. It's because that's what micro Strategy
did too. They were like, Oh, we're going to do
d IDs, We're going to do ordinals, we're going to
do lightning, like all these different things, trying to say
that they were going to do something related to bitcoin,
because there should be synergies between having a huge balance
(16:45):
sheet and talking about bitcoin all day and being able
to leverage that bitcoin for bitcoin products and leverage that
balancedet for bitcoin products, and also leverage the fact that
you're doing marketing and media around both and it's synergistic
and nobody's done that yet. Yeah, it's so early.
Speaker 3 (17:00):
We don't know what the best models will be yet.
But the way that I was looking at it, and
sort of the way Sailors sort of framed my mind
around this, is that who is your customer? So who's
buying the product? So right now I see in the
market around all these new companies that are popping up
way smaller than what you guys have done. But these
companies are starting with two bitcoin and growing to a
hundred bitcoin like really quickly, right, and the market is
(17:22):
sort of pricing them based off of the multiple nab
the m nab as you said, and then they're looking at, okay,
well why is it the two times or six times
or eight times or ten or eighteen times, And a
lot of that has fast how faster adding that bitcoin there?
But those are all ways that we can evaluate how
fast or adding the asset to the balance sheet, and
(17:43):
then how that will reflect in the stock price. So
I'm looking at it purely from a bitcoin lens. If
I'm trying to understand similar Now I have like this
Benjamin Graham value investor, like, well, what's the underlying business
and what's the profitability and what's the EBITA and once
the cash flow projections and okay, I kind of understand
healthcare business, but it's not really my niche but I
kind of get it. Oh, but then what's this bitcoin thing?
(18:05):
And like most of these value investors, they don't know
about bitcoin, and the bitcoin guys don't know about that.
So now I have this problem where I've confused my buyer, right,
because the first thing that we wanna do is like
who's my avatar?
Speaker 1 (18:16):
Who am I selling to?
Speaker 3 (18:18):
And so when I look at people buying these things
or buying them off these multiples and these growth strategies.
But now I don't know anything about biotech, And honestly.
Speaker 1 (18:27):
True, act I went.
Speaker 3 (18:28):
I invested into a fund about two years ago that
was buying distressed biotech companies and liquidated him and I
lost half my money. So I ain't getting into that again.
I don't know anything about that, right, So I kind
of look at it like that. So maybe when you
talk about like bitcoin financial services like some of these
companies you mentioned. Maybe that's a little bit more in line,
(18:49):
but maybe if you get too far off sides, then
you don't know your customer properly. I don't know what
you guys think about that.
Speaker 1 (18:54):
It also just depends on whether your treasury strategy scaled
and was successful, because they're there's no one that there's
no analyst that covers BI software and covers bitcoin treasury strategies,
right Like micro strategy, it's just that it ended up dominating,
and all that people care about is that it kicks
off some cash flow. Because ninety nine point nine percent
(19:14):
of the people that are interested in micro strategy, probably
one hundred percent of the people that are interested in
the stock, it's because of bitcoin. And so if similar
is able to get through that and sort of reach
escape velocity and start to get on a program where
they constantly are issuing new instruments and preferred shares and
warrants and converts and more ATMs and et cetera. In
that business, you know, the balance sheet goes up to
(19:36):
twenty or thirty billion or something like that, then it'll
just be judged Like micro strategy, it's just at this
infant stage where it's starting out and they're still trying
to figure it out that it's judged differently. They haven't
abill to escape, we escape, no escape velocity out on
a right.
Speaker 2 (19:50):
It is that need to be communicating into the market
exactly what you're intending to do with the strategy. It's
now that there's options out there. You can't just buy
bitcoin once and then expect people to be excited about
We're in the show me phase of this strategy now
where there's a lot of companies saying that they're going
to do what micro strategy does or be the next
micro strategy. But now we're to the point where the
investors are looking at this going you have to prove
(20:12):
that to me. Now you have to show me the
conviction and you have to put out aggressive targets that
we're going to and you're starting to see that pivot.
And I think that was one of the things that
was holding similar back for a while was no one
really knew what they were doing. It felt kind of
cautious for a while, and it wasn't until recently that
they actually put out a goal to get over one
hundred thousand bitcoin, and then the market rewarded on with
(20:32):
like a twenty percent week, right, So people want to
see the leaders out facing their investors, communicating very clearly
what the intentions are and then showing the follow up
execution to tver said, get there, right. Radical transparency is
kind of the theme of these bitcoin treasury companies. For
any other company, you get information once a quarter when
they file their quarterly is their annual report. That's when
(20:55):
you're getting your information. The rest of the time you're
in the dark. Usually a muss bad news comes out.
Speaker 1 (20:59):
Yeah. Right.
Speaker 2 (21:00):
With these companies, you're watching their progress every single week,
and that's kind of becoming the expectation. When you see
Strategy out there and now Metaplanet as well, putting out
announcements what seems every single Monday, sometimes more than once
a week. That's radical transparency. You're seeing the evolution in
real time. You're watching that bitcoin rating in real time.
So if you're an investor in these preferred products, you
(21:21):
know one where you stand on the capital stack and
you know how over collateralized you are. That's different than bonds,
that's different than all these other products. The radical transparency,
but having the management team that's willing to take the
time to educate their investor and their customer on what
they're doing and how they're doing it, and then showing you.
You hear Salor talk about it a lot. The reason
(21:42):
why they have an ecosystem around them that nobody else
has with these ETF products that are out there. You know,
you get the income products with the msdys or the imsts,
you've got the leverage products. Now you've got the convertible
bond fund. The reason that they can build those around
strategy is because they're completely transparent. They tell you exactly
what they're going to do, they execute against it, they
(22:04):
don't pivot, they don't hedge, so you can trust how
they're going to react in the market to your products.
Speaker 3 (22:10):
Right, And that's exactly it's that's exactly what Sailor made
an emphasis on, is that because the market knows exactly
what they're doing, so volatility, vitality is volatility or whatever. Right,
So it's like they know that micro strategy will move
in a two times three times to what Bigwoin's prices.
And he said, he said, imagine if God came and
(22:31):
spoke to me last night and told me that Bitcoin's
going to dump tomorrow and that I should hedge my position,
and I do, and the market crashes, and I made
a bunch of money for my investors. They don't want that.
They want me to actually lose money because they need
me to be predictable as to what I'm doing. And
so what he was trying to say by that is
that any other underlying business now adds unpredictability. So will
(22:57):
I get a DOJ lawsuit, I don't know, Will I
create a new patent, I don't know. But all of
that unpredictability, all the operational risk, all the other risks
that are associated with it then start to drag it down.
So I guess that's a strong case for why a
peer play is there. And I guess to the point
that you're making, we don't know if this new category
of high growth business and a treasury business will be valued,
(23:18):
and I guess that's.
Speaker 1 (23:19):
What we'll find out. Well, let me ask you this,
Why do you think that so FI sponsors the Rams Stadium?
Speaker 3 (23:28):
Well, I would imagine so they get attention to their brand, right,
so more people would use their product.
Speaker 1 (23:33):
Okay, so that's part of it. Why else maybe right off?
I don't know, we'll try to get people to buy
the stock.
Speaker 3 (23:42):
Well, sure, of course, yeah they product yeah, yeah.
Speaker 1 (23:44):
But that actually has a material effect on the business
because if you drive interest in the stock, then you
drive liquidity in the stock, which actually drives down your
cost of capital. Right. Yeah. So I think that's the
type of mechanism that everybody actually knows about in the
mainstream that bitcoiners in retail treasury stock fans are just
starting to learn about. Yeah, that everybody else in tradfy
(24:05):
already knows about. Yeah. So there's just like this rediscovery
of things that are already known happening in the bitcoin
space right now. Yeah.
Speaker 3 (24:13):
I love it. I mean the way I look at it,
and I gave a keynote in progue and I was
basically talking about the first new financial asset in five
hundred years, and so we have this new thing and
we don't understand what it is. So it's it's sort
of like this, and it's sort of like that, and
it's sort of like that, which it is, but it's
something new, and so we're just barely starting to discover
what we can do with it. And so to your point, yeah,
(24:33):
I think that could work, and we don't know yet.
Because no one's pioneered that, and so it's exciting. It's
exciting to see what we could do with an asset.
Speaker 1 (24:40):
And it's all happening out in public because people have
to kind of show their plans because you know, that's
just kind of how it's going down. And you know,
the Bitcoin or draft as well underway. Yeah, it's everyone
we've been you know, promoting bitcoin with for the last
six seven years is getting snapped up by these companies.
And yeah, it's a fascinating time to be in the
space for sure.
Speaker 3 (25:00):
So where does it go from here? So a couple
couple things that I want to discover and see what
you guys think about this. So number one, how many
of these types of companies can the market bear? And
is this a bubble and they're going to all crash out?
Speaker 1 (25:13):
Let's talk about that one first. Well, I'll attack one thing,
which was there was a thesis out in market last
year in twenty four that there could only be one
per market and this was pushed pretty heavily, not actually
by micro Strategy, they don't sort of take sides like that,
but I think it was pushed pretty hard by Metaplanet
and bit Wise for quite a while as well, and
(25:35):
a lot of other asset managers, and I think what
was happening is that a lot of the crypto asset
managers were seeing a lot of their funds drain away
into micro strategy and related products, and they wanted to
tell people that there was only room for one so
that once you hide your mstr bag, you wouldn't take
any more assets out of their funds. And I think
(25:56):
the turning point was probably Sailor speech at the Cannor
conference in Miami last November, right before the election, which
I think was the it was the ref refining capital speech,
and it really just like it clicked with Wall Street
in a huge way. It got really way easier to
explain that just like any instrument that or any asset
(26:16):
that has a certain level of risk, you can give
somebody some returns that are lower risk reward, and then
somebody else picks up more risk and has like the
equity tranch, right, So it's just like mortgage backed securities
or collateralized debt or obligations or anything like that. And
once people kind of understood that, then I think they realized,
oh shit, there are going to be so many of
(26:36):
these and that was really I think that was really obvious,
like from that speech forward, and then the red wave
happened a few days later and like on and on,
and the big signaling to me that that showed that
this was definitely going to be a thing was really
just it was actually the Marathon convert offering that sold
out in a day and was oversubscribed for like a
billion plus or two billion dollars or something like that,
and I was like, oh, okay, like Wall Street's going
(26:58):
to snap up these instruments. And then micro Strategy did
you know, twenty billion dollars of offerings in two or
three months after that, and it was like okay, after
the races, and then what you saw is the asset
managers fall in line and flip the script on what
they were pitching, and they said, oh, there's going to
be lots of these. I want to have a Bitcoin
Treasury Company ETF that actually buys a piece of all
(27:19):
of these. And that's where you saw the previous narrative
about their only room for one per market kind of
going out the window because it's just not true.
Speaker 3 (27:26):
Even though bit Wise did spend up an ETF for them,
and they've sold like two million dollars.
Speaker 1 (27:30):
It's like terrible ETF for what for treasury companies? Yeah,
I think that's just in its infancy. Yeah, I think
that will go do just fine over time. And there's
a bunch of other people. I think it's happening more.
I think that capital is going to the private deals
because that's where the alpha is right now, is in
these these popcorn companies that are going up twenty thousand
(27:50):
percent in a few weeks and stuff like that. So
there's a lot of insider games going on right now. Yeah.
Speaker 3 (27:55):
Yeah, and you say the same thing.
Speaker 2 (27:57):
I mean, yeah, I think there's a lot of room
in the market still. I think we get oversaturated by
news sometimes and we assume that there's more of these
that's scale than they really are. Yep, you know, most
of these are still very very small. Strategy is really
the only one in the US markets of true scale.
So I think there's still plenty of room for more
companies to run that same style of a playbook here.
(28:19):
You know, is it going to be fifty or more,
I'm not sure yet. But in terms of treasury companies, yeah,
every company can be a treasury Well, every had a
long way to go every country, every.
Speaker 3 (28:28):
Company will be a treasury company at some point. That
was part of my keynote I gave in prov like
no way to survive if you're not.
Speaker 1 (28:34):
Yeah, and you have to remember, like the two biggest
launches of a few months ago, the tether spack the
twenty one deal and then Nakamoto the Bitcoin mag deal,
Like neither can't acquire yet, like their their mergers have
to close, so it looks like, you know, probably August
for Knakamoto and sometime later this year for twenty one. Yeah,
and then they can start buying bitcoin, so they're not
(28:54):
even like in the market, yeah, putting out you know,
orange dots on charts, like they're not doing the thing yet.
When they do, then it's going to get I think,
really really exciting. Yeah, it's one of the reasons that
we liked the structure of We have to decide what
to call this thing because nobody's going to pronounce it
the French way. In French, it's actually se Quon. Okay,
I think we should just call it Saquon, Yeah, like
(29:16):
like the bitcoin or football player. Yeah, we should just
call it Saquonquon. Yeah. So Saquon, this French company that's
listed on the NYSE squns if you're trading, you know,
provided that the shareholder vote goes as expected, you know,
on June thirtieth, Like we can buy bitcoin starting July one, right,
(29:36):
And that's one of the nice things about just doing
it with an existing company and not having to wait
for a d spack or wait for a merger to
go through.
Speaker 3 (29:42):
Yeah. So we've talked about the different types of companies,
three different ones. We've talked about even more hybrids that
we haven't even seen yet. From that lens, I would
say there's unlimited amounts of these companies, even the ones
that are the pure plays. Let's just even just signaling
just on that little piece. If they're making financial products
for these different marks, it's well, like like an ETF
like type deal, right, Well, how many of those do
(30:04):
we have? Thousands, thousands, thousands of them?
Speaker 1 (30:06):
Right, So I think there's unlimited room.
Speaker 3 (30:08):
But let's go to your company specifically, because yeah, honestly,
I mean, I consider you a friend, but I haven't
really heard the whole lot of it out. It's you
got to snuck up on the market here.
Speaker 1 (30:19):
So so it's deliberate, is because it's deliberate is because
of the timing of you know, you want to actually
I mean you want to see the shareholder vote actually
go through and like have it be a live deal.
So like I think that you'll see us be a
lot we'll talk a lot more about it come July one. Okay,
so you're still sort of under wrapped a little bit
of Yeah, there's not there's I've already said everything that
(30:41):
I can probably say about it. What I can tell
you is just you know, the structure of the deal
is like, you know, us putting all of our expertise
and network and experience across security, custody, investment management, knowing
all the OTC desks and liquidity providers, knowing all the
custodians and being able to evaluate them, put them through
like intense you know, due diligence questionnaires and ye you know,
(31:04):
so this is me, this is Yan, this is Jeremy,
this is Brady, this has been this is why it
is like the whole squad you know, going to work
on behalf of one of these, and there's nobody else
in the market that has our muscle for doing something
like this other than micro Strategy.
Speaker 4 (31:18):
Yeah, so I would say when you look at what
twenty one or you call the tether spack whatever whatever
those guys are doing, you kind of have an idea
of what they're probably going to do because of the
businesses that.
Speaker 1 (31:32):
They're already in.
Speaker 3 (31:33):
You look at Nakamoto and the businesses they're already in,
and so to the point that you're kind of hinting to,
we can see the kind of businesses that you're already in,
so we kind of have like a little bit of
a window as to where that could potentially go. What
I would say to a lot of people that maybe
aren't as in tune with what you're doing, Swan has
always been, at least in my mind, like a media
first company. You've always done an amazing job at that
(31:55):
education first, which has been super important. But that's definitely
gonna give you a big leg up in the.
Speaker 1 (32:01):
So you're the CIO, correct, So what are you going
to be doing?
Speaker 2 (32:05):
I'm going to be running these deals?
Speaker 1 (32:06):
Yeah.
Speaker 2 (32:07):
So yeah, I was brought in. I don't think it
was any secret in the market. You know what the
plans were as soon as I came on, because I
was really just focusing on one thing at the time.
So I was a pretty public equity analyst for micro Strategy.
Pretty early on, I was one of the founding members
of the True North groups. We d covering these for
a long time, figuring out what works, what doesn't work,
how to execute these, and what it looks like to
(32:27):
really run those well. And so when I started working
with Swan, they were one of my customers early on,
when I was doing consulting in this space, it was
just so clear that this is such a unique place
to operate something like that. Yes, because you've got an
entire company top to bottom that's built of bitcoiners, which
is very hard to find out there. Normally, in any
other company that you're talking to, you've got resistance coming
(32:48):
from one part of the organization or another. Maybe it's legal,
maybe it's whatever, but someone's pushing against this. When you
come to a place like Swan, and the entire mission
is to further Bitcoin, whether that's helping people build bitcoin
on their personal balance sheets and build their personal wealth
around it, or whether it's talking to businesses and helping
them secure their futures as well, it's got one singular
(33:10):
mission there that you're pushing towards. So for me, that
was one of the most unique setups I could possibly fight.
Heuple that with what you just said. With the media
first a pro, you quickly realize how powerful that is
when you start assisting these types of companies. There's a
lot of companies that aren't going to be able.
Speaker 1 (33:26):
To get their own name out there. Right.
Speaker 2 (33:27):
This isn't native to them. They had a core business.
That core business wasn't being on x and engaging directly
with retail investors. So they might not be ready for
that world. But we're built for that world. It's what
we do every day.
Speaker 3 (33:39):
I would say that that is super important that most
people maybe don't even realize how important that piece is
because what you saw, like with micro Strategy, or back
then with micro Strategy through the bear market, you know
a lot of people were calling for liquidation and risks
and things like that. And so if you didn't have
alignment from the top through the board, all the way
through the shareholders, then there's going to be pressure to
start selling bitcoins sure to whatever, right. And so having
(34:02):
everybody in the company aligned is what it's going to
take to weather those storms. I want to take it.
We've got a few more minutes left. I want to
jump to another topic, which is unlimited demand from the
public debt and equity markets. Hundreds and hundreds of tillions
of dollars of demand in a very scarce asset, and
(34:23):
we're already starting to see these two collide at a
massive scale. I think the treasury companies this year have
already bought twice as much supply as has been mined
by the miners. I mean, we're talking about massive scarcity.
Sailor said that he thinks that within a year we
could have twenty companies doing ten to twenty billion each
per year, So I mean we're talking about massive demand.
(34:47):
Right now, I think we have about fifty million in
bitcoin per day coming to the market, So like, what
does that mean for the price? I mean, what are
you guys thinking? Because when you think about the treasury play,
not only are you how much bitcoin can we acquire
to move the stock price, but then how much will
those assets be worth in five years or ten years?
So then you have to start kind of putting in
those future valuations. So I kind of have this theory.
(35:11):
I'm starting to work on doing some research on where
a lot of people are expecting the keguard to continue
to slide down from eighty five to sixty five where
we're at right now, to forty eventually twenty. But potentially
because of the way bitcoin actually started as a bottom
up approach, we could see the kegar start to accelerate
(35:33):
up as we go through the S curve part of
the adoption cycle. I don't know some theories. I'm sure
you have some. So what does all this massive buying
from these treasuries companies mean to you? And how you
look at it from your own treasury strategy sort of
looking forward to the forecast?
Speaker 2 (35:48):
Well, I try to keep this really simple when I
start to think about it, Right, the first thing that's
happening is the arbitrage between the scarcity of bitcoin and
then the infinite supply of theadcurrencies.
Speaker 3 (35:58):
Yep.
Speaker 1 (35:58):
So what I like to look at out.
Speaker 2 (36:00):
When I'm talking to people who are just trying to
understand what's going on here, You start with what's going
on with the US dollar? What are they signaling to you?
What are they telling you they're going to do? And
can you trust that? Well, what they're telling you they're
going to do is continue to devalue that over time, right,
and if they want prices to stay relatively stable from
an appearance perspective in the market. That means the supply
(36:20):
is going to have to be played with. You're going
to have to change that. If you want the opposite
side of that trade. You need something with the ultimate
and scarcity where it's completely inelastic to the demand for it,
and bitcoin fits that. So when you get this inflow
of demand coming for an asset where the supply is
completely anelastic to it, the only thing that can ultimately
give is the price. And I think that's what people
(36:41):
are starting to feel now as you're seeing the demand
ramping up from these treasury companies, because what they know
about these companies is that they're constant accumulators right their price,
They're not sensitive to the price at all. Right, They're
going to be buying all the time. Their goal is
to accumulate more bitcoin per share for their shareholders, So
they're going to be in the market as soon as
(37:01):
they needed capital, whether that's coming through equity sales, whether
it's through bigger transactions. And as you build up more
and more of these companies, and those companies achieve more
and more scale, you're putting this really heavy structural bid
underneath bitcoin and I think what people are starting to
look for is they know that price in all these
assets is set at the margins, and so if that
(37:22):
supply starts to shrink a little bit, volatility can actually
pick up, right because every big buy might have an
amplified effect on in every big cell might have an
amplified effect, but you might just be seeing the volatility
more to the upside. I think we're getting to that
phase now. People are starting to see that coming, and
right now it's largely coming from companies, but I think
eventually you're going to see more of the countries getting
(37:44):
involved as well, and that takes the gloves off in
this fight, right. I mean, when you see other companies
fleeing to safety of bitcoin from their own fiat currencies,
that sends a really loud signal into the market. And
that's when I think you start to see that scarcity
and that rush for people to get a hold of
this asset before everyone else gets to buy it up
before they do.
Speaker 3 (38:04):
Now, Corey, you've been selling bitcoin for many years through
Swamp Bitcoin, and you've definitely weathered some storms. For sure.
The bear market's notoriously bad for us to have to weather.
Do you think this sort of changes. I think he
said more volatile to the upside. If you think potentially
we could see where this gets to be more asymmetric
of the upside and then the draw downs are a
little bit more muted or kind of what do you
(38:25):
think in that regard.
Speaker 1 (38:26):
I think it's basically, if there is a large blow
off top and like a ripping bull market, then inevitably
the draw down will be larger. Oh really, yeah, so
I just that's just how I see it. So I
feel more volatility to both sides, not more volatility, just
like you know, corresponding volatility. Okay, So it's kind of
like if you see a bull market peak here in
(38:48):
the next you know, six to nine months, let's say,
and I actually think it'll be before the end of the
year like usual, like previous cycles, if you see that
peak at like two hundred, you have a pretty good
shot of only seeing like a forty percent draw down
after that and coming down to like one twenty. Okay,
if there's a blow off top and you see it
go from like two hundred to three hundred in the
space of like four or five weeks, like twenty seventeen, Yeah,
(39:10):
something like that. Right, and you know, we're we're kind
of like a natural peak for just early December twenty
seventeen would have been you know, ten k, right, but
it went up another ten k and then you know
a week and a half, right, right, And so it
immediately came back down to ten k and then dwindled
down another seventy percent from there to bottom out at
three k by the end of twenty eighteen. So I
(39:30):
would see it like that, like whatever that blowoff top
is will disappear very quickly and you'll give that back
and then there will be still a bear market from there.
So if you like, if you doubled from two hundred
to four hundred, you'd come back to two hundred, and
then you'd still see another forty percent down from there.
And that's seventy percent draw down from from pete to trough.
So that's just all it is, like careful for what
you wish for. The good thing is like very little
(39:52):
money ever really trades at the blowoff top. It's like
because it's so sensitive and volatile to the upside, and
it's you know, I think at the peak of seventeen
it was like one dollar in move the price thirty
bucks right or something like that. It was crazy how
sensitive it was in the frothiest stage. So it just
doesn't matter that much. And that's why I just tell
businesses and families, individuals, whatever, you know, Yeah, secure the
(40:15):
bag if you have some liquidity and establish your initial position.
But from then on, just be buying all the time.
Always have more bitcoin the day after right, one bitcoin's
one bitcoin, Always have more bitcoin. Yeah, yeah, if you can.
Speaker 3 (40:27):
Yeah, I was just thinking with the change in the
makeup of the buyer, so we've gone from you know,
still we're seeing massive retail selling into like institutional hands
and so like in twenty seventeen, you have the retail
buyer rushing in to buy the top and then they
sell the bottom at the same time.
Speaker 1 (40:40):
And so maybe you know, these institutions.
Speaker 3 (40:43):
Have these may days not to sell the bitcoin, and
so maybe that mutesa to the downside.
Speaker 1 (40:46):
Maybe I just wishful thinking. Look, I think you're going
to have to see a cycle play out once. It's
more than just micro strategy, because you know, anybody looking
at this and seeing the way that they're being marketed
basically the same way that icos were marketed a few
years ago with the same tactics and really in many
cases the same marketing vendors doing you know, Telegram groups
for stocks instead of you know, it all looks very
(41:08):
similar the way some of these are being marketed, And
so I think you have a lot of sort of
doubters and a lot of the investors that fill these
deals are you know, their merger arm funds and they're
traders and they're not knowing people, and like you don't,
you don't know how this is going to trade until
a few months after ye and maybe a year after
or two years after or something like that. So I
(41:30):
just think it's early and we don't know. So whether
you think that it started when when Meta Planet proof
that there was a second one that could do it,
or you still don't think it's proven because you want
to see Knakamoto and twenty one out there trading or
whatever it is, it's just still so fricking early, Like
we've been saying that along time. So few well it's
(41:51):
even earlier for this because so few people know anything
about bitcoin, and half of Americans don't know you can
buy a fraction of a bitcoin. I have a private
client that I spoke to yesterday, Swan private client been
buying from us for he probably about a huge bag
three or four years ago, and he was like, you know,
he's geriatric boomer or whatever. But he was just you know,
calling to see if he could buy some for his kid.
(42:11):
And he was like, and I can buy less than one,
can I can? I can? I just buy like twenty
five thousand for my you know, my grandson. And I
was like, yes, yes, you can buy a fraction of
a bitcoin. The SATs are like sense, yeah, yeah, that's great.
Speaker 3 (42:24):
So let's wrap it up. I want to ask you
have Larry Fink, the largest asset manager in the world,
saying buy bitcoins. You have Ray Dalio, the largest hedge
fund manager in the world. You have President Trump, the
leader of the free world. And then your cousin still
thinks it's like a scam coin. So that's on his
wife's side, though, that's on your wife side. That's like
(42:46):
the inbred sides, right or whatever. Not your cousin obviously,
But so what would you say to the people who
still think that this isn't going to work, And even
more specifically, now they see these treasury companies and they
think it's even more of a Ponzi than it was before.
What wild your advice be to them for where they
could go start to learn more about this on where
(43:07):
it's going.
Speaker 2 (43:07):
Well, First, I think we're overestimating how many people are
still interested in space. I mean a lot of the
people that I still talk to, they really have no
concept of what bitcoin is. They might on the fringe
here about these companies during some of those real blowoff tops,
but they never really dig into what they are. And
I think what Sailor says is really accurate, which is
people find bitcoin when they need to find Midwess. It's true,
(43:29):
until you need to find it, you're not looking for it.
Speaker 1 (43:31):
Yep.
Speaker 2 (43:32):
So there's still a learning curve. People are still blind
to what's happening with the US dollar, what's happening to
the value of their savings, and that started to get
highlighted more throughout COVID. People started paying attention a little
more when you started seeing those inflation numbers really heat up.
But now that they're reporting them, and we all know
that real inflation isn't what's getting reported, but now that
they're reporting them in a range that feels more normal,
(43:55):
I think people have backed off of that. For a while, Okay,
So I don't think it's going to be in until
we see whatever the next event is that causes interest
in what's happening with the currency again to bring retail
further into bitcoin. And even then you've got they're probably
coming in through etth exposure. That's a really low friction
way for them to get exposure. But I think that's
(44:17):
actually good at the beginning because you need to have
an easy way for people to get financial exposure to
the asset, and then they start doing the research. Once
you're invested in it, then you go down the rabbit
hole to figure out what it is you hold and
why you want to hold the actual asset itself. So
I've almost met nobody along my journey who I've spent
a lot of time with showing them either videos, walking
(44:40):
them through setting up a wallet, showing them how we
can send our value here peer to peer without anybody
else having to give us permission. I've seen no one
that said I'd rather own a paper representation of this asset.
It always ends with there's a lot of value in
sovereignty and I want to participate in that. So I
think we've still got a ways on the journey, which
means we all have a very big job to keep
(45:01):
getting the word out there, help people understand, help them
see what they're missing, help them protect the value they're
working so hard to create but finding it very difficult
to hold on to. I think that messaging in the
market and doing it from you know, a welcoming perspective,
trying to bring them in right. This is one of
those things where we've found something that everyone else hasn't yet,
(45:22):
and you want to tell them about it so badly,
but they need to be ready for it.
Speaker 1 (45:25):
Sometimes they have to want.
Speaker 2 (45:26):
If you want it to stick, they have to want
it and they.
Speaker 1 (45:28):
Have to need it.
Speaker 3 (45:29):
In marketing, we learn that it's much easier to sell
food to someone who's starving and to convince them that
they're starving. First Core, I want to throw you to
the last question. Sure, you know with Swan, I always
applauded what you guys did with really pushing self custody.
You know you've made a strong statement in the market
for years that we tell people to withdraw.
Speaker 1 (45:49):
We make it easy to withdraw.
Speaker 3 (45:51):
We don't want to hold their bitcoin, but obviously buy
in equities is not self customy, so as somebody who's
been advocating for self custody. How should somebody think about
the trade off of bitcoin versus these Should they be
not buying bitcoin and buy these treasury companies now because
they're going up faster?
Speaker 1 (46:10):
Or how how should they think about it? So I'll
come at it with with two things. So I would
say the advice that we give to our private clients
who are going to buy a lot of them are
going to do this regardless of what we say. We say,
have eighty percent of your bitcoin price exposure or your
bitcoin portfolio bitcoin related portfolio should just be regular one
x long bitcoin, and you know what, we know you're
(46:32):
going to go and do this anyway some of you, right,
just keep it to twenty percent, Okay. So that's kind
of the headline there. And then the other way that I.
Speaker 3 (46:40):
Would say, so it's not a replacement for your bitcoin
stat not at all.
Speaker 1 (46:43):
You got to have your Hoddle stack and if you
want to go and play some games, just understand that
it's a trade and the point is to have more bitcoin,
you know, so you know, good luck to you. I
think the real magic here is in tapping pools of
capital that have nothing to do with reel that could
buy self sovereign bitcoin or could buy your stock. It's
(47:04):
all of these other pools of capital that are trapped
that we talked about at the outset. Yeah, that's the
engine that makes these things big, and that's where micro
strategy focuses for good reason. But the launch phase of
getting it going obviously is helped by retail participation and
they get to buy in early, just like they got
to buy in early on bitcoin bottom up. But it
(47:24):
eventually gets taken over by institutional buyers that really need this,
and then the other way I would think about it.
For individuals, I like the concept of a sovereignty multiple,
which is basically like how much more valuable is bitcoin
in self sovereign, self custody than some other asset. And
it depends on where you live and the jurisdiction that
(47:47):
you're in and what their rules are and kind of
the rule of law, and it depends on your own
personal threat model of like boots on next sixty one
oh two attacks and things like that. But I tend
to find like in the West, you should have it
at least probably a fifty percent boost on over any
other asset. Bitcoin, bitcoin and self custody should be worth
(48:08):
at least fifty percent more than bitcoin being held for
you on an exchange or with a custodian, and it
gets worse from there for every other asset.
Speaker 3 (48:15):
Yeah good, all right, we'll wrap it up with that.
Speaker 1 (48:19):
Thanks so much, Thanks for having us on Mark
Host
Mark Moss
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