The $58 trillion debt spiral will force Bitcoin to explode faster than you think!!! | EP 1589

0:00Scott Bessent was forced to intervene in the bond markets again with a new program, triple the size, but it did nothing. Actually, it did the opposite of nothing. It's not looking good. So everyone is now wondering what is coming next? What is going on in the bond market? And really, what does it say about the macro situation? So let me start with some things that happened a few days ago, which are really setting the scene for what we're seeing currently take place. So as I've been telling you guys a while ago, it was about two weeks ago, we saw Scott Bessent do the yen intervention. We sold European bonds for, um, to buy Japanese Yens. That was an attempt to protect the Japanese bond market because if the Japanese bond market broke, you know, breaks down, it means trouble for everyone else. Well, fast forward to a couple of days ago, and it looks like that literally didn't do

1:03anything. It looks as if, and this is coming from Bloomberg headline that Japan likely eventually sold US treasuries to fund record yen intervention. Now at the same time, we saw a few days later that China is also likely selling US treasuries. So there is a interesting caveat here because Xi Jinping is going to meet President Trump in about two weeks. So there seems to be this kind of rhetoric going around that Trump and Xi Jinping have a really good relationship. They're going to work together. There's even been rumors that the US and China are going to partner in some form, but we don't have very much information on that. But what we do know for a fact is there is most likely a lot of bonds, US treasuries being dumped on the market right now. And how do we know that for a fact? Well, this morning guys, bond yields are absolutely ripping. And that is on the back of Scott Bessence now triple the size of bond buybacks.

2:08You see here treasury is now expected to buy back 18.5 billion of their own debt this week. This weekly buybacks in history. And if you recall, it was supposedly only going to be a $2 billion treasury buyback. And now it's at 18 billion. In fact, it went from $2 billion to $6 billion. And then they shortly followed up. Well, like, okay, we're going to buy $6 billion of long term dated bonds, basically with short term dated bonds. And then literally the following day, they bought another $12.5 billion of bonds. So what does all this mean? Well, it looks like there is serious trouble in the bond market and Scott Bessent is trying to quell the chaos. And we got some interesting sound bites from Scott Bessent the other day that I think is

3:08why we're seeing the carnage currently take place today. All right. So this one is from the Bloomberg terminal. This one is actually interesting. This is something that we say all the time here, maybe not all Bitcoiners, but we usually paint this in the idea of like, look, hey, and actually maybe I've been one of the people that's been kind of pushing back on this theory. Obviously a lot of Bitcoiners have this idea of the fiat dollar melting down that we are in a fiat apocalypse right now. And the dollar is going to hyper inflate. It's going to lose its world reserve currency. But a lot of people don't really account for as many people called the dollar milkshake theory that yes, the dollar is a fiat currency. And yes, it is the world reserve currency. But it's still the, am I, you know, it's still the shiniest herd in the toilet. Okay. There is going to eventually be a point where the world wakes up to hard money. It starts to move away from fiat money or the dollar.

4:11And the big question is what will the world move to? Will it move to a hard money standard? There's a lot of gold bugs out there that say, oh, we're going to go back to a gold standard. We will start to really peg the global currency to gold. And China's actually been essentially making that bet. They've been selling treasuries and they've been sacking gold and unprecedented rate. So China's making the bet that, hey, the world's going to go back to a gold standard. There is a bit of reminiscence to China doing this, you know, a little while ago, like, you know, decades ago, where they instead of going to fiat, they went to silver. And the world didn't move from gold to silver. It actually moved from gold to fiat. It almost feels as if history is not repeating, but it's often rhyming. So at this moment, China is obviously at least making the bet that they're going to go to gold. While the US, what are we doing? We're embracing stable coins. The US is looking at the landscape and they're like, yeah, we're not going to go back to

5:13gold. There's no way and there's no, there's no possibility of us moving back to a gold standard. So they're essentially betting that, hey, we could use stable coins to dollarize the world. And really being lenient about that kind of prediction, it is the US embracing quote digital assets. It is this maybe intermediary move where the US is essentially making the bet that, yeah, we're going to go not only to stable coins, but eventually try to embrace Bitcoin. And as we've been covering, this is why there's been such a huge push on the clarity or push towards the clarity act. But also why we're seeing so much pushback on the clarity act, it is because of stable coins. It does look like we are in this place right now where China, obviously the second biggest financial center of the world, they got the second largest GDP in the world. They're making the bet in gold, the US is making the bet in digital assets or digital money, digital currencies. However, you want to really frame it.

6:15And at the same time, so there's that monetary race going on. And at the same time, we're seeing global markets right now, global bond markets are gripping higher. It looks like the Yen intervention that we just saw two weeks ago and what we just saw recently with the US Treasury buybacks, the traders out there are calling Scott Besson's bluff. But anyway, before I get into that, let's read this little blur from Bloomberg, the Bloomberg terminal. So Scott Besson, it's Treasury Secretary said his move last month to expand a buyback program for order US government securities was aimed at quelling a quote fever in the bond market. My job is to try to push things back towards equilibrium going further. I don't believe that I can change the equilibrium price, but nothing's ever in equilibrium. Besson was speaking on the eve of the first scheduled buyback operation of longer dated securities since his department last month announced a ramp up of that program that followed a rise in 30 year yields to the highest level since 2007 going further quote, there was

7:16like this fever that was building. And having been in the financial markets like when you're speculating, you want to speed things up. I need to do the valley girl accent. Anyway, Besson also rejected the idea that treasuries have been dropping in recent weeks. And here, here is I think the most interesting tell this, this I think does give us a lot of signal of where we currently stand in terms of the quote, fiat apocalypse or as Kaiser's always been saying Max Kaiser, the bond apocalypse. Besson also rejected the idea that treasuries have been dropping in recent weeks due to concerns about the scale of US borrowing. If that were true, treasuries would be under performing German securities. And he added that's not what's happening. Quote, if everyone was worried about the credit of the US, you would sell US bonds and buy German bonds. And it's actually the opposite quote, where the best performing bonds.

8:16In the world. So what is that telling me as a big corner and further, what is that telling me in the context of the quote, fiat apocalypse or the impending doom of the US dollar? It's really put simply the dollar milkshake theory, which is an idea that yes, eventually fiat will crumble. It's pretty much set in stone. Like in Bitcoin, we know the monetary policy of Bitcoin up until 2140. It's hard cap to 21 million. We know also in that same context, the end game for fiat currencies. And it always goes the same. It will always end in printing a bunch of money. But what is interesting about this little segment that Scott Besson said, it does tell us a lot about this idea of like, where do we currently stand? Are we in a bi metal era? Will the US dollar decline? Will it lose its world reserve currency? And I honestly, I think Scott Besson is saying exactly what the dollar milkshake theory

9:19is saying, which is essentially yes, the dollar will eventually collapse. But it's the best credit in the world. Essentially saying the dollar will most likely retain its power. It will probably in fact increase in its purchasing power on the, you know, Dixie chart. The dollar will get stronger because other fiat currencies will start to collapse. And further, a lot of those countries are not necessarily indebted to the dollar, but they need the dollar. They are surviving on the dollar. They are using and transacting the dollar. So therefore, the demand for dollars will increase, which will make the dollar stronger. But instead of what everyone is thinking is going to happen, which is a decline or crumbling of the dollar, I think what we will see will be more of a crack up boom, where the dollar gets so strong that that starts causing problems in the global financial markets.

10:20Scott Besson literally said that he's like, yeah, the dollar is the best performing thing in the market. The dollar is the best fiat currency in the world right now. That's what Scott Besson is saying. So if your Bitcoin thesis is, oh my God, the dollar is going to be destroyed. I think you have it backwards. I don't think that's the best thesis. The dollar will in fact get stronger. That is the dollar milkshake theory. That local other currencies besides the dollar will add demand to the dollar. Therefore, the dollar will increase. The dollar will get stronger. But that also causes problems in the global macro economy. It's not a, oh, if the dollar gets stronger, everything works itself out. It's like, no, look, we know what the Trump administration wants to do. We know what Scott Besson wants to do, which is what they've been saying for a long time. They want bond yields low. And to do that, they do have to in fact, decrease the strength of the dollar.

11:26Well, what are we seeing happening in the markets right now? The dollar is getting stronger. Getting yields are going up because no one wants to hold bonds. The safe, no, no, no risk of bat right now, which has for the longest time been treasuries. It's no longer looking like a safe bat. So everyone is starting to shop for their money and find other places to store their well. Obviously, we think Bitcoin is going to be one of the winners of this. Obviously, as we've seen around the world, there are people that are going into gold. But Scott Besson, I think just dropped a huge hint. He's like, the dollar is going to be around for a long time. Every other fiat currency is going to collapse. The dollar will be the last one standing. And they're going to proliferate the dollar dominance around the world via dollar peg stablecoins. That's what I heard when he said that now to really explain what we're seeing happen in the bond markets this morning.

12:27This is more like that statement was more of like a broader view of, you know, like what do we say 30,000 view of what's going on in the global economy? But this next one is I think where the crux of the problem is going on right now. Scott Besson signaled to the markets like, Hey, you want to bet against me? Good luck. Well, it looks like the bond vigilantes are betting against him as we speak. So here we got guy, guy, your capital. It goes incredible quote by Besson. And it goes treasury secretary Scott Besson challenged traders to counter his efforts to strengthen Japan's currency. Touting that when he makes market calls nowadays, he's effectively doing so with insider information. Quote, I am the house now. So when we intervene with the Japanese, yeah, and I have pretty good insight into what the Japanese, what the bank of Japan is going to do, what Japanese policymakers are going to do. And Scott Besson added and you can bet against me if you want.

13:28This was two days ago. He basically said like, Hey, I am the house. I know what's going on. You want to bet against what I'm doing? Well, pile up your shorts are going to get wrecked. Well, in fact, the opposite happened this morning, okay? The opposite is going on. Bond yields are ripping right now. And here's James lavish. Where is it? Here's James lavish kind of showing it. This is yesterday, but he goes, good morning. Let's check in on global yields of 10 year government bonds. Shall we? Oh, and you can see he circled the range here, the price. So average, you can see in like, what is this orange? I think it's orange. And essentially, every global bond market is above average right now, which means the yields are higher than expected because people are looking for returns because they don't want to actually hold these yields and to incentivize people to sell the yield or rather to hold the

14:30yields long term, you need to have some good returns. And so the higher the yields go, the more it's telling you that people are dumping those as a toxic asset. Now, I have brought up this very interesting account on Twitter, which is allegedly supposedly and it's actually been pretty spot on a bank of Japan government insider or a bank of Japan insider. And he responded directly to Scott Besson's, I am the house now tweet or quote in a tweet yesterday, I believe. So check out this tweet here. And remember what he said in the past, he essentially said, we know what the what the bank of Japan is going to do. They want to onshore capital. They're going to write they're going to hike rates. They essentially are stuck and they can't necessarily do anything drastic in their bond market. They only have a choice.

15:30So either hike rates, hike rates, which is what they're doing or they let the Japanese yen collapse. If they let the Japanese yen collapse, then the Japanese people are cucked. And that is not politically favorable. Well, Yodo, this account here again, allegedly and seemingly a bank of Japan insider, it's Yodo, tons of Yodo Kansaki real. And he goes, they say the house always wins this time. Japan isn't just betting against the house. Japan is taking down the entire house. This time the entire system is getting margin called. That one's yesterday. Pretty stark warning coming from a supposed bank of Japan insider. Obviously, directly opposing what Scott Besson said that he is the house now. And he's like, yeah, well, Japan's just going to bring down the entire house.

16:32And this goes into what I've been saying. Look, I know Japan is like it almost seems like an esoteric topic. It almost seems like a niche topic, but Japan is 100% intertwined into the global economy. You basically take free money from Japan and then you invest that into every other economy. That's what the world's been doing for about 30 years plus now we're getting to a point where that cheap money is no longer cheap. And Japan is raising interest rates. So what the traditional financial investor has been looking at of a safe bet is no longer a safe bet. What all of this is telling me and further anyone else that's watching the macro markets right now. Is there is a problem in the bond market as the old idiom goes, you know, whether smoke, there's fire. Well, I think at this point, you know, Scott Besson and Trump and the Trump administration. And even the ECB and the EU, they are trying to downplay the fire going on.

17:37And essentially, you're saying, oh, no, there's smoke, but we can fix it. I think at this point, we can all pretty much agree like there's smoke in the bond market. The US Treasury blinked on this idea. They essentially said, yeah, we're going to intervene in this and we'll do whatever we have to do. And now their actions have proven that they're like, oh, yeah, the intervention we did wasn't big enough. So now we have to do it even bigger than we imagine because nothing is happening. And to kind of double down on this idea, she has the Kobayashi letter. I love this. So we have a chart here and it goes, what is this days? So this is about a month. So in August, I believe it's 20th, 21st, the US Treasury announced it's at least doubling bond bybacks. Bond yields went down. And then a couple of days later, the 10 year note yield initially falls. And since then, in the beginning of or the end of last month, the beginning of this month, yields rise above pre-announcement levels. I think I talked about this on the show. And now what are we seeing now?

18:39Well, US Treasury triples buy back to $6 billion and 10 year yields are higher than they were when the US Treasury announced that they were going to intervene. So good little break up or a breakdown. Kobayashi letter goes, you can't make this up. The US Treasury just announced it's tripling long term buybacks to $6 billion and yields still rallied on the news. That means the US Treasury went from doubling to at least doubling to tripling long term bond bybacks and yields are still rising. This puts the 10 year note yield above 4.85% for the first time since November 2023, up 15 basis points from pre-announcement levels. The bond market is quite literally fighting the US Treasury as the Iran War continues with the 10 year note yield nearing a 100 basis point move since the war began. Without an end to the Iran War, we are on track to see the 10 year note yield above 5% by next week. American consumers, home buyers and borrowers are in for a rude awakening.

19:43And that is the crux of this whole conversation. Oh, sorry, I didn't pull it up. My bad guys. That's the crux of this whole conversation going on right now. If the US Treasury is intervening in the bond market and it looks as if they have lost control or are losing control of the bond market, what does this mean for not only the American consumer, but the global consumer? It means everything is going to get more expensive. And Besson is learning a very important lesson that once you show the market that you are willing to adjust policy when they move against you, they will always demand more. That's what we're seeing happen this morning. US Treasury announced, hey, we're going to at least double our buyback. Today it's tripled. And what does the bond yield do? They win up. It's not a good sign when the US Treasury is intervening in the US bond market.

20:48And no, no matter what they do, the bond yields continue to go up. Essentially, no matter what the policy is right now, the bond vigilantes out there or even bond holders are not feeling comfortable holding that asset. They're like, I don't care what you're doing. We're going to dump these. I do not want to be holding these long term. Now what does this mean for, of course, the macro picture? Well, there are alternatives now. And yes, Bitcoin is down a little bit today. Before I started the show is I like 77. I'm still convinced it's like a Wicoff accumulation. Unless we break under 75, I'm still convinced that we are on the uptrend right now. But what does this show for Bitcoin in the macro picture? As I've been saying, since the start of the war in Iran, Bitcoin has fundamentally entered the mainstream conversation as a macro asset.

21:48So even though we're not seeing a direct result of Bitcoin going up in this news today, we are seeing that people are at the very least considering Bitcoin as an alternative to holding treasuries. Now, it's not going to happen all at once. It's obviously happening in a very slow moving train right now. But there's only really two options for many people, especially when you consider, and I wasn't even, I was kind of just talking about this in the vacuum. But when you consider that equities are down this one, you know, S&P 500, NASDAQ, Dow Jones, they're all down. We're seeing record buying of long dated treasuries. We're seeing also, did you guys catch the Trump R&C last night? Trump is basically buying off voters and saying, hey, if the Republicans win the midterms, we will pay back or we will pay every American $5,000.

22:50That's about triple the size of the 2020 stimulus, which would amount to about $1.3 trillion. It's all pointing towards we will see the what Larry LaParte has been saying forever, the big print on the horizon. You know, we're really getting that late empire vibes here. You know, the minds of the Roman empire vibes here where like, I'm just going to pay off voters. We're going to loot the coffers. Doesn't really matter. We'll just try to print our way out of this. We will just debase the currency our way out of this or put another way. We will grow our way out of this. But really, it's just debase the currency. If this does happen and Trump is, I don't know, actually not just joking and saying that, yeah, we're going to, you know, have a $1.3 trillion stimulus. Where's that money going to come from? Maybe it's going to be the same thing we saw in 2020 where they just print the money, give it to everyone else, be like, hey, you're happy. You know, you got a little extra money in your pocket.

23:52And then what have we seen since 2020 inflation is out of control. And now we're talking about potentially three times that size. If the Republicans win the midterms, where is the money coming from? Oh yeah, what's the saying? We always say, why do you work for a money that another man can print for free? It's literally going to come out of thin air guys. The big print is here essentially. It's not QE QE. Yes, essentially, you know, like there, you could look at the bond buyback strategy as them taking long term debt out of the system. But what are they doing to buy that long term debt? They're issuing short term debt. So either way, it is essentially money printing. What does this mean for everyone that isn't holding Bitcoin or rather what does this mean for everyone? It means they are debasing the currency. This is the only way they can grow out of this. I know when I talk about the bond market, it's like, it's not that sexy. It's kind of like, I know I macro nerd out on you guys.

24:55But what we are seeing in the treasury markets right now, what we are seeing in the global conversation, the macro conversation, as I've been saying, is a perfect storm for Bitcoin. We are seeing a lot of people suddenly start to maybe not fully wake up to Bitcoin as something they need to hold, but they're at the beginning stages, which is like acknowledging that there is a problem. That's what all of this is saying. There is a problem. Are we in the 2007 vibes right now of a great financial crisis? I don't know if I'd go that far, but we are starting to see there is an issue. And how are they going to solve this? Well, they really can't solve it at all. There's only one way to solve this problem. It is to print an obscene amount of money. Again, scientific term, print a shitload of money. This is what the guys look again.

25:57I don't mean to reiterate myself so quickly, but I know we're a Bitcoin show. And recently I have been talking a lot more macro because of the macro landscape that we find ourselves in, but this is telling us a lot of signals about what's going on in the markets and what we should expect with Bitcoin. If the bullish case of Bitcoin does play out and we are seeing mass selling of treasuries, there's really only a couple of places that you can go if you're trying to get your capital outside of the system. If the wildfire catches on that, yes, there is a, in fact, a problem with the traditional financial system. There's really only two alternatives to essentially store your wealth outside of the quote traditional financial assets. So if you're not going to buy equities, the S&P 500 or stocks or real estate or treasuries, again, there's really only two things that aren't tied to that system directly, which is

26:59of course gold and Bitcoin. Now obviously gold has a much stronger narrative. Gold has a much stronger brand identity because more people are familiar with gold. But again, now we have Bitcoin and Bitcoin has grown up matured enough now. Where people are feeling a little more comfortable in investing in Bitcoin. So if they start to acknowledge there is a problem, Bitcoin is just sitting there waiting for them. Like Bitcoin was literally born for this moment. Now I'm not going full fiat doomer, you know, as if you want to show I don't really like to do that. And I'm not necessarily saying like the dollar is going to collapse tomorrow. All I'm saying is the monetary reset, the monetary transformation that we've all been in, you know, privy to that we've all been living through is happening right now. And you do want to be positioned before the music stops. And that's why I think Bitcoin is sitting in a pretty strong place right now.

28:00Also in the face of gold going down, equities going down, Bitcoin is down a little bit, you know, bond yield screaming. We're seeing Bitcoin pretty much hold up around 77K right now. It's not much selling in Bitcoin. You know, could it go lower? Obviously potentially. But if it holds up right now around the price we are at, I think it's pretty safe to say that we are going to go to the upside here very, very soon. Anyways, on that note, guys, I think we're going to hit our first break. And then we do have Frank Holmes coming in. It's going to come in literally like right around now. Then we have Ben Workman from strive also popping in on today's show. So we should have a pretty interesting show. We'll be talking about Frank, of course, I've hopefully we get his macro takes on stuff. And then we have Ben Workman, of course, as I've been talking about for a while, the conversation around Bitcoin treasury companies is all the rage right now.

29:00So we're going to get someone from strive to kind of explain their thesis and where we're going. So first break, I'll be right back. During your Bitcoin journey, you might find yourself in a situation where you need some cash. Maybe it's your family, a business expense, a tax bill, medical reasons, whatever it is, life happens. And that's exactly where lead in comes in. Lead in is the leader in Bitcoin back loans. They let you unlock the liquidity in your Bitcoin without ever having to sell it. Since 2018, they've issued $11 billion in loans to more than 10,000 customers worldwide. I love these guys. Not only do I have an account with lead in, I personally have a loan with them as well. And here's what really sets them apart. There are no monthly payments and you could pay back the loan at any time. You could also refinance it as well. Once you send your Bitcoin as collateral, you can have cash in your account within 24 hours. They don't re-lend or re-hypothicate your Bitcoin. It stays in custody. And they've never lost a single dollar or single sat of customer funds.

30:01So if you want to tap into the wealth of your Bitcoin without having to sell it, head over to learn.ledin.io. Slash simply today and you'll get 0.25% off to your first loan. All right, everybody. We are back and we have the one and only Frank Holmes joining on today's show, Frank. How you doing? I'm great. Thank you. Thank you so much for joining us, Frank. Frank, I'm going to start off with Opti because we were talking about macro earlier and Opti. Do you want to get Frank's take? Yeah, yeah. I'm just frank. Good to see you again. And the chat loves when Frank comes on with the macro picture. So as we are seeing, obviously, I'm sure you're well aware. You know, Scott Besson is now what? Like quadrupling the stock buy back, our bond buy back right now. And this morning, the bond yields are ripping and it's a global phenomenon right now. So Frank, what is your read of the macro picture right now? What should the audience be aware of in terms of not only where Bitcoin stands, but

31:04where we, you know, where the game is in the broad scheme of, you know, global macro geopolitical conversations? China, Iran, North Korea and Russia are aligned. And China is supporting weaponry to Iran via trains. And you're seeing the same thing, Shope with Russia, sending down missiles. So we see all the streets in Iran war Putin loves this because it takes away the destruction in Ukraine. The great concern is China. China will they invade Taiwan? Maybe, maybe not. But then it's encroaching on the Philippines. So Japan is involved in supporting America. And so we're witnessing and troubled affect the geopolitics. And the best writer about this is the former prime minister of Australia.

32:09His name is Kevin Rudman. And Kevin, sorry, Kevin Rudd. Kevin Rudd went back at the age of 59 after being the prime minister. He did his PhD at Oxford on Xi Jinping. And because he's totally bilingual and speaks Mandarin, and he knew Xi Jinping before it became emperor for life. And what he is today, he's deeply concerned about his ideology. So China has invested $1.4 trillion in 75% of the United Nations countries. They will all be meeting next week. In the next couple of weeks is a love fest in New York City every September. But most of them go and go along with China now, even though America is funding the biggest party in the United Nations. So this distress is for real. China is attacking the US dollar, and it is attacking also Bitcoin.

33:10But interesting enough, they're now 30% of the Bitcoin production. They're back into mining for the government. Just like Putin is doing it for the government to get US dollars. But they're assaulting the US dollar. That dynamic is basically putting the stress that the US is backing Japan because they're helping in the Philippines push back against China. And there's an attack on the Japanese yen, so the rates are rising. And so now we're seeing the currency still falling there. And we've got the snowball effect so that they're repretreating the Japanese carry trade. But then the US has to come in to help out the Japanese yen. And that dynamic scares all the capital markets. And the back of the back room is China saying get out of the dollar, get out of the dollar, only have gold. They're gold. They're not Bitcoin. So what we're seeing this year is a strong pattern correlation of gold dynamics and

34:14Bitcoin dynamics. And the big rally we had coming in this past month, you can see it was also gold. Gold Bitcoin were up, one, two standard deviations. They felt gold fell also. Now we're seeing the reset gold testing going back up to highs. We're going to see Bitcoin do the same thing. So we're in this concept of both Bitcoin and gold being respected globally as monetary aggregates. Still central banks are not full online with Bitcoin till the clarity to the glory act gets legalized. I think that will be a game changer for Bitcoin. You can probably see it go through 100,000 in a quick notice. But in the meantime, we are witnessing this sort of global geopolitical pushback against China. What is positive, which you're seeing in Latin America, is a swing to conservative governments who are more pro-America to protect the Western hemisphere.

35:18So these are the dynamics. They're showing up in the currency markets of rates rising. They're rising because the world is addicted to modern monetary theory that is print money for every problem. But now the money is going towards defense and national security and AI. So we're seeing this also witnessing this huge boom in AI. And so these are fantastic times. But here's the positive part. The airlines are packed. That means people are traveling all over the world. North COVID, US, TSA, clear, two million people a day. Now it's three million. Even though the fuel prices have gone over $100, which then spooks inflation and spooks the currency markets, you're still seeing those ticket prices are going up. They're being, they're being absorbed. So I look at, I have another ETF called CSEA. It's cargo. And cargo is open for the SAP 500.

36:19So global trade is not stopping. And people traveling for business or holidays is not stopping. So the world is once again back to MMP printing money. This is so good if you want to have the intelligence of having Bitcoin and gold in your portfolio. The hard assets. Frank, can I ask you for a favor? Do you mind dropping and rejoining? There seems to be a little bit of some technical difficulties on your end. No problem. I'll do that. So while Frank rejoins, let's unpack that, Opti. Because that was incredibly bullish as it relates to hard assets and gold and Bitcoin. This is the thesis. This is what we've been talking about for so long. What's your take, Opti? Yeah. I mean, what we do know for a fact based on all the metrics. We can see is exactly what Frank said that we are seeing a rise in gold and Bitcoin demand.

37:23And I think I've read you guys the headlines that we've been seeing coming out of the corporate press, essentially saying that gold, that there's a higher, whoa, a higher correlation, a Bitcoin to gold right now versus Bitcoin to equities. And that's a very strong trend is exactly what Frank said. People are buying gold and Bitcoin. It's no longer a, or sorry, it's no longer a choice between Bitcoin or gold. It's a kind of, hey, I think we need both of these in our portfolios right now. Okay. Let's talk about issues. Absolutely. Frank, I got an idea because you're dropping bullsauce. Let's do audio. Let's do audio so we can continue the conversation. That's better. Yeah, yeah, yeah, yeah. We're good. Awesome. Fantastic. All right. What the punches? I love it. Frank, okay.

38:23So you have been reposting some very interesting things on your ex account. And I really want to get your opinion on them. First thing that comes to mind was this post and it relates to Paraguay. And I actually was able to visit this specific school, I believe, which was really cool. But you go on to say congratulations, Mr. President, on the great news for small communities in Paraguay. Hyve is building more than Tier 1 data centers in Paraguay. Hyve believes that what we invest in a community, our responsibility extends beyond the walls of our data centers. I can confirm this, ladies and gentlemen, I was there on the ground. I saw it. It was beautiful, this beautiful school with beautiful new technology that was given to them by Hyve. Fantastic. So I can confirm this. In Valence, Valence Suella, Paraguay, Hyve has invested directly in improving the quality

39:27of life for the families and children who live near our operations. We have helped rebuild and modernize local grade schools, improving the fundamentals from renovated bathrooms and new chalkboards to air conditioning, while also helping bridge the digital divide by providing computers and Starlink Internet connectivity. Hyve has also helped improve community safety by installing city lighting along 14 streets in Valence Suella. BetterLid streets provide greater visibility and security for families, children, workers and other residents moving through the community after dark. These investments reflect a simple philosophy. If Hyve is going to build world-class digital infrastructure in Paraguay, the community surrounding our data centers should share in that progress. I wanted to get your thoughts on that, because that hits close to home for me personally, because I saw this. I experienced this. I saw the smile on these kids' faces and children are the future ultimately.

40:30Absolutely. There's such a road about a couple of weeks ago, the negativity towards data centers. You have these people protesting, and then they put their pictures on Instagram. You can't post on Instagram if you don't have a data center. There's no Facebook if you don't have a data center. There's no Spotify and there's no any of these things you take for granted. We do have these new nights as they like to call them, economists in Wall Street Journal. Yeah, 100%. I think there's this misconception. One of the most beautiful things about Bitcoin and the AI data centers that you were referring to, Frank, is that it aligns incentives in a way. I think that this is something that perhaps people misunderstand, which is, you guys are going in there. You guys obviously are setting up your own operations, but you're also providing a tremendous

41:35amount of opportunity to the local communities and also additional tax revenue to the governments. Specifically to the government of Paraguay and also where you, on the other operations hive, has all around the world. Could you talk a little bit about that alignment of incentives? Perhaps that's the disconnect that the Luddites, as you say, perhaps aren't being totally transparent in. Well, we've been through this, no Bitcoin has much stronger skin because we've been attacked and vilified and we continue to be in many, so I call them, Icgner jurisdictions. And so what we believe is that it's so important to what you see these areas, to embrace the community and it doesn't cost that much money. It really doesn't in this game of things. And there will be so much fun. Remember that Bitcoin at the beginning, when I first got in this journey, was consuming

42:35all the electricity of countries and it was so distorted. And I think Michael Seller led the charge of getting all the Bitcoin miners to give in their data and their reverse analysis and show that it was so small. And what we've also seen and what we'll see with AI is the efficiency of these chips. Every having to survive, you need to have a more energy efficient chip. When Bitcoin first came out, the chips were 300 joules per second for a data point. And the famous S9s, they were 30. Well, now we're talking 10 to 12 joules per second. So the energy efficiency is improving so in fact, we are over 2% of the global network today. But if you take a look at that, the consumption of electricity for that 2.0% is less. If you were doing that eight years ago, you'd have to consume in fact more electricity to

43:39have that type of impact. So I think I say really positive on it, but we have as data center people call it cave people that are citizens against virtually everything. Some people on exit brought to my tension that the funding is coming out of Shanghai and it's doing everything to slow down America's build out. But I don't see any slow down because you want to take a look at some of these memory chips. So we've got these AI chips now. Well they consume so much electricity at this stage and that will drop, I believe, there would be more efficiency, but you need more memory. And so the memory chips have been on a tear like sand desk. If you take a look at those stocks, like it's just breathtaking. So what you find out is that the hyperscalers have bought everything out for the next couple of years. And so there is no, you can't go and get a big order of these memory chips delivered in the next six weeks.

44:39This is not going to happen just like it's not going to happen for HVAC equipment and chillers. There's long lead times. And so the still the fastest way for the HPC build out and they call AI factories by Nvidia is to go through Bitcoin operations because you already have the substation and you already have the electrical grid and the contracts in the land and it's much faster of the permitting process. So I don't see that slowing down and I see the real deep value still is in some of these plays that are Bitcoin miners. Absolutely. Frank, this is another very popular topic on X and I want to get your opinion about it as well. You posted this a couple days ago and it relates to something that Opti loves to talk about which is the Japan bond situation. So the X-Poses Japan's 10 year bond yield officially rises above 3% for the first time since

45:451996. The move comes just hours after reports the US Treasury Secretary Bessent told Japanese officials that rate hikes are needed and your commentaries, the reverse carry trade continues. Money invested abroad will return home and this is causing a massive global rebalancing which means more volatility. Frank, this is a very popular topic on simply Bitcoin Opti if you can cut to you because I know that this is right up your alley. This is the biggest thing going on right now. So I'm glad we got Frank to talk about it. The floor is yours because the audience can't wait to hear your take. Well, I think the big part is we have to take a look at Japan as unique because most of their stock market, the biggest shareholder, is the central bank. People don't realize that through the ETF. The other country that's gone this on a huge way is Switzerland. Both these countries are big equity players in the country.

46:45In addition to that, the pension funds and institutions, because rates were zero, they were borrowing at zero cost and investing abroad in America to get higher yields. And now that the Japanese yields are 3%, that money is now coming home by insurance companies to invest in 10-year government yields there. But I guess the real important part is that most of America's debt is outside of America. Most of Japanese debt is internal. They're huge savers. You're talking about a culture of 30% savings rates. That's not an America. You have the insurance companies and you also have their central bank owns most of the debt. You don't have the Federal Reserve owning most of the US debt. So when they start this rebalancing to bring the money home, it has a sort of amount of money

47:47that was born at zero is massive. But I don't think it's going to have a huge impact on the economy except for inflation will continue. And the concern is this. The yen is falling in value. Rates going up should stop that. But the rates have not. So the yen continues to fall. The US comes in and says, okay, we're going to start buying yen. And maybe that will stabilize it. So we'll print the money and we'll come by the yen. But why would America do that? Well, there's geopolitics, but it's also, they own over a trillion dollars of US bonds. And you don't need them to be dumping US dollars. And the rates are going to go up even more here. So we're seeing this sort of moderation of trying to stop rates from rising dramatically. And it all stems from COVID. COVID was the after COVID was finished the first two years, all that money printing. It's created this sort of lingering.

48:48We always talk with the lingering COVID dilemma that a lot of people have in their bodies. Well, it's in the financial system. And that's what you have to realize is that it hasn't burned itself out yet. And that COVID phenomenon shows up as inflation. And inflation is showing up in Japan. They didn't have for three decades. So we've got this re-bouncing calibration. And there are partners against China when it comes to military and also protecting Asia's theater. The moment over here we have this currency issue. And they have lots of investments in US government bonds. We don't want the rates to scale here. China does. China wants the rates to go to 10% in America. And for the economy to fall apart, that's their goal. And so we can see that unfold. And that's why I don't know who's going to win this imbalance between the monetary fiscal policy of Japan versus the US.

49:49But we do know on history says whenever the monetary and fiscal policy start to become significant, gold, historically it was always the asset class that gave you the stability. What we have in the digital world today is Bitcoin. Beautiful. Love it. Opti, you want to follow up on that? Because you're plugged into this, man. You talk about it almost every day. I mean, I think Frank explained it like very well. One of the things that I usually highlight to everyone that watches the show is this idea that I don't think very many, and maybe the younger generation isn't fully aware of it. Just like how intertwined this all is. Everyone thinks it's like, oh, it's just in Japan. Like that has nothing to do with us. As you explain, it's like, no, like it's fully intertwined. But I don't necessarily want to pivot the conversation. But I do think that it's very interesting, like you said, right now in the digital world, we have Bitcoin now. So from your perspective, my question would essentially be, you know, you've been in

50:51the markets a lot longer than I have. So like from your perspective, how real is the trend of people taking Bitcoin seriously in this potential financial calamity that we find ourselves in? Because as we mentioned, and as we've seen, people are investing in gold and Bitcoin now. And we've been talking about for a few years now, the institutions are here. I think a lot of people are impatient with the idea that they're not buying Bitcoin fast enough. But I feel that now the consciousness around Bitcoin has changed. The understanding of Bitcoin may not fully be there, but it feels as if more people are comfortable at the very least considering Bitcoin as an investment, considering the macro landscape. So what would be your thoughts on that, Frank? I think I was right about this and that is government policies are precursor of change. So I try to monitor the G20 countries to capture 90-some-some-upercent of the world's GDP.

51:51And so we're coming back to what is government policy that could change that. I think the clarity act would have a significant comfort factor for that. And the faster it gets done, the better because China is pushing to have a parallel financial system, which is also anti-Pitcoin. Unless they're mining it with cheap electricity, so they can cheer around and get US dollars. And blow them out to put pressure on the dollar. It's a whole thing on run and setting just correctly missiles at us. They're out to attack the financial viability. And that is really important because we can see today that the capital markets in New York dominate the world. Capital formation by far, you're seeing Canadian gold mining companies leave there to go to New York, like Barrett Gold. And that's just a classic example that we see the capital markets in London.

52:52There's nothing not even close to what they were before COVID. And we go back to the beginning of the century. No impact. There's so hard to raise capital. But not in America. We're seeing the evolution for AI funding where stablecoins are investing and pushing out the banks to lend to buy your GPUs. So I think that how that's really positive and dynamic, they want those higher yields of 6 to 8%. And so they know the longevity of the GPUs. And you have BlackRock, a $10 billion, Blackstone, a $10 billion. You have all these new convertible funds, but you have these credit funds that are basically saying we will lend for those GPUs. And only a couple of weeks ago we had Jetson with the capital industry on CNBC. That doesn't happen in these other countries. A classic picture, the Xi Jinping putting all the CEOs of the tech companies in front of

53:52them, like they're on trial and a trillion dollars of market cap for their tech stock and the market. And here you have President Trump with the White House, or the huge dinner function, and everyone's talking about the future and how they're going to build out AI and what they're going to use it for. So you have a complete different world of looking at this space and the most advanced capital formation is in New York. And I think that that's what's really important. So what is it I don't want to do? I want to try to attack the dollar to attack the financial viability of that system. And I think we'll weather through it. It's just one of those speed bumps and detours you go through while you're driving, but we'll get back on that highway and we'll back to 70 miles an hour. Hey Frank, and Nika, you can pop in. I don't want to cut you off. But how hopeful are you that the Clarity Act still has a chance to pass? A lot of the narrative has been, you know, it was supposed to happen before they took

54:53their summer recess. Now it might happen when it comes back. I know we heard Speaker of the House essentially say that they're going to not come back at the same time. I think it's like a two week delay. And then it's the midterm. So is there still hope from your perspective to even get the Clarity Act through before the whole midterm cycle happens? Well, I'm an older guy. So I'm going to tell you I love Bob Hope at Percy Faith. And so I have lots of hope and faith that would get passed. And so there are these dynamics we're seeing in the data center business like in Texas, the governor pulled it back because they're worried about the democratic strategy to defrown the Republic leadership in the state by going into rural areas. And so they put a moratorium until after the election. You hear that same type of story in Canada, but it's very different. Prime Minister Cardi is really interesting because he was put into power as from Goldman

55:57Sox going to the head of Bank of Canada by a conservative government, Harper. Harper's the one that basically picked him. And from there he went over to become the head of a Bank of England. And then from there he comes back to Canada and he becomes head of Brookfield, chairman. And Brookfield is a beast, an infrastructure and data center business. And so you see on that big round table Brookfield is at the table with Goldman, Sox CEO and BlackRock and Blackstone. So there are serious players. He knows all about data center. So as soon as he became in power, he immediately created a AI ministry. He's a minister of AI. And so the data centers will go through in Canada because they're very concerned about being competitive and having sovereign data centers. And the premier of Ontario where high is, he's also very bullish on it. Now, municipalities, they're all worried about getting elected.

56:58So they'll kick the ball to the province or the federal government to say it will go through. But I think that's the same thing here in America, just a different political realm. But Trump is very pro, the data center of build out as he is with Bitcoin and pushing for the clarity act. So we have these two countries that are very much cognizant of the significance of data centers for our future. Love it, Frank. We're getting a ton of positive comments in the chat about the hive hat. Two comments so far. People are saying they got the hive hat at Bitcoin 2026. We got a comment saying the hive hat is dope. And guys, I'm sorry, but not sorry. I got the burgundy one, which is one of the special additions, which I love. But they come in my Harvard color. Love it, love it. So yes, the hive hat is great. You guys have to see the hive team to get the hive hat.

57:59You have to. You have to send an email to Nathan. Nathan, I'm sorry. I'm going to put your email. In the chat, send an email to Nathan and he'll make sure that you get the hive hat. Frank, another question is named as the email address of the bot of our press release today. Love it, love it. I'm going to put it in the chat, guys. So you can you can email Nathan and Nathan will make sure to get you the hive hat. And it's you guys have some of the best branding in the industry, Frank, I might say. So another thing, another thing that popped up to me, you're talking about the Luddites and the cavemen, you actually made a meme about this the other day, which I found hilarious, which is two Luddites complaining about data centers and then the two cavemen that look at these kids addicted to technology and it's, you know, it's, it's, they're actually using the fire.

58:59Very, very appropriate meme. Frank, we always talk about and you and I have talked about this privately. We've we've talked about this in general in how special America is to do business. How entrepreneurs can really start from zero and, you know, get to essentially become very wealthy, become very successfully successful and fundamentally change society. And you and I were talking personally, specifically about the Nvidia city, a CEO and I saw this and it was very inspiring and all you said was the American dream and it's a picture of Nvidia's first office and then it falls up with today and videos worth $5.4 trillion. So could you talk a little bit about the American dream because I feel Frank, you know, specifically in the United States, you see the rise of the popularity of collectivism recently in American

1:00:01politics and we were talking about Latin American politics, how, you know, you see a lot of, of pro capitalist politicians getting elected. So could you talk about how important the free market is in capitalism for the American dream to be even achievable, right? I'm a story of that myself, right? I'm a first generation American. I wasn't born American. I became American when I was like around eight or nine years old and I started my first business when I was 22, 23 years old. And you know, now we have simply Bitcoin, right? So you know, that can only be a cheat. I'm telling you guys, I've traveled around the world. I've lived in Latin American countries. There's something very particular about America that gives this opportunity to everybody. Has this opportunity and I saw this very unique stat the other day, Frank, that, you know, I don't know what the exact percentage is, but a big portion of the most successful entrepreneurs

1:01:04in the United States, including Elon Musk are first generation Americans. These are people that came to America with nothing and they've become some of the most successful people on planet earth. Jensen's included in this as well. His first job was at Denys, right? That is a fantastic story. I think that was the video that you sent me, Frank, which was very inspiring. So I'd love to get your take on that. Well, I think there's something else that's important as a global investor, often in Latin American Africa, I would give money where we're investing in a gold mine in rural areas and very poor areas in orphanages. It would go, probably you would find the Catholic Church had these well organized orphanages. And so that journey is when you think about America, how many orphans adopt the children here become captains of industry.

1:02:05So we can look at Steve Jobs. You can look at Larry Ellison. You can look at Jeff Basel's as now living in Miami. He's adopted by Cuban family. And these other countries, you don't hear the story of someone being adopted and then all of a sudden becoming a big in there. That did it by innovation and technology. Not sugary like Shavostid, not military to confiscate and steal assets, but someone that would innovate and make humanity better. And you do have that. So to me, it's really interesting. It's in many dimensions that you can start in your garage. Or you can be adopted and don't worry that nothing's going to stop you in this country. Absolutely. Nothing's going to stop you. And it's very metacru—it's based on a meritocracy, right?

1:03:06Frank, which is— That's the opposite. But versus which Xi Jinping was admonishing all these CEOs of technology that its communism first, ideology, collectivism first, over your individual wealth. That immediately peeled a trillion dollars off the market cap of stocks. So you do have a complete different psychology towards capital formation, innovation, the hottest new products, etc. So I remained very, very bullish like that. But in my journey, you know, I go to other countries that they're supposed to be really developed. And when you can find what happens—and I've written about this—the more left a government becomes, the higher the probability of human rights being taken away. So where you have common law and you have our rule of law, our system here, the individuals has more rights to fight back. You don't have that.

1:04:08And we saw what happened in Canada with Justin Trudeau of the trucker strike that you would use the banks to debank truckers and it was just all breach of their individual rights. And we experienced this also in places like Sweden. And I think that we saw this this week. We're going in front of the courts to move stuff from their kangaroo court, called the Administrative Court. And it's a whole strategy that they have. So you just realize that they bully and intimidate that person or individuals or companies and they try to—they have a journey to an ideology to bankrupt you so you can't defend yourself financially. And they did thank you. So we've retained many different types of litigating lawyers to try to understand the landscape of really what's going on in this beautiful world called Sweden. And you find out that there's emails between their tax department and their government owns

1:05:09the CNN of the country. So the biggest television stations controlled by the government and they are in partners with emails with the tax authority. And the tax authority, the agency that comes out earlier again this year and last year comes out with a pronouncement that compute is compute and when you export compute it's an export. And they're saying no if you're crypto. If you're crypto, no. But the law says we follow the law and we paid millions and millions of dollars of taxes but you still have this in a developed world and I want to contrast that to Paraguay. The central bank of Paraguay is recognizing that Tier 1 data centers for Bitcoin mining are a huge contribution to the GDP and now is showing up in a column in the telecommunications subset. And this past week we had this incredible drama going ahead to get in front of a judge and the day before the STA, the Swedish Tax Authority,

1:06:12does this huge publicity of a Bitcoin mining and hive and all these other people just to manipulate the narrative. Do you know what they've done in this country? They can arrest you and detain you for two months and not charging and they've done that to people. So we know a lawyer that was has office rated took all of his files, he got them all back and lost basically his practice but they just say we don't want to be in that business. So you could be in the maybe they don't like the flower business. So they're going to have their flowers and so I try to tell people when you look at the global world and you look at Sweden as a sort of great place and they say they're politicians we want to be the top 10 in AI data centers in the world. Well guess what? You go and put a big $1 there and the tax people go, oh we can't wait till we go and change the rules for our interpretation go after you and you find it's not for the money. They don't they they want to bankrupt you. They go after the directors because the law where there says they can go after

1:07:18the directors so therefore they scare everyone. So it and it's a lot of times mum and pop shops that are getting they don't they they get the banked they can't pay the lawyers to defend themselves even though they have not roped at any laws they win later on and takes two years to get your money back. So I scratch my head and say you know I'm in parod white it's it's it's what a contrast a GDP per capita what a contrast of central banks there are anti the central bank of Sweden is is basically embracing the Bank of International's settlements anti Bitcoin and over here they're saying well it's actually is really important for our GDP. So we go through this every week but you know what we mentioned a great press release today we're continuing to hire people we got a superstar that a great experience at HP and IBM and and we have big contracts coming down the pipe now those we announce so we're we're very excited about what we're doing and now

1:08:22so we just keep our head to the ground keep building revenue keep building cash flow and we believe that we will prevail in law and it was a get through it but we believe also Bitcoin helps the little guy what we're doing in Sweden it will help the little guy expose what's happened with this abuse of tax agency. Absolutely I think I think Bitcoin it's that that last layer of defense right the way that I see it right you know if if the jurisdiction of all else fails in a specific jurisdiction new as as individual have have the ability to vote with your feet and and that's something that that Bitcoin uniquely gives you. If you were in Sweden with your club with simply Bitcoin they would come after you. Yeah I believe it and they would call the bank to have you debanked and we know this now from other cases and we've spoken our research many litigators

1:09:23tax litigators will work at the SDA and they say it's totally changed the behavior so they don't like you know here you're an entrepreneur, a cent of your business and you've got the Bitcoin well they don't like it they're going to come after you and your family, your children they don't care and that's you have to realize so I really think that we're a champion it's not just for what high-best position is because we would never go in that country never never because we all fall below and we did everything that's right and they just moved the goalposts but when we were tragically shocked when we found out how many small people two thousand a year in this little country of less than ten million people they do this to every year and you would be a classic your business. I completely I 100% agree with that and and this is why you know America is so special even even my country of origin right Ben as well I think I would have been arrested a long time ago for talking about these specific subjects and this is what makes America great and

1:10:29I think you know this is what people people have to remember right so with the rise of of the popularity of collectivist ideology in the United States guys that we have a historical track record we have a hundred years of history we have multiple countries like Cuba then as well North Korea and then even even in the case of China right the China was a very poor country until they pivoted they they had to pivot or else they were going to continue to to stay in poverty and then they kind of they semi-opened the country to to to the market. We opened it. Yeah. We did seven tax free zones along the ports. Yeah. Yeah. And they went and had their they copied common law for the Shanghai stock exchange listing they did everything that but two tier system. What's happened in every second language every child had to learn English under Xi Jinping that's gone. Yeah.

1:11:29So you're seeing this kind of communist ideology but you're so right it came out of poverty because they embrace free markets and they sent their best brains to American schools and to British schools and I know this from my days in Toronto it's 30% of the best high school in Toronto downtown was Chinese and they went back and they went back with with great ideas was they learned here and that economy grew but now it's going through this transition and we'll see we know that Singapore has been the biggest destination of the millionaires that have been able to get money out and one of the big ways that it was the first was the big point and and that's why China had to go against Bitcoin because they don't want to to leave the country. Absolutely Frank. Before we wrap up this segment I want to I want to give you the floor to talk to hive investors and potential hive investors that are that are in the chat and for anyone who doesn't know guys hive is a dual

1:12:30engine machine. I love it and obviously they they Frank if my numbers are correctly hive represents 3% of the global Bitcoin hash rate massive Bitcoin minor and also the AI HPC business as well that's what I mean when I'm talking about the dual engines that are constantly buzzing so Frank could you just describe to the audience you know what's what's the latest and greatest happening over at hive. I think that sentiment has a big impact on stock prices, currencies it's all about managing expectations and sentiment many of the best quant funds look for various indicators of sentiment and I think that when you have car news extremely smart and and accomplished professional going up against President Trump on trade and as back and forth and Trump comes back with you know name Lake Ontario Lake America or something like this is just

1:13:33negative sentiment so what is that negative sentiment it gives you what warm buck would say many people know the price of something but not the value and the value proposition is that on a multiple revenue per share or cash flow ibbida per share hive has the biggest bang for your buck and and if you look at what we are doing today and what we've been doing and through all the down side close we've always had positive operating income we haven't gone bankrupt we haven't gone through all that type of headaches that's many of the other people have so we are very stable entity and how we function and I think that once this is over this sort of rattling back and forth that sentiment that it goes through this huge value pump and and that means it it can easily double and if you look at last year when we're doing a million dollars of data review the stock was pushing like seven dollars so it's what why is it today is it sentiment so negative of Bitcoin

1:14:38negative about AI and the data centers you take a look at some of the other players in the space and we're going down the AI path of selling their renting out their basic their land electricity they're not doing what we're doing of having to direct clients apart from Canada then if you look at those dimensions of future revenue future cash flow what we've baked in the oven today and what we have next 12 months it's just it's a layup as a dual engine we've got torque on the upside with Bitcoin and we have huge AI growth and that margin in the AI business right now is much bigger than Bitcoin Bitcoin to give you the equivalent margin at the today's difficulty it has to be like $200,000 so that's why you see a lot of money going into AI because it's a much higher margin and some more stable margin but we're there where the double engine last year we scaled from six to 25xage and now hold on your seatbelt we're scaling the AI business in Canada

1:15:42and and the big opportunity with growth will be parent-wide absolutely and Frank also to one of the things that stands out to me about the hive team is the all stars you guys have iDink Gabriel Amas you know just just to name a few you know these are these are absolute Luke these are absolute geniuses in their field of course i'm a little bit biased here but my my boy Nathan of course on the on the marketing side and of course yourself Frank very impressive i'm sure i've missed some names and i apologize it's just they're all incredible well great to borrow says doing in a phenomenal job with buzz in Canada yes absolutely really is he is he is he is a he's a masterful and building the data centers i didn't know what say is one of the best operators in the world yes some deficiency that we function over nine time zones three continents five languages and we still rank up as being the most efficient and the AI business

1:16:48to encounter it we have the top ranked in that efficiency if you use our chips and the same thing as a big coin minor so i think it was a great job as as a operator and Craig is a phenomenal builder i didn't one of the stories that stuck out to me frank with a specific regarding iDink is that i didn't i didn't came on the shows like last minute and we were throwing some math questions at iDin and one of the things that stuck out to me is he was doing all of this in his mind and these weren't easy like you know math calculations he was just like computing it in his mind and then often i were double checking it with our phone calculators in the background and i think what was he doing he was he was he was multitasking while he was doing this and it was just so impressive so always bullish on the hive team it continues to buzz the dual engines fantastic team frank always an honor to have you on simply bitcoin thank you so much for joining us to really

1:17:52appreciate i believe in america yes believe in america absolutely thank you frank really appreciate it hey wait wait nika before we hit the break because we have a guest coming in in about ten minutes i do want to cover something real quick that is kind of a new story uh so guys today she's going to be like a lot longer than usual we got two two great guests but before we uh you know transition into the next portion there is another nika there is another hardware wallet update that i think we should be talking about here very quickly so let me pull this stuff up for you guys if you're on twitter you're probably aware of this but here we go so there is another fishing attack happening right now with two pretty popular hardware wallet guys so let me start with the first one this also happened yesterday so trezer said they tweeted and let me see is the timing that literally the timing was about the same for both of these so trezer tweeted our third party email provider has been breached please be aware

1:18:55that the email named critical security alert stm 32 entropy vulnerability is not coming from us and it's a fishing attempt do not click on any links we have taken down the domain and we are investigating the situation including how the hackers got access to our legit domain and then we saw bit box say something very similar our preliminary review of the fishing mail that was sent out to our newsletter subscribers about an hour ago found that it is very likely that our newsletter provider got compromised multiple other Bitcoin companies got targeted as well and it appears that we all share the same newsletter provider we sent out a fishing warning to all newsletter subscribers contacted the provider and reported the fishing domains most of the fishing links appeared have been taken down already we are still actively investigating the situation and we'll update you what's what's interesting to me is how this keeps happening like the the specifically kind of like the these attacks on self custody keep happening man and it's and it's and it's crazy I think the

1:19:55key takeaway here ladies and gentlemen is like obviously don't type in your seed phrase into anything I think that's rule number one like the reason that this fishing attempt would have been successful is if you typed in your seed phrase into the fishing email and then they would have got an access to your funds and then of course they were taking advantage of people's insecurity around the cold card exploit so this is how you ended up in this particular situation that we are in so yeah don't type in your seed words into a browser don't type in your seed words into anything that's connected to the internet my honest opinion is that you should use the stamp seed or the Bitcoin device fantastic solutions both you could literally hammer in your seed phrase into into a plate of titanium so it stands the rest of time so it could mean that's not that's not how you say it's a it survives the

1:21:02test of time better says the test of stands the test of time I don't know but you guys have a live show because we're entertaining and we got the vibes and we got fantastic guests well I look I would say and actually this is kind of a shot at Nico I say it all the time Nico always gets mad at me because I never respond to any messages ever our company slack is just like mine I have I don't know hundreds of messages I need to respond I got hundreds of text messages that I never respond to I got thousands of emails that I don't respond to so usually I would just say if you see this stuff you know you see emails obviously they're designed to make you freak out what Nico said is obviously the like you should feel weird if there's any signal of you should you know type in your

1:22:05seed phrase though it seems like maybe these were like malware links so maybe if you had your seed phrase connected to your computer somehow maybe they can get in I don't know the full details of this but what we did see and I'm not going to pull it up right now but we did see that the phishing emails did look very official and they were kind of connected or at least seemingly look like they were connected back to treasurer and or bitbox so they are getting more sophisticated here but I would just say if you get an email from someone or even a phone call just don't respond to them you know don't let them get make don't let them force you into an emotional decision be I mean maybe be more like me and you just don't pick up random numbers you don't respond to emails that would probably help you but I know a lot of people are better at responding to stuff like this if I'm not mistaken I did think I think I heard oh no that was a totally different story but we did

1:23:08see some scammer get caught yesterday and they were actually like calling people and doing social engineering attacks and in person on the phone so you're you're look the point of all of the is one like Nico said we are in this very interesting phase right now where hardware wallets and in particular self custody is being attacked whether it's phishing emails of course the seed phrase entropy it is a scary time and I think people are taking advantage of that guys so hopefully you were not affected by this if you do have a treasure bit box I just felt it was our duty to acknowledge the fact that there's a phishing email but did uh okay our guest is here our guest is here so guys we're going to be right back just after this quick break you secured your Bitcoin but did you secure your devices too they're still broadcasting your location and digital footprint GPS wifi Bluetooth cell 5G EMF all of it is leaking

1:24:13escape zone fixes that their Faraday bags block every signal your device emits so you decide when you're detectable not the grid built for Bitcoiners who know sovereignty isn't just your wallet it's your phone your hardware wallet your keys and your entire digital light go to escapezone.com slash simply and use code simply for 10% off that's escapezone.com slash simply code simply I want to give a shout out to our partner hive digital technologies fueled by clean energy across three continents hive runs dual engines Bitcoin mining and AI compute their AI platform is ranked number one in the world for network performance and it's doing something bigger than compute it's accelerating human discovery the science the breakthroughs pushing humanity further and faster listed on the NASDAQ with the ticker hive catch the latest buzz at hive digital tech on x or hive digital tech we got the one and only Ben work been on the show today first time how you doing Ben I'm doing well

1:25:27how are you good thank you so much for joining us it's it's man you don't need any any any type of introduction so thank you so much for joining us opti some words well I'm just excited to to talk about this so do you want me to jump in or do you do you want to jump in let let get the ball rolling and then okay okay together I Ben well thank you so much for coming and obviously you are a part of strive and I think one of the big conversations amongst a lot of Bitcoiners right now is just the Bitcoin treasury model in general like is it working it should people invest in it obviously we saw 2025 there was arguably a good hype cycle in Bitcoin treasuries now the bear market's been pretty brutal for a lot of companies and in the last few weeks there's been multiple controversies surrounding not strive actually strides been you guys have been doing incredible work but the first one obviously involving strategy the never sell your Bitcoin they sold

1:26:29Bitcoin everyone's like they crashed the price more recent though the meta planet one and so I don't want to really get into those controversies per se I don't want you to you know necessarily talk about your competitors in in that light but really for everyone out there in your mind what is the thesis for a Bitcoin treasury play like should people be investing in it like what market fit does a Bitcoin treasury solve just general thoughts on that idea and then we'll kind of you know get the conversation rolling more particular and strive sure yeah the Bitcoin treasury model I think is evolved quite a bit particularly over the last year you know this this last cycle was really a good stress test for the industry as a whole I think and I think because of it a lot of these companies are going to come out significantly stronger but you know when you look back to even when strategy really started this the investment thesis was actually opening up the door to Bitcoin exposure for a lot of different institutions and types of organizations that can't get the natural exposure

1:27:31to the commodity itself and we in a corporate wrapper when you've got the ability to utilize the capital markets and utilize premiums and different securities and put different types of models together to allow you to accumulate Bitcoin really the long term value proposition is in being able to increase the exposure of a share so if you purchase a share today through all the activities these companies can take in the capital markets you should own more exposure to Bitcoin over the long run and so you start to hear a lot about the terms like amplification and things like that in the sector and that's really what we're focused on we want our equity to be highly volatile right we want it to be amplified movements relative to Bitcoin or a high beta to Bitcoin and I think you've seen that recently you know our common equity has been pretty volatile as Bitcoin's moved around we've got about a 1.9 beta to Bitcoin which just means we're highly sensitive to those moves in Bitcoin and what you find is that volatility is actually a very valuable characteristic for a

1:28:32security you know a lot of people think that you want stability and very slow appreciation and value over time and there is a market for that but what you also find is that volatility is highly valued in this market it makes the premiums on derivatives you know very attractive so people might want to hold the security so that they can sell options on top of it and generate income but also if you're taking a directional bet which is what a lot of people are doing here for an asset like Bitcoin they're taking a directional bet and saying if I believe so strongly that over the next decade Bitcoin's going to outperform nearly everything you're going to start seeing the devaluations in the dollar I want to have amplified exposure to that move over the long term I want to try to beat the returns of Bitcoin and so holding a security you know like our common stock or any of a number of them in this industry you know you're effectively buying into that amplified play over the long term and saying because these companies can continue to build my exposure to Bitcoin in a share I purchased today over time without me having to do anything else I should over the long period of time outperform

1:29:37Bitcoin in that type of a model so I think it's taken a little bit of time for people to wrap their heads around it it was certainly different and going into a stress test period like this after all the raising that was done in 2025 and all the different companies that entered the scene you're now starting to see the differentiation in those models and those foundations that were put into place and you get to see what happens when you can be active during a bear market so you know I'll certainly say that the last month has been a lot more fun than the last you know nine months have been but I think we're all on the right path here and I think the industry is going to be better off for it. Ben are we out of the woods? You know I could never say that we're fully out of the woods there's a lot of macro factors that are out there and I think you guys you know talked to Matt a little while ago where he provided some of his macro views on the setups that are going on but anytime that you see weakness in the broader economy in the United States and you see them starting to focus on treasuries and rates and how they're going to manage those you always introduce the opportunity for

1:30:37them to get really aggressive in the management of those things and that can cause some market shocks to happen but what we look at is we say you know it feels right now like the bottom could be in but you can never guarantee that and if something were to happen if they were to get really aggressive in managing the rates and they were too directly intervening here you know I think you could see a Bitcoin move that goes down sharply the problem would be is it would also likely rebound sharply as they stepped in and backstopped it and so it's very difficult to try to time these markets because there's so many external factors that nobody really has full visibility into and so you're playing a waiting game and what we've learned through a lot of these events in the past is that you can get sharp V-shape recoveries and you can find yourself sidelined and so when we look at something like Bitcoin that's been trading you know near its 200 week moving average near the power law floor for quite a while now the best thing you can be doing is just allocating in over time and not trying to time the pico bottom and trying to you know figure out how to get that bottom tech on a

1:31:40wicker something it's just to be in position and if you've got a long term thesis you can let short term volatility play out so whether we have you know one more dip back down in Bitcoin I don't know I couldn't say for sure you know they can do a lot of a lot of things I couldn't see coming out at the fatter the treasury level that could impact it but it certainly feels like the value of scarcity is increasing then what would it mean and you start to get all this excess supply coming into the market you know the market's going to start valuing scarcity because everything's becoming incredibly abundant and so I think Bitcoin's value proposition from this point forward has never looked better I completely agree with that Ben so in this previous bear cycle we saw a lot of the major treasury companies at one point or the other start to sell Bitcoin what were some of the biggest takeaways or lessons from this previous cycle specifically as it relates to the Bitcoin treasury model and something that perhaps could be done differently in the future I think there's

1:32:45a lot of takeaways that happened here you know if you rewind back to late 2024 when a lot of these companies were kind of emerging into the markets and you had a lot of the specs and the reverse mergers and everything happening you know Bitcoin was really strong and that meant that capital was readily available and the choice a lot of companies had to make it that time was how much capital did you want to raise and what terms were you willing to accept to raise it and the money that was most readily available was the convertible bond capital and a lot of that comes from more of the fast money shops but when you're a smaller company that's not the size of strategy to get a deal done with those types of institutions you usually have to put things like in Combrance tests or collateral levels in there and so a lot of these took on you know two to one coverage ratios in those bonds and what happens when you go into a bear market is that those ratios eat up the capacity of your balance sheet so when the value of the asset you purchased compresses and your balance sheet compresses you lose that excess capacity that you once had which would have allowed you to operate

1:33:48and so you get stuck in a position where you really just have to wait for Bitcoin to go up and so if you took on too much debt proportionately to the amount of equity that you took on during that time you could find yourself in a really sticky situation I think that's what a lot of them saw and so you saw a lot of restructuring happen you saw a lot of companies trying to you know get rid of some of those convertible bonds and that meant selling Bitcoin you saw companies completely exit the space it shows the importance of every decision that you make during those time periods and you know for a company like strive we were I think the only one at the time that came out with an equity only raised and so we raised $750 million of equity capital with no bond or with no bonds no debt nothing else on top of that and so we had the full capacity of our balance sheet free and available to us even as Bitcoin started drawing down it had we elected to take on convertible bonds I think that would have prevented us from being able to issue say it into the market because we wouldn't have had the same balance sheet capacity to do a deal that was big enough and so the one lesson

1:34:51that I think is going to be taken away by every executive that's managing one of these is that your capital structure matters a ton and you need to make sure that you've got enough excess capacity there that's not you're not going to be frozen out of continuing to operate during the market because what you see is the market punishes in activity they hate when you're idle and particularly in a fast moving space like this and so you know we're really proud of the fact that we were able to continue moving on we had the IPO say it oh we had the acquisition assembler we had the follow-on offering of say it oh we got to the daily dividends right we were able to continue working and advancing during that bear market because of that first decision that we made and because of that it allowed us to get the full structure in place that we wanted when the inevitable turnaround and Bitcoin sentiment and the capital flows coming back into Bitcoin when that turned and you're starting to see you know the power of getting that structure right and continuing to build during the bear market right you got to build for the bear market you've got to prepare yourself for the bull market and luckily we've been able to do that so we think we're in a really good position now

1:35:55absolutely you got to you got to you got to prepare yourself to catch the wave before the wave starts breaking right that's that's how I see it building in a bear market that's where the legends are forged that's when the legends are made and that's the most difficult time to build in Bitcoin honestly it's a game of survival the way that I see it but if you survive um you know from from past experiences seeing Bitcoin businesses you'll be greatly rewarded once the bull market comes now then I want to get your take on this because we've actually been doing a lot of coverage on on this and there was multiple different uh financial analysts and and very well respected people on Wall Street excuse me including there was a report released by BlackRock and essentially the TLDR is this a lot of these analysts are making the case that the traditional 60 to 40 portfolio is is I can't say the word uh over oh that's that's politically correct on YouTube um and now

1:36:56they're actually recommending one to two percent uh Bitcoin exposure which I think is is an absolute game changer something that I don't think we could have even wrapped our heads around um uh you know five years ago so what what's your opinion on that and and where does strive fit into that yeah I do agree with that um I think if you look back at the markets here over the last several decades they've been very slow to move right the pace of innovation wasn't anything close to what we're seeing out here today and one to two percent into an asset like Bitcoin I still think is probably low you know it basically just models the scale of the market cap of Bitcoin into a traditional portfolio of equities right it would make up about one percent if you just looked at the total of the equities market relative to the market cap of Bitcoin so that's just keeping a broad based exposure to an asset but I think if you zoom out and you start to look at you know the the looming debt crisis that's out here and some of the actions that are likely to be on the

1:37:59horizon it would seem to me that that mix and that shifting of the mix of the assets that people are holding is going to have to be pretty nimble you know you're going to want to start looking for things that are scarce and you're seeing disruption happen all over the place you know when these AI tools really started accelerating out there in the market you were seeing almost entire business models being wiped out overnight of well-established named companies out there you were seeing market caps getting cut in half overnight just because there was a release that came out of one of these in a large AI shops and so investing has become a very difficult endeavor right figuring out where to park your capital and how long is this wave going to last is a question that's very difficult for investors so I do think that the hunt for true scarcity is going to speed up and I think you're going to see those allocations start to pick up as people start to confront the reality that there's weakness out there and there's likely to be actions that need to be taken that make the dollar far less scarce right there's going to be a lot more money in the world because

1:39:00they're going to have to find ways to print their way out of this and that likely comes with devaluing the currency so you know right now having it at one to two percent you know I think getting that exposure in the early days is good and I think investors then you know when you have skin in the game you start to pay more attention so having any allocation to a Bitcoin style of asset I think is going to be good and it's going to help people to ask the next level of questions as they see it start to perform and go why is this outperforming what is this asset specifically set up to do and for strive you know we hope to fit into those portfolios as an amplified version of that long-term success of Bitcoin that we see coming on the horizon but it's a different type of exposure vehicle than buying just pure Bitcoin itself right you've got to take on you know some of the management the execution respirator all those things are real and you've got to start to understand the capital structure and understand you're taking a more volatile ride than the asset itself but if you're willing to be in position for the long term and you believe in the long-term success of the scarcity of Bitcoin and using that as a store of value or any of the other means

1:40:02you know they're very valuable parts of a portfolio absolutely and I think that's where it makes sense right because again you know if you want to expose you to Bitcoin by spot Bitcoin you know take it into self-cust city so obviously strive has to outperform the price of Bitcoin for it to be for it to make sense for investors but as you said you know that the volatility goes both ways ladies and gentlemen right so you know if Bitcoin drops you know 10 percent again you know you'll see more volatility to downside on on the strive side and then again more volatility to the upside you know if Bitcoin this volatility goes to the upside now Ben you did bury the lead you did say the word early and I love asking this question do you truly believe that that we're still early to to this the whole Bitcoin adoption is there still opportunities for investors because I think that was one of the biggest one of the biggest how was it phrased to me

1:41:05one of the biggest things that I think was questioned during this particular cycle was you know is it over right is Bitcoin done because you know if you look at Bitcoin's performance in 2025 I think it it underwhelmed a lot of people's expectations and the keyword there is expectations I think if you have an expectation in Bitcoin Bitcoin tends to just grind it into small sawdust pieces so you know that's that's my question to you is are you truly still early to this you know everyone has as their own views as to what early means you know you can look at the length of time that Bitcoin's been out there you know I look at it as a very short life and it's well over a trillion dollars in market cap right now and so but I do think that relative to the expansion of the monetary supply that's happening out there that's a very tiny portion of that and so I do believe that we're still early to this and I don't really think we've been confronted with the full weight of the debt crisis that's looming out there right these governments

1:42:10have continued to try to print their way out of all the problems for a long time the growth in the economies isn't really keeping up and so I do think there's a lot of runway here for Bitcoin as a store of value asset but even more than that if you just look at the fiat currencies globally you know you've had this trend over time of a lot of companies dollarizing and you've seen consolidation of those fiat currencies and it's largely on the back end of the currencies that were there before failing over time so you're seeing a consolidation of the number of currencies that's being used across the world and I think with where the world's at today you know we've moved into a much more digitally native world where people are more focused on innovation and lowering friction and transactions and being able to transact globally without you know having to do a bunch of foreign exchange conversions doing all these other things I think that there's a huge amount of growth opportunity for an asset like Bitcoin which is truly the only decentralized asset out there that's available to everybody where you can move value and scale with no middleman I think just if you

1:43:12think of it on that framework alone there's a massive amount of growth potential there now add to that the fact that a lot of people are waking up to the issues that are out there and starting to build on top of Bitcoin you know we're one example of that where we're one company where we all kind of saw a similar problem coming and thought there's a way where we can build the right types of products to effectively offboard the capital from the legacy system and move it into the Bitcoin network and you're seeing more and more momentum there more people are interested in building in this ecosystem and I think that's going to provide the right rails for Bitcoin to really scale and become an integral part of everybody's day-to-day lives and through things like the capital markets it can become a part of their lives without them even knowing it right as these companies get into these indexes and capital flows come in and they're moving that capital into the Bitcoin network there's a massive amount of growth there we're still tiny as an industry Bitcoin's tiny as an asset class out there and so you know for me to look at that and say well you know the growth is over I think that that would be very naive of me because I don't think that we're even remotely to the starting line

1:44:16here of what's going to happen with monetary expansion over time here as these as these issues really speed up so and I do think it's early I think that there's still a lot of runway here and there's a lot of future opportunities and my hope is that we start bringing a lot more talented minds into the space that want to put their time and their energy into building on top of the Bitcoin network and creating those rails that's going to make this frictionless across the world. Right so you don't believe in diminishing returns is that's what I'm hearing well you got to ask yourself the question if you go out and you you know look at the US debt and the hockey stick that that's doing do you see that slowing down or speeding up? I don't I'm not a believer in diminishing returns. Someone had a quote once that said you know Bitcoin doesn't have a price it has an exchange rate right and I think that that's how I think a really good way to think about it because if you've got something like the dollar where you know their solution to solving most of these problems is creating more of it and devaluing it you know the exchange rate of Bitcoin's going to continue to go up in that model so you know if the dollar has

1:45:19if they're not going to find a way to stop printing the dollar I don't see a way that that exchange rate goes down you know Bitcoin is such a unique and verifiably scarce asset that I think to be able to overlook the value of being able to transact with it globally and frictionlessly across the world I don't think you can overlook that it's too powerful and if I was a country out there that was reliant on something like the US dollar and you see a lot of countries that are still holding things like gold in their reserves you started hearing more rumblings about you know assets like Bitcoin I think that even if I was just looking to protect my own nation from potential mismanagement of the dollar or the euro or any of these other major currencies I can only see one asset that's out there that's you know truly decentralized that I can transact significant value in that I can hold in my own barricostity and I would want an allocation to that just to protect myself from the mismanagement of other countries where I have absolutely no control but it has

1:46:20massive control over the economy within my own borders I think that that narrative is going to start picking up steam and even if it's done as a protective measure it'd be very difficult to see countries not allocating to this and companies doing the same thing right it's the same reason there's a lot of foreign exchange risk out there that these companies are taking in their commerce and so I think that assets like Bitcoin that can take some of that risk out and you can trans you can exchange it into whatever currency you want to be I think there's a huge amount of value there that hasn't really been tapped out absolutely and just to put some data up on screen so you guys you know could see what we're talking about this is the US the US debt clock it's a very famous website currently $40 trillion in debt yeah but the bigger number US total debt 115 trillion that one's even crazier yeah and then and then there was a there was a statement by President

1:47:21Trump yesterday at the RNC where he was basically making the case that you know if the Republicans went to house on the Senate in the upcoming midterm election he's promising everybody like $5,000 which is another trillion dollars it would add immediately another $1.5 trillion to the debt so my question to you what the trillion dollars amongst friends right exactly now it's just getting thrown around it's gonna add one Bitcoin market cap out there at the start of the app for real exactly so Ben my question to you is when do people start realizing the the unsustainability of this you know like obviously in the BlackRock report that one of the big talking points that they used was referring to this unsustainability and why Bitcoin is necessary in in in in your portfolio so when do you think is that catalyst moment where people really wake up because it seems you know

1:48:26like they continue to perpetually kick this can down the road and it seems to continue to be working right so what what is that catalyst for people really to open their eyes and say wait a second um I don't really like this this this this doesn't look very healthy to be honest I think a lot of people are in that position right now where they're already not liking this right you go to the grocery store and you immediately know that something has changed for the worse right it doesn't matter what the CPI numbers come out at when you're out buying goods and services out in the real world you notice that there's been a drastic increase in the cost of living out there and but I think the problem is you know guys like us have the luxury of being able to hyper focus on these issues and analyze these issues you know most people in their day-to-day lives they're trying to keep the lights on they're trying to buy groceries they're trying to but they're kids through college they're trying to buy car they're trying to do all the things just to you know live a normal life they're so preoccupied you can't be worried about you know how they're managing fiscal policy so I do think that it is going

1:49:28to take some time and I think it really takes a community effort of showing people that there's a solution right you have a better way to save and you got to help bring people to that but you need to do it in a way where you're meeting them where they're at and you know I think that when I think about the products that we're building you know one of the reasons why I think SADA has been successful and stretch has been successful is because there is a need for real yield out there in the world right if you're out buying treasuries and things like this you're likely underperforming the expansion of the monetary supply so you're losing real value there so being able to provide rates like you know a 12 or a 13 percent yield as a real positive yield to the investors and I think a lot of people need that and a lot of people need cash flow and so we found that as a very valuable product we could offer to the world but I think that the other side of this is when you have corporations that have these large allocations to Bitcoin and a significant portion of their value is made up from their balance sheet and the Bitcoin holdings that they're having there as more and more of these companies grow and scale and start getting included into these indexes you realize how much

1:50:33capital is allocated to passive indexes right a lot of people are not you know out here clicking picking their own investments all the time and so they're just buying these broad based buckets of assets and as these companies with Bitcoin as Bitcoin continues to perform in the balance sheets expand in their weightings in those you know indices start to expand as well people are getting more Bitcoin exposure without even knowing it right so it's providing another layer of protection into their investments and so I do think that there's a huge amount of value in what we're doing through the capital markets by being able to be included in these indexes and being included in these passive funds that people are holding in their retirement accounts and with those allocations growing it helps to bring you know more of the value of that scarcity into their portfolio but as a community we've just got to be really good about continuing to spread the word and making it safe for people to ask questions you know I think for a while we we did ourselves a little bit of a disservice when we got too rabid around Bitcoin and deciding who was a Bitcoin or who wasn't a Bitcoin

1:51:33or what were the criteria and I still to this day don't know who holds the pen on what a Bitcoin or is a formal definition but even if you look at like Elon when he was holding Bitcoin and they sold some of the Bitcoin and he was getting publicly ridiculed and you know a guy like that doesn't need to be owning Bitcoin right now and so I think we do have those periods where we've done ourselves some disservices and we need to kind of open those doors and let people find Bitcoin where they're at find the way that Bitcoin fits into their world the best into their financial picture the best and then just encourage them to continue asking the questions and continue to explore it because eventually when you go far enough down that rabbit hole you find the problems and you start to understand what the solutions need to look like and you realize that there is a serious lack of solutions out there and right now Bitcoin seems to be the best one that we have absolutely and one of the things too about Elon that I find ironic and I tweeted this out by the way Ben and I got so much heat I'm like guys Elon's a Bitcoiner SpaceX is the seventh largest

1:52:35Bitcoin treasury company in the world right so whatever your definition of a Bitcoiner is like SpaceX is SpaceX technically is a Bitcoin treasury company right definitely but I do want to talk about I do want to talk about the highly successful SATA product that you guys released right so the current dividend rate is 13% annualized I think what differentiates you guys is the payout frequency is every single day and you guys have successfully held near it's a hundred dollar par value could you talk a little bit about that because you know it almost sounds a little bit too good to be true I'm not going to dox you but I have a really good friend that works in a very very large bank here in the United States and he's kind of like part of the upper management

1:53:37and he was like pitching me on on some type of product he was like bringing me into his office and all that stuff and I think he was saying like like Nico it's you know it's like it's a good return it's like five or six percent and I'm like well this is what these guys are offering you know so how is that sustainable like where does the yield come from like 13% is a very large number and can I add in here Ben before at Nico's question as well but I think our audience their hardcore Bitcoin Maxis so the whole like digital credit thesis idea I think they're just instantly kind of like have this bad taste in their mouth so could you explain just the digital credit aspect of it's like what is it and how is the market responding to that and then answer Nico's question of like where's the yield coming from yeah a lot of questions baked in one there yeah yeah I'm not that way no no you're all right when you think about these products and I'll actually start you know these are more structured to be fixed income right so these are not meant to

1:54:40be Bitcoin exposure vehicles like the common equity is these are meant to provide people with stable income streams and they have some of the governance teeth in them that make them more debt like the equity like which is really where that term digital credit came from right these are hybrid style instruments and when you think about the thesis around these you know the first thing that you have to have a belief in is the long-term success of Bitcoin right obviously the entire collateral backing the capital base underpinning these is Bitcoin and what we're effectively doing at the most simplistic manner is putting on a carriage right we believe Bitcoin's going to appreciate more than the cost of capital that we're putting into these products and we believe in that thesis over a long period of time right six months nine months one year does not you know define success or failure in these products and so we look at it and we take a 13% cost capital which is very attractive out there in the market it's very difficult to find anything that can provide those types of yields and we take that capital and we put that capital into Bitcoin and when you think

1:55:43about the thesis you need to think about over time if I took the money that went into the Bitcoin that we purchased and we carved off a small amount of it to pay these dividends month after month would we be net outperforming our cost of capital on that our view is absolutely yes you know we talked a lot about a lot of the macro factors you know given the setup that we're seeing out there you know broadly I actually think that when we talk about you know 20 to 30% returns we might be undershooting it for what could happen here over the next decade or two and so we're completely happy taking on the risk of having a higher cost of capital attracting a lot of capital into the instrument that we can put into Bitcoin and hold on our balance sheet because we think the appreciation of that asset is going to outpace our cost of capital substantially right and that value compounds over time and so that's the most simplistic way to think about those digital credit instruments you know I think because they're novel and they came out in a structure a lot of people weren't familiar with preferred equity versus common equity I think a lot of people are getting a PhD in capital structure by watching what's happening in the treasury sector here you

1:56:47know you start to learn about things like seniority and where you secured an accreditor list of the event that something went wrong and that really does come into play with getting investors comfortable because the people that are buying a product like SATA are not the ones that are ready to stomach the volatile ride of Bitcoin let alone stomach the volatile ride of you know a common equity that's amplified Bitcoin right those are very different risk profiles and not everyone's condition to ride that volatility and I've never once heard a person come tell me you know I was trying to decide between buying Bitcoin or buying digital credit and I chose digital credit right they're very different investment thesis but you can have a belief in Bitcoin and not want the volatile ride we'll absorb the volatility on our balance sheet so we can deliver to you stable income streams and that's highly valuable out there in the market it's going to allow us to onboard a lot of capital into the Bitcoin network and so we think that that's one of those products you know that Bitcoin makes possible right it's possible because of that future performance of Bitcoin to put this

1:57:50structure in place and to take that directional bet on Bitcoin which we are and our investors are very aware of that that that is the risk that you're taking on yours you are taking on Bitcoin risk but I'm so we're flattening out the volatility we're providing a buffer under there with the common equity right which is there to absorb losses and the events something went wrong we hold the cash buffer in place you know we've got 18 months of dividend reserve out there which allows us to effectively ride out which you saw is kind of the longest bear market of Bitcoin's history and what that would mean is all capital markets activity close off right we wouldn't be able to raise a single dollar of you know equity capital we wouldn't be able to raise a single dollar that capital anything and we just had to pay dividends we'd be able to pay 18 months of dividends straight right that's the importance of that it provides that shock absorber and gives the market the understanding that we can continue to operate this we can continue to pay those yields even if the markets really got shaken and for some reason we weren't able to raise a single dollar of capital which has not been the case in this entire bear market by the way so that reserve likely in practice goes a

1:58:54lot further than 18 months absolutely I think you know to simplify to the audience right which is like if you expect Bitcoin's Caguar to be you know 20% 25% for the foreseeable future obviously you guys offering a 3% 13% yield right and then that difference right but it comes with volatility right that's the thing like it comes with the ebbs and flows the downs and ups so you guys shoulder that yourself so you guys manage it you guys have a very large runway as you as you were describing and then you essentially take away the volatility from you know the purchaser of of of of of of the product and then you know they get that consistent daily payout you know so it's it's a it's a very interesting product that I think it's not for everyone on the show right hardcore bitcoins in the show that like self custody or nothing but you know it is for certain types of investors that

1:59:57want that consistent yearly return which I think you guys have been delivering so complete you know and it will be the first ones you know to go out and advocate for Bitcoin and self custody I think it's one of the things that makes Bitcoin the most unique asset on the planet yeah it's so you know it's not that we're out here telling people to you know not on Bitcoin and just on securities even we don't believe that right we believe that these fit certain needs and you specifically have a lot of the institutional allocators where they've got charters that restrict the type of investments they can make right so for some of our large shareholders this money they're putting into these types of products is never going into Bitcoin and so this is a way for them to get exposure because they can buy equities they can buy fixed income products and so you know these are not replacements for Bitcoin right it's our belief in Bitcoin in the long term success of it you know we want to support Bitcoin adoption as much as anybody because it's crucial to the long term success of our model as well and so I don't view them to be in conflict I think that's a narrative that got

2:01:02spun up out there and I understand that there's you know views where it can be only Bitcoin and anything else is you know just paper or whatever but I see this fitting a direct need for people in their lives where they're at today and not everybody has the luxury of being able to ride the volatility the time to focus on putting in a robust you know self-custody setup I think that's something that comes with time and what we want is to take Bitcoin and move it closer to people so they start asking the questions about if it works for our model if it makes our securities work and perform well I want them asking the question of why what's making that possible because it's Bitcoin that's making that possible right without Bitcoin and without the success of Bitcoin you know our model wouldn't work and so I want them to see that performance in their portfolios and go if that asset works for them why don't I own that asset and the answer is you should I believe everyone should hold Bitcoin I believe everyone should a Bitcoin in self-custody right it's one of those truly unique things you can do here that you can't do anywhere else so I just have a different

2:02:05approach I can do a rod topic for people and the shape of innovation doesn't always match people's own ideologies and that's fine right everybody that's that's the beauty of freedom as everyone gets to pick their own flavor of this but I see the value of this I speak to the investors that see the value in this and you know I see us bringing billions of dollars of capital into the Bitcoin network is being a net positive for everybody in the ecosystem regardless of your ideologies I 100% agree with you and I think I think it's a little bit naive from the Bitcoin community not to like if you want Bitcoin to become you know this global reserve asset right you're going to have different types of adoption right Wall Street's going to get involved nation states are going to get involved at some point some central banks have already gotten involved right and they're all going to see Bitcoin in a different way and that's the beauty of Bitcoin right it's it's different to your particular situation now then final question it's been fantastic to have you on the show

2:03:07for the first time before you lost your Bitcoin and a boating accident did you hold spot Bitcoin? Definitely I love it my Bitcoin journey is a long one I've been around since 2013 I've been on this volatile bucking Bronco here for a long time but there's nothing I love more and the fact that I get to do this for a living now and spend all my waking hours you know thinking and building around Bitcoin is a total dream come true here so you know this is this is the best base in the world to be building and I hope more people take that to heart and you know build on Bitcoin and build the better future we all want to see absolutely Ben thank you so much for joining us on the show really appreciate your time hope to have you again on in the future this is a great fan this is a great conversation I really enjoy it guys before we wrap up I do want to give a shout out to our sponsors Ben thank you so much for joining us I really appreciate it thanks guys all right everybody so I do want to give a shout out to the best place to buy automatic self-custody who am I talking about the

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2:06:20all right everybody that was our show thank you guys so much for tuning in we really appreciate it we love you all smash the like button consider subscribing and we'll see you tomorrow for a brand new episode of simply Bitcoin live this episode of simply Bitcoin live was brought to you by let him don't sell your Bitcoin get a Bitcoin backbone at let him dot IO