Jack Mallers Reveals Why 50% of Bitcoin Holders Are Underwater Ahead of Dec 1st
Summary
Market Outlook: Guest argues we’re at the bottom of the liquidity cycle with QT ending, QE resuming, and rate cuts coming, framing current weakness as a buy-the-dip setup for hard assets.
Bitcoin: Pitched as the best expression of fiat debasement and a real-time index of liquidity, with the view that long-term holders should accumulate into volatility.
Gold: Presented as a complementary hedge to Bitcoin, making new highs as it “sniffs out” sovereign debt risks and the inevitability of monetary easing.
Bitcoin ETFs: Discussion highlights basis-trade dynamics (spot ETF vs CME futures) driving flows and outflows, while endowments and pensions accumulate for the long term.
Corporate Treasury Models: Contrast between leveraged approaches like MicroStrategy (MSTR) and a cash-flow-supported accumulation model; Coinbase (COIN) cited as a crypto business rather than a pure Bitcoin play.
Tether Strategy: Tether’s push into gold royalties and Tether Gold seen as building a “stable company” collateralized by gold and Bitcoin, potentially enabling commodity settlement rails.
Bitcoin Lending: Strike’s Bitcoin-backed lending is portrayed as the next major utility, enabling liquidity without taxable events and seeding broader credit markets on Bitcoin.
Risks and Positioning: Near-term volatility from option positioning and basis unwinds acknowledged, but whales and some sovereigns are accumulating, supporting a constructive medium-term view.
Transcript
In focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. All right, Bitcoin is trying to find its footing after one of the sharpest reversals of the year. Now, earlier today, it slipped back into the high $80,000 range, but at the time of taping, I mean, it's recovered back above $93,000, and it's still nearly 25 30% below the October all-time high, but it has effectively erased some of the Bitcoin gain. obviously for 2025. Now, ETF investors are underwater for the first time. Corporate treasuries, including strategy, Euro preferred now trading below par, really feeling the pressure, and at the same time, long-term holders and sovereigns, they're quietly accumulating into the weakness. Now, this is the biggest structural test of Bitcoin's institutional error since the ETF launch. So, today we're focused on one question. Is Bitcoin breaking down? Are we resetting for what comes next? Are we buying the dip? Of course, joining me now is Jack Mer, CEO of Strike, co-founder of 21 Capital. Uh Jack, great to have you on in this moment. >> Good to see you, buddy. Thanks for having me back. >> Always, always. Okay, lots hitting right now. I mean, obviously, it's a volatile market, but we've seen this thing go from, you know, 89,000 to 80 93 just as you and I have been chatting. I mean, you know, we Let's talk about the moment that we're in. We we saw that fall, it snap back. In your view, what is this moment? I mean, is it a healthy reset after October's euphoria? Is it the start of something deeper? I I think broader markets in risk are selling off just generally speaking. Bitcoin tends to lead that because Bitcoin tends to be one of the only accurate smoke alarms for fiat liquidity we have left in the world. And I hold the thesis that that's because Bitcoin is the only truly free market that we have left in the world. But what I think markets are going through right now is really trying to digest what has become a complicated liquidity situation. So, you know, I actually as preparing for this show, I pulled up my US liquidity index. Uh the US liquidity index that I look at is down 10% a little over now over the last six months. So I think the story is this Trump administration came in, they campaigned on lots of liquidity, re-industrialization, lots of GDP growth and that narrative was a little confusing with Elon Musk and Doge and that Elon Musk was going to send us into austerity by running the US government like a lean startup. And then that didn't work. And then we had the trade wars and we had liberation day. And after liberation day, uh there was taco. Trump always chickens out. And the markets then front ran liquidity. You saw Bitcoin separate and frontr run what the markets assumed to be more liquidity coming. That there was going to be a truce with China. Tariffs were going to be a little bit more mild than they were advertised to be and that the US would find a way to work with the Federal Reserve and re-industrialize this country and print lots of money to make whole on the promises of the campaign. And I think that hasn't happened. Uh mo most specifically that I I want to highlight is in September the US government ran a $200 billion surplus. So that is an annualized surplus of over two trillion and then in October the government shut down. And so this has been one of the tighter liquidity periods for markets generally. I think the combination of AI this administration and the lack of liquidity followthrough markets are just trying to wrestle with. And so Bitcoin is correcting back towards where it was before this administration got going because it's unclear where the liquidity is going to come from and when it's going to come. >> Yeah. Yeah. I mean when you you know when you say the narrative was confusing I mean confusing for who? Because was it was it kind of talking about that institutional positioning maybe retail expectations or or the fact that Bitcoin was being treated like a tech stock one week and I mean a safe haven the next because confusion usually means mispricing and if the narrative wasn't clear that you know does that mean that Bitcoin obviously got ahead of itself and that this pullback is just a market correcting bad assumptions. I think it's confusing I meant on behalf of the administration of the Trump administration. So the Trump administration came out, we're going to re-industrialize. We're going to print a lot of money and make America great again by bringing back. But the way I think about the United States is China has disrupted red America and the internet has disrupted blue America. And they both kind of fight these enemies. And Trump came in and said, "We're going to fight China by re-industrializing." And that implies a lot of money printing, a lot of stimulus. And that hasn't happened. And then there was a lot of confusion of, well, how are we going to achieve that if Elon Musk is going to send us into austerity with Doge? How are we going to achieve that if we can't agree to terms with China? And so there's been a little bit of confusion of what side are we playing on? Put up or shut up. Are you going to print the money or not? And that's where the confusion has come from. At the end of the day, to me, Bitcoin is priced on future expectations of fiat liquidity. Period. Bitcoin is the antithesis of fiat. Fiat has no supply cap. Bitcoin is finite. Fiat can be censored. Bitcoin can't. Fiat cannot be audited. Bitcoin can be audited by anybody. And so Bitcoin is the best expression of fiat. And so if there's tightening of fiat liquidity, then Bitcoin is going to be the smoke alarm that shows us that. And so I actually put out a post on X over the weekend where I said gold making new highs this year shows us that governments and central banks have to print, but Bitcoin falling from highs right now shows us that they might have a liquidity crisis before they're forced to. And so I think the two market the two assets play different roles and that Bitcoin is a very accurate smoke alarm of where liquidity is today or then the gold market is sniffing out where this is inevitably going right we know QT is ending QE is going to have to restart rate cuts are coming and there's all sorts of stimulus whether it's Fanny May Freddy Mack a housing crisis to be to be declared in 2026 so I see this as a buy the dip opportunity the way to monetize a currency failure is to not bet that the stock market's going to go down 50% like Michael Bur and have your fund shut down. The way you do it is by owning a better currency than the dollar which would be something like gold and bitcoin. So this is a buy the dip opportunity for me. I think liquidity has to come physically. There is no other option and uh this is just a mere reaction to the lack of follow-through from the administration. >> Okay. It's interesting. I mean if if you know fiat's tightening this aggressively, shouldn't Bitcoin be benefiting as the alternative you know monetary asset? Instead we're seeing Bitcoin fall almost one to one with the tightening. How do you explain the disconnect? >> Well, you know, Bitcoin has been and and I'm not saying that this is how I value and view Bitcoin, but historically, Bitcoin has been some combination of a hard money alternative, a neutral reserve asset like gold and technology. You know, you can make the argument that Bitcoin's macro uh thesis or macro value is that it is technology plus fiat liquidity. And so, it's been relatively correlated to the NASDAQ with the properties of gold. And so the market is still trying to figure it out. But the way again I would encourage everyone to pull up a liquidity US liquidity index chart and a Bitcoin chart and they're relatively correlated which is I think what we all want. We all want the best expression of fiat debasement that we all want to own something that is the opposite of someone being able to print time and energy uh out of a central bank while I have to get up out of bed and work work for the currency. Uh and so I think the market is still maturing in its ability to price Bitcoin. Uh gold is definitely leading in where the world is going. Um and Bitcoin is acting more as a real time index and how that progress is working towards the inevitable future which is we're living through a sovereign debt crisis. I mean at the end of the day that's that's the problem is that these sovereign nations are in way over their head and uh gold is sniffing that out. we're going to have to repric the world around us in a significantly weaker dollar and Bitcoin is taking us along that journey. But in part of the ex you're you're exposed to more volatility with Bitcoin. You're exposed to more of the extremes, but that's to both the downside and the upside. And so, you know, to each their own, I I prefer owning the best performer. Um, and so these are buy the dip opportunities for me. and 25% off highs during a liquidity crunch with a government shutdown and is reporting surpluses and $200 billion. That's no problem for me. >> Yeah. Yeah. You're not panicking. I know. I don't see any sweat there. I mean, everyone everyone does want to know. I mean, I put out something on X this morning. Everyone wants to know the same thing. I mean, not the number, but the kind of the conditions. I mean, what has to happen for Bitcoin to bottom? Is it ETF inflows returning? Is it that macro stability? Is it for sellers wash out? or does spot demand need to kind of return or or has it bottomed out here? Right. >> We could be. Listen, could Bitcoin go to 85 80? Probably. But, you know, I think there's there's two things. There's a really healthy cleanse of narratives within Bitcoin. I think that there was a lot of the narrative was ETF institutional demand. Well, a lot of the ETF flows are the basis trade is, you know, arbitrageing futures with the ETF. And then there was the Bitcoin treasury narrative which we can talk about is I'm the CEO of 21. We're not a treasury company. We think we're substantially different than that. But there was this idea that institutions were gaining exposure to Bitcoin through these Bitcoin securities and that there was an MNAV premium to that. And a lot of that's unwinding which I think is very healthy. And so I think we'll find a bottom when the market realizes that Bitcoin doesn't trade in four-year cycles and that a lot of the institutional narrative was a little bit overblown. But right now, people are freaking out. Oh my gosh, these institutions, they're unwinding from their ETF positions and they're unwinding from strategies MNAV trade when in reality, I don't think it was ever really there at the size and scale that it was purported to be and that the narrative conveyed and that Bitcoin doesn't operate on four-year cycles like uh you know, like horoscopes, like it doesn't align with the stars. Uh it operates on expectations of fiat liquidity, which is what it was designed to do. And so I think once the market relaxes, calms down, then we move on to this next chapter of liquidity. I mean, we're hitting the bottom of the liquidity cycle. That's what I would say here on Kitco. I'm not going to call any Bitcoin bottoms, but QT ends. It's November 18th. QT ends December 1st. The Fed has said they're going to have to start expanding the balance sheet. Just for context, peak Fed balance sheet, we're at $9 trillion. Now we're close to 6 trillion. That is an insane amount of tightening. Never have we tightened more. People often say, "Well, if China and Japan sold all their US treasuries, then we'd really be in trouble." China and Japan can both sell all of their treasuries at the same time, and they wouldn't have that much impact that the Fed has had over this over the course of this tightening cycle. And that ends in less than two weeks. And so, tightening is over. QE is resuming. Rate cuts are coming. And there's all sorts of stimulus that is coming from the Treasury Department, whether it's Fanny and Freddy May, deregulation, stimulus checks before midterms. And so I think we're bottoming out in the liquidity cycle. So Bitcoin is really figuring out its identity, understanding that these Treasury MNAVs might not have been the right narrative that understanding the ETF participants, and I think liquidity will resume, will turn up, and Bitcoin will be the best expression of that. That's That's my the prediction I'm willing to make on the show without you pinning me to a price. >> All right. All right. I like it. No prices. Okay. Well, there's obviously some tailwinds fundamentally. Obviously, you're talking about the debt in the US. It's continuing to to grow, but we got to talk about those ETFs because you talked about I mean, outflows for November now total about $2.8 billion. The weighted cost basis on ETF buyers around $89,600 is kind of below not really below market, but I mean right there. And we've seen ETF holders kind of underwater for the first time. It made a lot of people nervous. Did ETFs make Bitcoin more fragile in moments like this? No, I don't think so. In fact, I think the opposite. But there's two real core narratives that the market needs to digest in regards to the Bitcoin ETFs. One is this basis trade. So, you're seeing large banks like Goldman Sachs or trading firms like Sesuana, what is reported as massive Bitcoin positions. and maybe they are taking a directional position on Bitcoin, but the reality is they're running this basis trade where they're able to buy the Bitcoin spot ETF and sell the futures on the CME and capture a spread. And if that spread is returning them more than Fed funds, then that is the equivalent of better risk-free returns for these capital allocators. And so what looks like massive ETF inflows is actually also realized as sell pressure on the futures. And so there's been a misguided narrative that Goldman Sachs cares about Bitcoin just as much as I do. I don't think that's true. I think that they're trading a spread and they're making these markets more efficient. However, it is true in other circumstances like we've seen Harvard. Harvard has one of the largest Bitcoin positions of any endowment in the world. I think it's one of their largest ETF positions within the endowment period. Now, those positions are real. And the really important part, Jeremy, is there's been more Bitcoin OGs of folks that, you know, have been sitting on thousands of coins for over a decade that have been realizing profit. And so actually more than 50% of Bitcoin that has been acquired is underwater right now because there's been a massive rotation of a lot of folks almost think of it as an IPO moment where lots of early investors are realizing some liquidity and some gains and a lot of the folks like Harvard, like firefighter pensions, they are actually using the ETF to soak up a lot of the liquidity. So I would say it's both. Part of the outflows that you're seeing is because the basis trade is no longer returning more than Fed funds. And you see this kind of cyclical wind and unwind, wind and unwind. And you can track that just by how profitable the basis trade is. But what's encouraging is all the endowments and the pensions that are buying for the long term and treating Bitcoin like a hedge against future fiat debasement. >> Yeah. Interesting. I mean, it's it's kind of dangerous, right? I mean, we've seen the movie before. When too much leverage piles into a basis trade, it looks like, you know, great, right? And until liquidity vanishes. I mean, you're not saying Bitcoin is kind of exposed to the same structural risk that broke the Treasury market back in 2019. >> No, no, no, not at all. I mean, these these markets are fairly standard and fairly simple, right? You're taking a, you know, a neutral position on the asset and you're providing liquidity and efficiency to the marketplace. I would argue that it's not necessarily a bad thing. It's good that we have really efficient liquid markets. So that I mean Jeremy, we saw someone sell 80,000 Bitcoin in one day and the price didn't move. And so it's really good that we have highly liquid markets. That's what you want out of a neutral reserve asset is salailability, liquidity. So it's all good. It's just the market needs to digest kind of what's been liquidity dislocation. There's been a lot of campaigning and future promises on printing money, re-industrializing, ending QT, starting QE, go go go, and then we ran a surplus, and then the government shut down. And then, well, who's actually net long these ETFs? How important is the basis trade? Well, what are these treasury companies? I see the market just gathering itself a little bit, which is obviously if you believe in the thesis that currencies have to continue to be debased and the sponge of sorts to to absorb the excess liquidity that sovereigns have to print is going to be gold and bitcoin. This is a a great opportunity to add to those positions. I think it's really that simple. >> I I got to ask you, I mean, you know, when we're talking about the Bitcoin basis trade, it's kind of being artificially inflated because the futures market is over financialized relative to spot. I mean, would you support regulators tightening leverage limits for hedge funds running this type of trade? >> I mean, to be honest, I'm a free market guy. Like, it's hard for me to advocate for the perfect amount of regulation. I I'm more libertarian than anything else. I'm not really into politics, and I think less regulation is better. Humans are plenty capable of governing themselves through the free market and having to realize consequences of the decisions they've made. So, >> we're living it. We're living it live right now. Jack, but would you support would you kind of support a redesign of of a Bitcoin ETF, for example, requiring 100% spot backing and no rehypo hypothecation? >> Sure. Absolutely. Yeah. And and what I would support the most is a free market where all these products can compete against each other and let customers choose what do they want. Do they want more comfort in knowing that there's no rehypothecation? Would they want cheaper pricing? And I think the market will inevitably get there, unfortunately, because of, you know, politicians and overregulating is what we tend to do. It becomes really bureaucratic and slow, but free markets are the best way to govern a society and a marketplace. And and we'll get there, and that's what I advocate for if I were in charge. >> I was reading, you know, some some stories this morning, and they're talking about how option traders are loading up on the 85 and $80,000 strikes. I mean, how much of this move is is real fear and how much of it is option-driven structure and, you know, positioning? >> I think that's what the market has to figure out. And for someone like myself, I don't really care. You know, the really cool thing about this is if you have a low enough time preference, none of this matters. I mean, the US the financial system is going to collapse if they don't provide the liquidity to keep it going. And we all know that. The question is, are we going to need a bank collapse? Is someone gonna have to blow up in the repo market? Is the stock market gonna have to go down 20% like during liberation? I mean, liberation week where we all felt so awfully liberated. I mean, everyone thought it was a great depression and then markets rallied to all-time highs only weeks afterward. And so, the question is it's a when, not an if. Now, short-term speculators, that's not me. That's not my game. Um, what I do think is important is that markets really flush out a lot of the narratives that are maybe inconsistent with the truth. And that's what I find encouraging is that I think Bitcoin is going to really find its identity. I was also just because I was curious looking up Google Trends. How popular is Bitcoin right now? And it's at its lowest level over the last, you know, 3 to 5 years. And so I think Bitcoin is going to really grow into a natural truthful identity on the back half of what has to be an incredible amount of stimulus from sovereigns. >> Yeah. Yeah. Well, I mean certainly when we look at the markets today, the AI trade, I mean, you know, there is a little bit of volatility. I mean, the greed and fear index is extreme fear right now. But I want to hit on another story because corporate treasury obviously these Bitcoin treasuries are under a lot of stress. Michael Sailor's 10% euro denominated series A preferred stock was sold at 80 cents on the euro. Two weeks ago today, it trades around 78. In strategy just bought eight uh what was it? $835 million worth of Bitcoin in 7 days. well funded by that issue. How much stress is this putting on that treasury model? This Bitcoin treasury company model. >> Yeah, I mean so I'm co-founder and CEO of 21. Um we expect to be approved shortly on a public stock exchange where that we can list the stock publicly. And you know part of the reason and why we founded the company is we feel like we can represent Bitcoin slightly differently in the capital markets. We look at this spectrum of maybe on the far one side there's a strategy which is just self-described as a treasury company that does lots of financial engineering and then on the other side of the spectrum maybe there's a coinbase which builds you know cash flow forprofit products that then they use to give investors exposure to bitcoin. We think we can live somewhere in the middle where we are not as sold on these preferred equities. We don't totally understand why um if we are a company and we buy Bitcoin that that Bitcoin would be worth twice as much on our balance sheet as if it was on an individual's checking, you know, Fidelity account. Um and so we're kind of live in this middle ground where we're going to build financial products and turn profit and have loads of cash flow whilst also optimizing to be capitalized on Bitcoin as a treasury business. So my opinion on the preferreds, you know, I I think that they add a lot of leverage and a lot of pressure to the MNAV itself because if you are signing yourself up for uh financial obligations in the future, like you owe the world, you owe anyone in the world 10 a.5% forever on any amount of money that they want. Well, the only two ways you can finance that if you don't have cash flow is either through selling your equity or the Bitcoin that you have on the balance sheet. And so for us, it's always been dubious. How do you not put an immense amount of pressure on the MNAV because you're affecting effectively adding leverage to the MNAV? You're saying that the MNAV is implied to have a substantial premium which makes that dilution worth it. But if that's not the case, then you have to start selling your Bitcoin. And so our opinion has always been that's not where we want to live. >> We don't consider ourselves a treasury company for that reason. We want to be a combination of, you know, the best parts of Coinbase and the best parts of Micro Strategy. And I think the market is flushing out and figuring out well what exactly are these things and how do we price these securities because clearly the market doesn't agree with the fact that there's a deserving MNAV and that you know that leverage on top of the MNAV needs to be realized as true and that MNAV has fallen to one or sometimes below one. And so the question is if you have all sorts of really expensive financial obligations in the future, how are you going to finance that? Um, and so we want to be the the Bitcoin company in the capital markets that can explore leverage, can explore a treasury business, but afford it with cash flow as opposed to things like dilution or having to uh sell Bitcoin off our balance sheet. But we'll see. Obviously, Michael has been a pioneer in the space and uh maybe he can figure some things out. You know, he's a self-described financial engineer. But um to date, I think that's what the market's figuring out. And yeah, there's a lot of pressure on these MNAVs because there's future financial liabilities that rely on them to to get paid. >> Yeah. Yeah. So, so to be clear, Jake, I mean, you're saying strategies model depends on perpetual leverage while 21's model depends on perpetual accumulation because those are two very different philosophies. >> Yeah. I think, you know, this could sound extreme or or sound like a dig, but you know, it's not. We want to be the treasury company that can afford it, right? We, you know, if you look at Tether and myself and our leadership team, so I co-founded the business with Tether. Our largest outside investor is SoftBank. You know, we have what it takes to build massive cash generating businesses within the industry. Strike is one of the most profitable per employee Bitcoin companies in the world. Tether's probably the most profitable per employee company period in the history of mankind. So, we have lots of ideas and lots of future plans to build cash flow within the market that gives investors an ability to participate in Bitcoin story through an operating business. And then conversely, we're already the third largest corporate holder of Bitcoin. We will be able to add to that position substantially once we're approved. And we want to be the largest holder of Bitcoin. And we think, you know, we can take the best of what strategy is, which is a large Bitcoin holder and ability to accumulate, whether it's through monetizing volatility, cheap cost of capital, access to the capital markets, and the best of someone like Coinbase, which is a first mover and a leader within the industries they focus, which Tether and I have been in our careers. So that's us. We do not necessarily want to add leverage to something like our MNAV. We do not want to add leverage to our common equity necessarily. That puts a lot of pressure on future dilution and shareholders to have to finance you know we don't want new investors being responsible to finance you know existing preferred owners uh necessarily unless you know we're missing something and if we are we're going to copy Michael Sailor but so far um we're we're kind we're watching closely and uh have have more of a directional focus on on maybe optimizing for for cash flows that would finance something like uh convertible bonds that we would raise in the future. >> That's interesting. Yeah. No, I mean the differentiator is there. I was I was talking to somebody this past weekend and they said, you know, are these corporate treasury companies just turning into leveraged Bitcoin ETFs? >> Yeah. But the the interesting thing about that question is there are leveraged there are leveraged Bitcoin ETFs. If you want to leverage a Bitcoin ETF, you can do that on your own. And so the question is, you know, at 21, what can we provide the market that others can't? And I think the very obvious answer is not everyone is tether, not everyone has been in Bitcoin 13 years, not everyone has founded Strike and not everyone is SoftBank. And so we plan to provide our goal has always been be the best way to participate in Bitcoin's story in the capital markets. We think we can bring both blue chip credibility and startup upside to the capital markets. And we feel as if that was missing. You know, Coinbase we don't think is a Bitcoin company. We think they're a crypto company. and strategy does not have Bitcoin native cash flow, does not build Bitcoin products and is relying on as far as I can tell and again I know I'm going to get all sorts of stuff from um strategy shareholders and it's not my intention but I'm just trying to build a delineation of there's you know being levered with expectations of financing it through common equity or through Bitcoin sales versus being able to build a business alongside it that can optimize in in being levered and being more aggressive in Bitcoin exposure. You know, that's where we want want to live. >> Yeah. Yeah. I mean, so would 21 Capital ever issue debt or preferred stock the way strategy kind of just did or are you trying to build the first sustainable Bitcoin treasury model, not that leveraged one? >> Yeah. So, we've already raised a convertible bond instrument. Uh, and so that's certainly within the reigns and I would say, you know, we we have a culture never say never, right? again um part of our our culture not only at 21 in Strike but also in Bitcoin is stay humble and stack sats as they say is you know within Bitcoin you're not the main character you're not the all knower of the universe uh learn and so we're watching the industry but I would say as of right now um these preferred equities you know you know owing 12% forever um that's a really expensive bill to pay um especially if I have to pay it through dilution or through my Bitcoin holdings and obviously the math works out if Bitcoin's compounding at a higher number, but um we're we're sitting patient launching a preferred uh equity will not be our first product once we're approved. I can say that confidently. >> All right. Uh you know, you you touched base on one of your partners are Tether and I just want to bring in something that's developing quickly because it touches your world directly. I mean, Tether obviously, which was publicly listed as one of the strategic backers of 21 Capital, has spent the last six months making a surprise push into the gold royalty sector. I mean, they took a stake in Elemental uh Altis back in June. I think they helped EMX royalty merger in September. October, they went into gold royalty in Mattella. Some analysts are calling it a hard money land grab. Others say Tether is trying to control the business of gold, not just hold it. What do you make of this? I mean, why is the world's largest stable coin operator suddenly consolidating the precious metals royalty space? >> Yeah, so I first just want to give a disclaimer. Yeah, Tyler are some of my oldest friends in the space. I obviously spend a ton of time with them. I was just with them in Miami and before that in Switzerland. And so they're my friends, but I'm not employed by Tether and I don't speak for Tether. So I will speak as, you know, an independent buddy that has his own opinions, but I need to disclaim. This is not I'm not representing them to be clear. I can't have, you know, a news headline like Jack says Tether's going to do this. But my my opinion is, you know, there they have this tagline which I think says a lot about who they believe themselves to be, which is Tether, the stable company, not just the stable coin. And the way that I would I would my opinion on Tether is that on one side of the world, you have AI and folks like Sam Alman that is effectively saying, you know, we're going to be so good at AI that we're going to solve all the world's problems. We're going to grow our way out of the debt. We're going to solve intelligence for everybody. We're gonna live in a world where nobody even needs to think about money. And I think that sounds like a lot of hyperbol. And if Sam is able to achieve that, you know, God bless him. That's unbelievable. But what if he doesn't? What if we are living through a sovereign debt crisis? What if we are entering a multipolar world? What if neutral reserve assets are going to be repriced? What if the world is looking for a more reliable bank? Not the Federal Reserve, not the European Central Bank, not the PBOC. And I think Tether's building for that world, which is just a more practable, reasonable, logical world, which is, okay, we're going to capitalize our business on neutral reserve assets. We're going to be better at IBIDA and profits and employment and efficiency. We're going to focus on technology. And so that's kind of the way I see, you know, both these companies are private, uh, OpenAI and Tether. They're both worth $500 billion supposedly. One though is massively unprofitable and is aiming to pull off something that's perceived to be physically impossible, which is solve all the world's problems in a record amount of time. And the other is massively profitable and operating fairly logically. So I think their entrance into gold, I mean, listen, Jeremy, I would say, is it impossible that the Tether dollar is valued more than a US dollar in a future state if the US dollar goes through a serious currency crisis? Because Tether has one of the largest holdings of gold and one of the largest holdings of Bitcoin in the world. I mean, who if you are someone in Nigeria, who would you rather trust? I mean, they're so I I I think they're building, you know, a Fort Knox of sort like a modern-day Fort Knox, a stable company that if the world isn't going to be magically solved by a bunch of AI wizards in San Francisco, um that they can provide stability uh and banking to the world uh and technology to navigate our way into this new era. >> Yeah, that's interesting. That's an interesting take. Yeah, that's I mean because if the world is looking for something better and Tether is positioning itself as a reliable backbone that also concentrates an enormous amount of power and risk into one private entity. Does that worry you at all? I mean that we might just be swapping one form of centralized fragility for another only this time under the banner of crypto or stable coins. No. No. Because I guess what other way would you want to have it? Ultimately Tether is governed by Bitcoin and gold, right? Like Tether can't print a bunch of Bitcoin. Tether can't print a bunch of gold. And so ultimately, I think where humans belong is being governed by mother nature and the natural laws of the universe. But if we're going to go a level down, Tether won the free market. There's been plenty of stable coins. There's been plenty. And trust me, as their friends, I know they have been harassed, ridiculed, lied about constantly. But customers elected their approach, their product, their leadership team, their brand. And so they've won the free market. So I guess my rebuttal to that would be a question of well what else? What do you guys want? Would you guys rather have a government in a nation state? Would you rather have a big tech company? This is a business that has been built on product market fit, cash flows, and a vision. So I don't know if not for a private business, who would I rather have? I'd certainly rather have a private business. They seem way more efficient than a government. Um, but within the private sector, do we need to elect, you know, do they have to be public? Do they have to be from America? I don't believe so. I I I fundamentally believe in free markets and they've won a grueling free market. So, I think they deserve it. And if people don't want to use their product, they shouldn't. No one's ever, you know, put a gun to anyone's head and said you have to use USDT. So, I don't know. That's my opinion. But, >> yeah, it makes sense. I mean, listen, and again, I'm not going to put a headline on this piece saying, you know, Jack Mer said, but you're you're close to this. These are your buddies. I mean internally do you see tether's long-term vision as you know a making the dollar more usable is it b making bitcoin more usable or is it c kind of quietly building the rails for a postd dollar system alto together because if tether succeeds it becoming the reliable layer the world trusts what what does that make bitcoin in that architecture I mean is it the engine is it the collateral or is it just another asset riding on the top >> yeah I mean I think that the world needs to recolateralize entirely right like right now we're collateralizing against sovereign debt and we're in a sovereign debt crisis. And so, you know, depending on where you are in the world and who you are, you're recolateralizing on gold or you're recolateralizing on Bitcoin. And so, I I think Tether is doing exactly that. They have these three products, right? They have tons of Bitcoin products and they are a Bitcoin leader. They also now have gold products. So, Tether Gold is really interesting to me because they've used their stable coin technology to tokenize gold and it's seeing seeing meaningful adoption and I think that product can be used to settle commodity trade between sovereigns. I think that product could be used for people that are sick of the dollar being debased. And then they have USDT which is the savings account for 500 million people in emerging markets. And so I think each of these products serve very different customer cohorts like Tether Gold and their gold positioning I think is serving maybe a lot of the eastern side of the world. The people that are remmonetizing gold and are doing there's a lot of commodity settlement now in gold. If you wanted to tokenize gold and digitize gold and do digital payments with gold and settle commodity trade I think Tether's going after that market potentially. You have the Bitcoin market which is dominated historically by the West. These are net producers to society. There's a massive wealth transfer going on. It's where the wealth exists primarily in the United States of America and it's certainly transferring into Bitcoin which is now a $2 trillion asset. And that's you know Tyler and I's entrance into the capital markets. I think focusing on Bitcoin serving Bitcoin being able to build Bitcoin cash flow a large treasury. And then the last is USDT is there's half the world that you know is living through extreme hyperinflation living within some authoritarian regime where money is used to abuse them and that product is extremely popular because if you if it's a question between the you know Turkish Libra the Nigerian naira and the dollar the dollar wins every day of the week and so in 20 30 40 years you know I personally believe Bitcoin wins out and I know Paulo the CEO of Tether has been very public and saying that as well. But um you know as CEOs we have to build for today and for what customers want now. It's you know if there's an island out 50 years from now where Bitcoin solves everyone's problems but we're on an island right now where people have loads of problems and if you just focus on the 50-year island then you leave them stranded and you don't connect and build a bridge. And so a lot of the the tools that we're building is bridging people to a better future. Um, and you know, even at 21, it's we're building a bridge that's walking people from a distressed world to a more prosperous world. And we're building the bridge, standing right in the middle of the bridge, and we're saying, "This thing's not going to break. It's stable. You can walk on it. Bitcoin works." So, anyways, I I I I think, you know, we share in that vision and that mission together. >> Yeah. Okay. I mean, I could continue to ask you on the Tether stuff, but I'll get Paulo on the show and and leave you alone on this. You just like >> He's good. He's good. you just brought up um you know obviously um your company here talking about launching with over 42,000 bitcoin right I mean 21 capital what what are you around 43,500 plus right now >> yeah 43,514 and some change >> so I mean the strength question our audience cares about I mean are you buying this dip and at what scale >> uh well we would like to be approved uh to engage in some financing so right now you know we've submitted our our final updates to our S4. Uh we have a shareholder vote that's scheduled for December 3rd. And so we, you know, fingers crossed to get approved and able to list the stock on a stock exchange publicly. And then yes, then um then we're in the game. Put me in coach, I'm ready to play. But uh for right now, we're we're pencils down and working with the SEC on the approval of the transaction. >> And on the psychology of this market, I mean, you've probably been blown up. Everyone's questioning what's going on. Do you feel a responsibility to act during these market stress periods or do you kind of follow a fixed strategy? >> No, you know, I I think uh it gets really complicated the more variables you include in the pot. Uh I like to keep things simple. Uh the liquidity situation within the United States has been convoluted. Risk assets are going to respond to that. Bitcoin is going to respond the most because that's what it's designed to do. Liquidity is going to come back. It has to or else the world's going to fall apart. Bitcoin wins in that version of reality as well. Well, it just involves a lot more pain. But no, the United States is defaulting silently via inflation and Bitcoin will be the best expression of that as well to the upside. And so, you know, this why I think cash flow generating businesses are so important is focus on building value for those around you. Earn more than you consume from the world and and uh continue to buy as we can and uh stay humble and stack sats. It's really simple. I think a lot of the pessimism and just the capitulation when it comes to the energy of the industry is because there's been such a stark rotation, you know, so many early Bitcoin holders have realized some profits and that implies a lot of newer entrance at prices that are higher than we are now. If over half of Bitcoin holders are underwater, that's going to it's going to feel a lot worse than it is. You know, year-over-year, Bitcoin's still up by a couple percentage points. If anything, we're flat. This is this is not a catastrophe. Sam Bankmanfman free didn't rob 10 billion dollars from all of us. Um we're we're okay. I think the liquidity uh cycle is bottoming out and this is a great time to add an emotional trader is the worst trader. Um leave emotions to the bedroom uh and just focus on staying humble and and hard work and conviction in moments like this. Yeah, I mean onchain data shows that whales are accumulating about 36,000 Bitcoin during the selloff. El Salvador just added another hundred million. We talked a little bit about Sailor there. Um I'm just curious because is this the first cycle where institutions kind of bought the top and the retail avoided the bottom? >> It's I mean I think that's one of the coolest parts of Bitcoin's story generally is that institutions are forever buying the top because all of the individuals did buy what you're calling the bottom. We were the first entrance into the market. You know, if you think I think that's one of Satoshi's greater innovations and achievements as the founder of this thing. If you think about it, if Satoshi would have said, "Hey, I found a way to solve a previously impossible computer science program or or a problem, excuse me, and I need to distribute this thing to the world and he went to Goldman Sachs and IPOed Bitcoin." Well, Goldman Sachs would have took 25% of the supply and then a bunch of investment banks would have taken the rest and the people would have been shafted. And that's kind of the classic story. But instead, he used proof of work, use energy, use mining to distribute it to the people. He leaked it on a mailing list and said, "Hey, anyone in the world, use energy and go have it. Get after it. Use this thing." And so, it's for that reason that institutions and governments combined, they they don't even own 10% of of the supply of this thing. uh the people, the individuals own this and so institutions are forever buying the top of Bitcoin and that's uh the coolest part. >> Yeah. Well said. And you know what else they're buying? The top of gold. And this is Kitco. And I just got to ask you, we'll leave it on this because our time always goes fast, Jack. I mean, have you had any direct conversations this quarter with with sovereign wealth funds or government treasuries about Bitcoin accumulation? >> Yes, definitely. Um, you know, the interesting thing, go gold has added many bitcoins worth of market cap to its market cap just this year. And the reason I give that context is gold is is a far more mature asset. And it it's usually referenced as such in how long it's been around as a money or as a store of value, but also in the size of it. If you think of gold's skeletal frame, you know, it has the weight and the breadth to take on a, you know, trillion dollar allocation over the course of a year. Like China's trade surplus was almost a trillion dollars in the calendar year of 2024. Gold has the skeletal frame to take on those inflows where Bitcoin is just too small. So really what you know the adoption curve of Bitcoin is how how does it evolve and grow to into the skeletal frame that can take on something like China's trade surplus because at $2 trillion China's trade surplus last year was 50% of Bitcoin's entire market cap. And so right now I think sovereigns and endowments and pensions and public companies are really feeling out what's the right way to allocate to this asset because there's no question it's been the best performing. There's no question it has better properties. Like it's scarcer. It's easier to move. It's easier to store. But the question is h how does it become a $30 trillion asset? And those are the conversations that are had. Right allocation, right way to think about it. And I think you're starting to realize that. I mean, seeing Harvard build the position it has is uh pretty validating. >> Yeah. Yeah. And and how do you use it, right? I mean, if Bitcoin is going to become the global money, what's the next one thing that has to change next cycle? Well, you know, Strike, we launched Bitcoinbacked lending uh earlier this year, and we've become one of the largest Bitcoin backed lenders for retail in the world. >> And I give you that context because it's the biggest utility use case of Bitcoin I've ever launched in my life. And I was an early pioneer for Lightning. I was very involved in El Salvador's story. But allowing people to borrow and earn liquidity against their Bitcoin without selling it, without incurring a taxable event has been a massive opportunity for the market. And we estimate the size of this market is only about $25 billion in size against a $2 trillion asset. And so we think that there's a huge opportunity to actually build credit markets on top of Bitcoin, which do allow. So, for example, some of our customers, they're borrowing against their Bitcoin and they're putting a down payment on a house. They're borrowing against their Bitcoin, they're putting their kid through school. They're borrowing against their Bitcoin. They're financing an emergency medical surgery. And the interest that you're acrewing on the Bitcoin is far less than the accumulation and the performance that Bitcoin has against the basing currencies. And so you also avoid the taxable event. And so we're seeing Bitcoin actually impact everyday lives as a money, not by necessarily spending it, incurring taxable event. And Gresham's law, you're not incentivized to spend it, but borrow against it. and building technology that makes it transparent, reliable, efficient, cheap. And so I actually am a big believer that that's the next step is that if everyone can accumulate Bitcoin and then just get liquidity, whether it's lines of credit, whether it's termed loans against it so that they can hoard it and benefit from what is now called the debasement trade while still being able to benefit their life so it doesn't just sit under their mattress. >> Yeah, well said. That's a whole other show that we're going to have you back on for Jack Mullers, of course. CEO of Strike and co-founder of 21 Capital. Thank you for being here on a critical day for the market. Uh congratulations. I hope all goes well. Excited to hear more. 21 Capital. >> Yeah, thanks for having me back, man. You guys are great. >> All right. Short-term volatility comes and goes. But the long-term holders and long-term planners tend to navigate best. That's true across every cycle. Now, big thanks to our sponsor, Swan Bitcoin, your partner for generational wealth. You can get started at swan.com/kickco. Now, I'm Jeremy Sappin. For all of us here, thanks for watching. Be sure to hit subscribe. We'll see you next time. >> Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. Swan's mission-driven team simplifies Bitcoin investment, custody, and security, bringing you concierge service, worldclass research, and exclusive events.
Jack Mallers Reveals Why 50% of Bitcoin Holders Are Underwater Ahead of Dec 1st
Summary
Transcript
In focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. All right, Bitcoin is trying to find its footing after one of the sharpest reversals of the year. Now, earlier today, it slipped back into the high $80,000 range, but at the time of taping, I mean, it's recovered back above $93,000, and it's still nearly 25 30% below the October all-time high, but it has effectively erased some of the Bitcoin gain. obviously for 2025. Now, ETF investors are underwater for the first time. Corporate treasuries, including strategy, Euro preferred now trading below par, really feeling the pressure, and at the same time, long-term holders and sovereigns, they're quietly accumulating into the weakness. Now, this is the biggest structural test of Bitcoin's institutional error since the ETF launch. So, today we're focused on one question. Is Bitcoin breaking down? Are we resetting for what comes next? Are we buying the dip? Of course, joining me now is Jack Mer, CEO of Strike, co-founder of 21 Capital. Uh Jack, great to have you on in this moment. >> Good to see you, buddy. Thanks for having me back. >> Always, always. Okay, lots hitting right now. I mean, obviously, it's a volatile market, but we've seen this thing go from, you know, 89,000 to 80 93 just as you and I have been chatting. I mean, you know, we Let's talk about the moment that we're in. We we saw that fall, it snap back. In your view, what is this moment? I mean, is it a healthy reset after October's euphoria? Is it the start of something deeper? I I think broader markets in risk are selling off just generally speaking. Bitcoin tends to lead that because Bitcoin tends to be one of the only accurate smoke alarms for fiat liquidity we have left in the world. And I hold the thesis that that's because Bitcoin is the only truly free market that we have left in the world. But what I think markets are going through right now is really trying to digest what has become a complicated liquidity situation. So, you know, I actually as preparing for this show, I pulled up my US liquidity index. Uh the US liquidity index that I look at is down 10% a little over now over the last six months. So I think the story is this Trump administration came in, they campaigned on lots of liquidity, re-industrialization, lots of GDP growth and that narrative was a little confusing with Elon Musk and Doge and that Elon Musk was going to send us into austerity by running the US government like a lean startup. And then that didn't work. And then we had the trade wars and we had liberation day. And after liberation day, uh there was taco. Trump always chickens out. And the markets then front ran liquidity. You saw Bitcoin separate and frontr run what the markets assumed to be more liquidity coming. That there was going to be a truce with China. Tariffs were going to be a little bit more mild than they were advertised to be and that the US would find a way to work with the Federal Reserve and re-industrialize this country and print lots of money to make whole on the promises of the campaign. And I think that hasn't happened. Uh mo most specifically that I I want to highlight is in September the US government ran a $200 billion surplus. So that is an annualized surplus of over two trillion and then in October the government shut down. And so this has been one of the tighter liquidity periods for markets generally. I think the combination of AI this administration and the lack of liquidity followthrough markets are just trying to wrestle with. And so Bitcoin is correcting back towards where it was before this administration got going because it's unclear where the liquidity is going to come from and when it's going to come. >> Yeah. Yeah. I mean when you you know when you say the narrative was confusing I mean confusing for who? Because was it was it kind of talking about that institutional positioning maybe retail expectations or or the fact that Bitcoin was being treated like a tech stock one week and I mean a safe haven the next because confusion usually means mispricing and if the narrative wasn't clear that you know does that mean that Bitcoin obviously got ahead of itself and that this pullback is just a market correcting bad assumptions. I think it's confusing I meant on behalf of the administration of the Trump administration. So the Trump administration came out, we're going to re-industrialize. We're going to print a lot of money and make America great again by bringing back. But the way I think about the United States is China has disrupted red America and the internet has disrupted blue America. And they both kind of fight these enemies. And Trump came in and said, "We're going to fight China by re-industrializing." And that implies a lot of money printing, a lot of stimulus. And that hasn't happened. And then there was a lot of confusion of, well, how are we going to achieve that if Elon Musk is going to send us into austerity with Doge? How are we going to achieve that if we can't agree to terms with China? And so there's been a little bit of confusion of what side are we playing on? Put up or shut up. Are you going to print the money or not? And that's where the confusion has come from. At the end of the day, to me, Bitcoin is priced on future expectations of fiat liquidity. Period. Bitcoin is the antithesis of fiat. Fiat has no supply cap. Bitcoin is finite. Fiat can be censored. Bitcoin can't. Fiat cannot be audited. Bitcoin can be audited by anybody. And so Bitcoin is the best expression of fiat. And so if there's tightening of fiat liquidity, then Bitcoin is going to be the smoke alarm that shows us that. And so I actually put out a post on X over the weekend where I said gold making new highs this year shows us that governments and central banks have to print, but Bitcoin falling from highs right now shows us that they might have a liquidity crisis before they're forced to. And so I think the two market the two assets play different roles and that Bitcoin is a very accurate smoke alarm of where liquidity is today or then the gold market is sniffing out where this is inevitably going right we know QT is ending QE is going to have to restart rate cuts are coming and there's all sorts of stimulus whether it's Fanny May Freddy Mack a housing crisis to be to be declared in 2026 so I see this as a buy the dip opportunity the way to monetize a currency failure is to not bet that the stock market's going to go down 50% like Michael Bur and have your fund shut down. The way you do it is by owning a better currency than the dollar which would be something like gold and bitcoin. So this is a buy the dip opportunity for me. I think liquidity has to come physically. There is no other option and uh this is just a mere reaction to the lack of follow-through from the administration. >> Okay. It's interesting. I mean if if you know fiat's tightening this aggressively, shouldn't Bitcoin be benefiting as the alternative you know monetary asset? Instead we're seeing Bitcoin fall almost one to one with the tightening. How do you explain the disconnect? >> Well, you know, Bitcoin has been and and I'm not saying that this is how I value and view Bitcoin, but historically, Bitcoin has been some combination of a hard money alternative, a neutral reserve asset like gold and technology. You know, you can make the argument that Bitcoin's macro uh thesis or macro value is that it is technology plus fiat liquidity. And so, it's been relatively correlated to the NASDAQ with the properties of gold. And so the market is still trying to figure it out. But the way again I would encourage everyone to pull up a liquidity US liquidity index chart and a Bitcoin chart and they're relatively correlated which is I think what we all want. We all want the best expression of fiat debasement that we all want to own something that is the opposite of someone being able to print time and energy uh out of a central bank while I have to get up out of bed and work work for the currency. Uh and so I think the market is still maturing in its ability to price Bitcoin. Uh gold is definitely leading in where the world is going. Um and Bitcoin is acting more as a real time index and how that progress is working towards the inevitable future which is we're living through a sovereign debt crisis. I mean at the end of the day that's that's the problem is that these sovereign nations are in way over their head and uh gold is sniffing that out. we're going to have to repric the world around us in a significantly weaker dollar and Bitcoin is taking us along that journey. But in part of the ex you're you're exposed to more volatility with Bitcoin. You're exposed to more of the extremes, but that's to both the downside and the upside. And so, you know, to each their own, I I prefer owning the best performer. Um, and so these are buy the dip opportunities for me. and 25% off highs during a liquidity crunch with a government shutdown and is reporting surpluses and $200 billion. That's no problem for me. >> Yeah. Yeah. You're not panicking. I know. I don't see any sweat there. I mean, everyone everyone does want to know. I mean, I put out something on X this morning. Everyone wants to know the same thing. I mean, not the number, but the kind of the conditions. I mean, what has to happen for Bitcoin to bottom? Is it ETF inflows returning? Is it that macro stability? Is it for sellers wash out? or does spot demand need to kind of return or or has it bottomed out here? Right. >> We could be. Listen, could Bitcoin go to 85 80? Probably. But, you know, I think there's there's two things. There's a really healthy cleanse of narratives within Bitcoin. I think that there was a lot of the narrative was ETF institutional demand. Well, a lot of the ETF flows are the basis trade is, you know, arbitrageing futures with the ETF. And then there was the Bitcoin treasury narrative which we can talk about is I'm the CEO of 21. We're not a treasury company. We think we're substantially different than that. But there was this idea that institutions were gaining exposure to Bitcoin through these Bitcoin securities and that there was an MNAV premium to that. And a lot of that's unwinding which I think is very healthy. And so I think we'll find a bottom when the market realizes that Bitcoin doesn't trade in four-year cycles and that a lot of the institutional narrative was a little bit overblown. But right now, people are freaking out. Oh my gosh, these institutions, they're unwinding from their ETF positions and they're unwinding from strategies MNAV trade when in reality, I don't think it was ever really there at the size and scale that it was purported to be and that the narrative conveyed and that Bitcoin doesn't operate on four-year cycles like uh you know, like horoscopes, like it doesn't align with the stars. Uh it operates on expectations of fiat liquidity, which is what it was designed to do. And so I think once the market relaxes, calms down, then we move on to this next chapter of liquidity. I mean, we're hitting the bottom of the liquidity cycle. That's what I would say here on Kitco. I'm not going to call any Bitcoin bottoms, but QT ends. It's November 18th. QT ends December 1st. The Fed has said they're going to have to start expanding the balance sheet. Just for context, peak Fed balance sheet, we're at $9 trillion. Now we're close to 6 trillion. That is an insane amount of tightening. Never have we tightened more. People often say, "Well, if China and Japan sold all their US treasuries, then we'd really be in trouble." China and Japan can both sell all of their treasuries at the same time, and they wouldn't have that much impact that the Fed has had over this over the course of this tightening cycle. And that ends in less than two weeks. And so, tightening is over. QE is resuming. Rate cuts are coming. And there's all sorts of stimulus that is coming from the Treasury Department, whether it's Fanny and Freddy May, deregulation, stimulus checks before midterms. And so I think we're bottoming out in the liquidity cycle. So Bitcoin is really figuring out its identity, understanding that these Treasury MNAVs might not have been the right narrative that understanding the ETF participants, and I think liquidity will resume, will turn up, and Bitcoin will be the best expression of that. That's That's my the prediction I'm willing to make on the show without you pinning me to a price. >> All right. All right. I like it. No prices. Okay. Well, there's obviously some tailwinds fundamentally. Obviously, you're talking about the debt in the US. It's continuing to to grow, but we got to talk about those ETFs because you talked about I mean, outflows for November now total about $2.8 billion. The weighted cost basis on ETF buyers around $89,600 is kind of below not really below market, but I mean right there. And we've seen ETF holders kind of underwater for the first time. It made a lot of people nervous. Did ETFs make Bitcoin more fragile in moments like this? No, I don't think so. In fact, I think the opposite. But there's two real core narratives that the market needs to digest in regards to the Bitcoin ETFs. One is this basis trade. So, you're seeing large banks like Goldman Sachs or trading firms like Sesuana, what is reported as massive Bitcoin positions. and maybe they are taking a directional position on Bitcoin, but the reality is they're running this basis trade where they're able to buy the Bitcoin spot ETF and sell the futures on the CME and capture a spread. And if that spread is returning them more than Fed funds, then that is the equivalent of better risk-free returns for these capital allocators. And so what looks like massive ETF inflows is actually also realized as sell pressure on the futures. And so there's been a misguided narrative that Goldman Sachs cares about Bitcoin just as much as I do. I don't think that's true. I think that they're trading a spread and they're making these markets more efficient. However, it is true in other circumstances like we've seen Harvard. Harvard has one of the largest Bitcoin positions of any endowment in the world. I think it's one of their largest ETF positions within the endowment period. Now, those positions are real. And the really important part, Jeremy, is there's been more Bitcoin OGs of folks that, you know, have been sitting on thousands of coins for over a decade that have been realizing profit. And so actually more than 50% of Bitcoin that has been acquired is underwater right now because there's been a massive rotation of a lot of folks almost think of it as an IPO moment where lots of early investors are realizing some liquidity and some gains and a lot of the folks like Harvard, like firefighter pensions, they are actually using the ETF to soak up a lot of the liquidity. So I would say it's both. Part of the outflows that you're seeing is because the basis trade is no longer returning more than Fed funds. And you see this kind of cyclical wind and unwind, wind and unwind. And you can track that just by how profitable the basis trade is. But what's encouraging is all the endowments and the pensions that are buying for the long term and treating Bitcoin like a hedge against future fiat debasement. >> Yeah. Interesting. I mean, it's it's kind of dangerous, right? I mean, we've seen the movie before. When too much leverage piles into a basis trade, it looks like, you know, great, right? And until liquidity vanishes. I mean, you're not saying Bitcoin is kind of exposed to the same structural risk that broke the Treasury market back in 2019. >> No, no, no, not at all. I mean, these these markets are fairly standard and fairly simple, right? You're taking a, you know, a neutral position on the asset and you're providing liquidity and efficiency to the marketplace. I would argue that it's not necessarily a bad thing. It's good that we have really efficient liquid markets. So that I mean Jeremy, we saw someone sell 80,000 Bitcoin in one day and the price didn't move. And so it's really good that we have highly liquid markets. That's what you want out of a neutral reserve asset is salailability, liquidity. So it's all good. It's just the market needs to digest kind of what's been liquidity dislocation. There's been a lot of campaigning and future promises on printing money, re-industrializing, ending QT, starting QE, go go go, and then we ran a surplus, and then the government shut down. And then, well, who's actually net long these ETFs? How important is the basis trade? Well, what are these treasury companies? I see the market just gathering itself a little bit, which is obviously if you believe in the thesis that currencies have to continue to be debased and the sponge of sorts to to absorb the excess liquidity that sovereigns have to print is going to be gold and bitcoin. This is a a great opportunity to add to those positions. I think it's really that simple. >> I I got to ask you, I mean, you know, when we're talking about the Bitcoin basis trade, it's kind of being artificially inflated because the futures market is over financialized relative to spot. I mean, would you support regulators tightening leverage limits for hedge funds running this type of trade? >> I mean, to be honest, I'm a free market guy. Like, it's hard for me to advocate for the perfect amount of regulation. I I'm more libertarian than anything else. I'm not really into politics, and I think less regulation is better. Humans are plenty capable of governing themselves through the free market and having to realize consequences of the decisions they've made. So, >> we're living it. We're living it live right now. Jack, but would you support would you kind of support a redesign of of a Bitcoin ETF, for example, requiring 100% spot backing and no rehypo hypothecation? >> Sure. Absolutely. Yeah. And and what I would support the most is a free market where all these products can compete against each other and let customers choose what do they want. Do they want more comfort in knowing that there's no rehypothecation? Would they want cheaper pricing? And I think the market will inevitably get there, unfortunately, because of, you know, politicians and overregulating is what we tend to do. It becomes really bureaucratic and slow, but free markets are the best way to govern a society and a marketplace. And and we'll get there, and that's what I advocate for if I were in charge. >> I was reading, you know, some some stories this morning, and they're talking about how option traders are loading up on the 85 and $80,000 strikes. I mean, how much of this move is is real fear and how much of it is option-driven structure and, you know, positioning? >> I think that's what the market has to figure out. And for someone like myself, I don't really care. You know, the really cool thing about this is if you have a low enough time preference, none of this matters. I mean, the US the financial system is going to collapse if they don't provide the liquidity to keep it going. And we all know that. The question is, are we going to need a bank collapse? Is someone gonna have to blow up in the repo market? Is the stock market gonna have to go down 20% like during liberation? I mean, liberation week where we all felt so awfully liberated. I mean, everyone thought it was a great depression and then markets rallied to all-time highs only weeks afterward. And so, the question is it's a when, not an if. Now, short-term speculators, that's not me. That's not my game. Um, what I do think is important is that markets really flush out a lot of the narratives that are maybe inconsistent with the truth. And that's what I find encouraging is that I think Bitcoin is going to really find its identity. I was also just because I was curious looking up Google Trends. How popular is Bitcoin right now? And it's at its lowest level over the last, you know, 3 to 5 years. And so I think Bitcoin is going to really grow into a natural truthful identity on the back half of what has to be an incredible amount of stimulus from sovereigns. >> Yeah. Yeah. Well, I mean certainly when we look at the markets today, the AI trade, I mean, you know, there is a little bit of volatility. I mean, the greed and fear index is extreme fear right now. But I want to hit on another story because corporate treasury obviously these Bitcoin treasuries are under a lot of stress. Michael Sailor's 10% euro denominated series A preferred stock was sold at 80 cents on the euro. Two weeks ago today, it trades around 78. In strategy just bought eight uh what was it? $835 million worth of Bitcoin in 7 days. well funded by that issue. How much stress is this putting on that treasury model? This Bitcoin treasury company model. >> Yeah, I mean so I'm co-founder and CEO of 21. Um we expect to be approved shortly on a public stock exchange where that we can list the stock publicly. And you know part of the reason and why we founded the company is we feel like we can represent Bitcoin slightly differently in the capital markets. We look at this spectrum of maybe on the far one side there's a strategy which is just self-described as a treasury company that does lots of financial engineering and then on the other side of the spectrum maybe there's a coinbase which builds you know cash flow forprofit products that then they use to give investors exposure to bitcoin. We think we can live somewhere in the middle where we are not as sold on these preferred equities. We don't totally understand why um if we are a company and we buy Bitcoin that that Bitcoin would be worth twice as much on our balance sheet as if it was on an individual's checking, you know, Fidelity account. Um and so we're kind of live in this middle ground where we're going to build financial products and turn profit and have loads of cash flow whilst also optimizing to be capitalized on Bitcoin as a treasury business. So my opinion on the preferreds, you know, I I think that they add a lot of leverage and a lot of pressure to the MNAV itself because if you are signing yourself up for uh financial obligations in the future, like you owe the world, you owe anyone in the world 10 a.5% forever on any amount of money that they want. Well, the only two ways you can finance that if you don't have cash flow is either through selling your equity or the Bitcoin that you have on the balance sheet. And so for us, it's always been dubious. How do you not put an immense amount of pressure on the MNAV because you're affecting effectively adding leverage to the MNAV? You're saying that the MNAV is implied to have a substantial premium which makes that dilution worth it. But if that's not the case, then you have to start selling your Bitcoin. And so our opinion has always been that's not where we want to live. >> We don't consider ourselves a treasury company for that reason. We want to be a combination of, you know, the best parts of Coinbase and the best parts of Micro Strategy. And I think the market is flushing out and figuring out well what exactly are these things and how do we price these securities because clearly the market doesn't agree with the fact that there's a deserving MNAV and that you know that leverage on top of the MNAV needs to be realized as true and that MNAV has fallen to one or sometimes below one. And so the question is if you have all sorts of really expensive financial obligations in the future, how are you going to finance that? Um, and so we want to be the the Bitcoin company in the capital markets that can explore leverage, can explore a treasury business, but afford it with cash flow as opposed to things like dilution or having to uh sell Bitcoin off our balance sheet. But we'll see. Obviously, Michael has been a pioneer in the space and uh maybe he can figure some things out. You know, he's a self-described financial engineer. But um to date, I think that's what the market's figuring out. And yeah, there's a lot of pressure on these MNAVs because there's future financial liabilities that rely on them to to get paid. >> Yeah. Yeah. So, so to be clear, Jake, I mean, you're saying strategies model depends on perpetual leverage while 21's model depends on perpetual accumulation because those are two very different philosophies. >> Yeah. I think, you know, this could sound extreme or or sound like a dig, but you know, it's not. We want to be the treasury company that can afford it, right? We, you know, if you look at Tether and myself and our leadership team, so I co-founded the business with Tether. Our largest outside investor is SoftBank. You know, we have what it takes to build massive cash generating businesses within the industry. Strike is one of the most profitable per employee Bitcoin companies in the world. Tether's probably the most profitable per employee company period in the history of mankind. So, we have lots of ideas and lots of future plans to build cash flow within the market that gives investors an ability to participate in Bitcoin story through an operating business. And then conversely, we're already the third largest corporate holder of Bitcoin. We will be able to add to that position substantially once we're approved. And we want to be the largest holder of Bitcoin. And we think, you know, we can take the best of what strategy is, which is a large Bitcoin holder and ability to accumulate, whether it's through monetizing volatility, cheap cost of capital, access to the capital markets, and the best of someone like Coinbase, which is a first mover and a leader within the industries they focus, which Tether and I have been in our careers. So that's us. We do not necessarily want to add leverage to something like our MNAV. We do not want to add leverage to our common equity necessarily. That puts a lot of pressure on future dilution and shareholders to have to finance you know we don't want new investors being responsible to finance you know existing preferred owners uh necessarily unless you know we're missing something and if we are we're going to copy Michael Sailor but so far um we're we're kind we're watching closely and uh have have more of a directional focus on on maybe optimizing for for cash flows that would finance something like uh convertible bonds that we would raise in the future. >> That's interesting. Yeah. No, I mean the differentiator is there. I was I was talking to somebody this past weekend and they said, you know, are these corporate treasury companies just turning into leveraged Bitcoin ETFs? >> Yeah. But the the interesting thing about that question is there are leveraged there are leveraged Bitcoin ETFs. If you want to leverage a Bitcoin ETF, you can do that on your own. And so the question is, you know, at 21, what can we provide the market that others can't? And I think the very obvious answer is not everyone is tether, not everyone has been in Bitcoin 13 years, not everyone has founded Strike and not everyone is SoftBank. And so we plan to provide our goal has always been be the best way to participate in Bitcoin's story in the capital markets. We think we can bring both blue chip credibility and startup upside to the capital markets. And we feel as if that was missing. You know, Coinbase we don't think is a Bitcoin company. We think they're a crypto company. and strategy does not have Bitcoin native cash flow, does not build Bitcoin products and is relying on as far as I can tell and again I know I'm going to get all sorts of stuff from um strategy shareholders and it's not my intention but I'm just trying to build a delineation of there's you know being levered with expectations of financing it through common equity or through Bitcoin sales versus being able to build a business alongside it that can optimize in in being levered and being more aggressive in Bitcoin exposure. You know, that's where we want want to live. >> Yeah. Yeah. I mean, so would 21 Capital ever issue debt or preferred stock the way strategy kind of just did or are you trying to build the first sustainable Bitcoin treasury model, not that leveraged one? >> Yeah. So, we've already raised a convertible bond instrument. Uh, and so that's certainly within the reigns and I would say, you know, we we have a culture never say never, right? again um part of our our culture not only at 21 in Strike but also in Bitcoin is stay humble and stack sats as they say is you know within Bitcoin you're not the main character you're not the all knower of the universe uh learn and so we're watching the industry but I would say as of right now um these preferred equities you know you know owing 12% forever um that's a really expensive bill to pay um especially if I have to pay it through dilution or through my Bitcoin holdings and obviously the math works out if Bitcoin's compounding at a higher number, but um we're we're sitting patient launching a preferred uh equity will not be our first product once we're approved. I can say that confidently. >> All right. Uh you know, you you touched base on one of your partners are Tether and I just want to bring in something that's developing quickly because it touches your world directly. I mean, Tether obviously, which was publicly listed as one of the strategic backers of 21 Capital, has spent the last six months making a surprise push into the gold royalty sector. I mean, they took a stake in Elemental uh Altis back in June. I think they helped EMX royalty merger in September. October, they went into gold royalty in Mattella. Some analysts are calling it a hard money land grab. Others say Tether is trying to control the business of gold, not just hold it. What do you make of this? I mean, why is the world's largest stable coin operator suddenly consolidating the precious metals royalty space? >> Yeah, so I first just want to give a disclaimer. Yeah, Tyler are some of my oldest friends in the space. I obviously spend a ton of time with them. I was just with them in Miami and before that in Switzerland. And so they're my friends, but I'm not employed by Tether and I don't speak for Tether. So I will speak as, you know, an independent buddy that has his own opinions, but I need to disclaim. This is not I'm not representing them to be clear. I can't have, you know, a news headline like Jack says Tether's going to do this. But my my opinion is, you know, there they have this tagline which I think says a lot about who they believe themselves to be, which is Tether, the stable company, not just the stable coin. And the way that I would I would my opinion on Tether is that on one side of the world, you have AI and folks like Sam Alman that is effectively saying, you know, we're going to be so good at AI that we're going to solve all the world's problems. We're going to grow our way out of the debt. We're going to solve intelligence for everybody. We're gonna live in a world where nobody even needs to think about money. And I think that sounds like a lot of hyperbol. And if Sam is able to achieve that, you know, God bless him. That's unbelievable. But what if he doesn't? What if we are living through a sovereign debt crisis? What if we are entering a multipolar world? What if neutral reserve assets are going to be repriced? What if the world is looking for a more reliable bank? Not the Federal Reserve, not the European Central Bank, not the PBOC. And I think Tether's building for that world, which is just a more practable, reasonable, logical world, which is, okay, we're going to capitalize our business on neutral reserve assets. We're going to be better at IBIDA and profits and employment and efficiency. We're going to focus on technology. And so that's kind of the way I see, you know, both these companies are private, uh, OpenAI and Tether. They're both worth $500 billion supposedly. One though is massively unprofitable and is aiming to pull off something that's perceived to be physically impossible, which is solve all the world's problems in a record amount of time. And the other is massively profitable and operating fairly logically. So I think their entrance into gold, I mean, listen, Jeremy, I would say, is it impossible that the Tether dollar is valued more than a US dollar in a future state if the US dollar goes through a serious currency crisis? Because Tether has one of the largest holdings of gold and one of the largest holdings of Bitcoin in the world. I mean, who if you are someone in Nigeria, who would you rather trust? I mean, they're so I I I think they're building, you know, a Fort Knox of sort like a modern-day Fort Knox, a stable company that if the world isn't going to be magically solved by a bunch of AI wizards in San Francisco, um that they can provide stability uh and banking to the world uh and technology to navigate our way into this new era. >> Yeah, that's interesting. That's an interesting take. Yeah, that's I mean because if the world is looking for something better and Tether is positioning itself as a reliable backbone that also concentrates an enormous amount of power and risk into one private entity. Does that worry you at all? I mean that we might just be swapping one form of centralized fragility for another only this time under the banner of crypto or stable coins. No. No. Because I guess what other way would you want to have it? Ultimately Tether is governed by Bitcoin and gold, right? Like Tether can't print a bunch of Bitcoin. Tether can't print a bunch of gold. And so ultimately, I think where humans belong is being governed by mother nature and the natural laws of the universe. But if we're going to go a level down, Tether won the free market. There's been plenty of stable coins. There's been plenty. And trust me, as their friends, I know they have been harassed, ridiculed, lied about constantly. But customers elected their approach, their product, their leadership team, their brand. And so they've won the free market. So I guess my rebuttal to that would be a question of well what else? What do you guys want? Would you guys rather have a government in a nation state? Would you rather have a big tech company? This is a business that has been built on product market fit, cash flows, and a vision. So I don't know if not for a private business, who would I rather have? I'd certainly rather have a private business. They seem way more efficient than a government. Um, but within the private sector, do we need to elect, you know, do they have to be public? Do they have to be from America? I don't believe so. I I I fundamentally believe in free markets and they've won a grueling free market. So, I think they deserve it. And if people don't want to use their product, they shouldn't. No one's ever, you know, put a gun to anyone's head and said you have to use USDT. So, I don't know. That's my opinion. But, >> yeah, it makes sense. I mean, listen, and again, I'm not going to put a headline on this piece saying, you know, Jack Mer said, but you're you're close to this. These are your buddies. I mean internally do you see tether's long-term vision as you know a making the dollar more usable is it b making bitcoin more usable or is it c kind of quietly building the rails for a postd dollar system alto together because if tether succeeds it becoming the reliable layer the world trusts what what does that make bitcoin in that architecture I mean is it the engine is it the collateral or is it just another asset riding on the top >> yeah I mean I think that the world needs to recolateralize entirely right like right now we're collateralizing against sovereign debt and we're in a sovereign debt crisis. And so, you know, depending on where you are in the world and who you are, you're recolateralizing on gold or you're recolateralizing on Bitcoin. And so, I I think Tether is doing exactly that. They have these three products, right? They have tons of Bitcoin products and they are a Bitcoin leader. They also now have gold products. So, Tether Gold is really interesting to me because they've used their stable coin technology to tokenize gold and it's seeing seeing meaningful adoption and I think that product can be used to settle commodity trade between sovereigns. I think that product could be used for people that are sick of the dollar being debased. And then they have USDT which is the savings account for 500 million people in emerging markets. And so I think each of these products serve very different customer cohorts like Tether Gold and their gold positioning I think is serving maybe a lot of the eastern side of the world. The people that are remmonetizing gold and are doing there's a lot of commodity settlement now in gold. If you wanted to tokenize gold and digitize gold and do digital payments with gold and settle commodity trade I think Tether's going after that market potentially. You have the Bitcoin market which is dominated historically by the West. These are net producers to society. There's a massive wealth transfer going on. It's where the wealth exists primarily in the United States of America and it's certainly transferring into Bitcoin which is now a $2 trillion asset. And that's you know Tyler and I's entrance into the capital markets. I think focusing on Bitcoin serving Bitcoin being able to build Bitcoin cash flow a large treasury. And then the last is USDT is there's half the world that you know is living through extreme hyperinflation living within some authoritarian regime where money is used to abuse them and that product is extremely popular because if you if it's a question between the you know Turkish Libra the Nigerian naira and the dollar the dollar wins every day of the week and so in 20 30 40 years you know I personally believe Bitcoin wins out and I know Paulo the CEO of Tether has been very public and saying that as well. But um you know as CEOs we have to build for today and for what customers want now. It's you know if there's an island out 50 years from now where Bitcoin solves everyone's problems but we're on an island right now where people have loads of problems and if you just focus on the 50-year island then you leave them stranded and you don't connect and build a bridge. And so a lot of the the tools that we're building is bridging people to a better future. Um, and you know, even at 21, it's we're building a bridge that's walking people from a distressed world to a more prosperous world. And we're building the bridge, standing right in the middle of the bridge, and we're saying, "This thing's not going to break. It's stable. You can walk on it. Bitcoin works." So, anyways, I I I I think, you know, we share in that vision and that mission together. >> Yeah. Okay. I mean, I could continue to ask you on the Tether stuff, but I'll get Paulo on the show and and leave you alone on this. You just like >> He's good. He's good. you just brought up um you know obviously um your company here talking about launching with over 42,000 bitcoin right I mean 21 capital what what are you around 43,500 plus right now >> yeah 43,514 and some change >> so I mean the strength question our audience cares about I mean are you buying this dip and at what scale >> uh well we would like to be approved uh to engage in some financing so right now you know we've submitted our our final updates to our S4. Uh we have a shareholder vote that's scheduled for December 3rd. And so we, you know, fingers crossed to get approved and able to list the stock on a stock exchange publicly. And then yes, then um then we're in the game. Put me in coach, I'm ready to play. But uh for right now, we're we're pencils down and working with the SEC on the approval of the transaction. >> And on the psychology of this market, I mean, you've probably been blown up. Everyone's questioning what's going on. Do you feel a responsibility to act during these market stress periods or do you kind of follow a fixed strategy? >> No, you know, I I think uh it gets really complicated the more variables you include in the pot. Uh I like to keep things simple. Uh the liquidity situation within the United States has been convoluted. Risk assets are going to respond to that. Bitcoin is going to respond the most because that's what it's designed to do. Liquidity is going to come back. It has to or else the world's going to fall apart. Bitcoin wins in that version of reality as well. Well, it just involves a lot more pain. But no, the United States is defaulting silently via inflation and Bitcoin will be the best expression of that as well to the upside. And so, you know, this why I think cash flow generating businesses are so important is focus on building value for those around you. Earn more than you consume from the world and and uh continue to buy as we can and uh stay humble and stack sats. It's really simple. I think a lot of the pessimism and just the capitulation when it comes to the energy of the industry is because there's been such a stark rotation, you know, so many early Bitcoin holders have realized some profits and that implies a lot of newer entrance at prices that are higher than we are now. If over half of Bitcoin holders are underwater, that's going to it's going to feel a lot worse than it is. You know, year-over-year, Bitcoin's still up by a couple percentage points. If anything, we're flat. This is this is not a catastrophe. Sam Bankmanfman free didn't rob 10 billion dollars from all of us. Um we're we're okay. I think the liquidity uh cycle is bottoming out and this is a great time to add an emotional trader is the worst trader. Um leave emotions to the bedroom uh and just focus on staying humble and and hard work and conviction in moments like this. Yeah, I mean onchain data shows that whales are accumulating about 36,000 Bitcoin during the selloff. El Salvador just added another hundred million. We talked a little bit about Sailor there. Um I'm just curious because is this the first cycle where institutions kind of bought the top and the retail avoided the bottom? >> It's I mean I think that's one of the coolest parts of Bitcoin's story generally is that institutions are forever buying the top because all of the individuals did buy what you're calling the bottom. We were the first entrance into the market. You know, if you think I think that's one of Satoshi's greater innovations and achievements as the founder of this thing. If you think about it, if Satoshi would have said, "Hey, I found a way to solve a previously impossible computer science program or or a problem, excuse me, and I need to distribute this thing to the world and he went to Goldman Sachs and IPOed Bitcoin." Well, Goldman Sachs would have took 25% of the supply and then a bunch of investment banks would have taken the rest and the people would have been shafted. And that's kind of the classic story. But instead, he used proof of work, use energy, use mining to distribute it to the people. He leaked it on a mailing list and said, "Hey, anyone in the world, use energy and go have it. Get after it. Use this thing." And so, it's for that reason that institutions and governments combined, they they don't even own 10% of of the supply of this thing. uh the people, the individuals own this and so institutions are forever buying the top of Bitcoin and that's uh the coolest part. >> Yeah. Well said. And you know what else they're buying? The top of gold. And this is Kitco. And I just got to ask you, we'll leave it on this because our time always goes fast, Jack. I mean, have you had any direct conversations this quarter with with sovereign wealth funds or government treasuries about Bitcoin accumulation? >> Yes, definitely. Um, you know, the interesting thing, go gold has added many bitcoins worth of market cap to its market cap just this year. And the reason I give that context is gold is is a far more mature asset. And it it's usually referenced as such in how long it's been around as a money or as a store of value, but also in the size of it. If you think of gold's skeletal frame, you know, it has the weight and the breadth to take on a, you know, trillion dollar allocation over the course of a year. Like China's trade surplus was almost a trillion dollars in the calendar year of 2024. Gold has the skeletal frame to take on those inflows where Bitcoin is just too small. So really what you know the adoption curve of Bitcoin is how how does it evolve and grow to into the skeletal frame that can take on something like China's trade surplus because at $2 trillion China's trade surplus last year was 50% of Bitcoin's entire market cap. And so right now I think sovereigns and endowments and pensions and public companies are really feeling out what's the right way to allocate to this asset because there's no question it's been the best performing. There's no question it has better properties. Like it's scarcer. It's easier to move. It's easier to store. But the question is h how does it become a $30 trillion asset? And those are the conversations that are had. Right allocation, right way to think about it. And I think you're starting to realize that. I mean, seeing Harvard build the position it has is uh pretty validating. >> Yeah. Yeah. And and how do you use it, right? I mean, if Bitcoin is going to become the global money, what's the next one thing that has to change next cycle? Well, you know, Strike, we launched Bitcoinbacked lending uh earlier this year, and we've become one of the largest Bitcoin backed lenders for retail in the world. >> And I give you that context because it's the biggest utility use case of Bitcoin I've ever launched in my life. And I was an early pioneer for Lightning. I was very involved in El Salvador's story. But allowing people to borrow and earn liquidity against their Bitcoin without selling it, without incurring a taxable event has been a massive opportunity for the market. And we estimate the size of this market is only about $25 billion in size against a $2 trillion asset. And so we think that there's a huge opportunity to actually build credit markets on top of Bitcoin, which do allow. So, for example, some of our customers, they're borrowing against their Bitcoin and they're putting a down payment on a house. They're borrowing against their Bitcoin, they're putting their kid through school. They're borrowing against their Bitcoin. They're financing an emergency medical surgery. And the interest that you're acrewing on the Bitcoin is far less than the accumulation and the performance that Bitcoin has against the basing currencies. And so you also avoid the taxable event. And so we're seeing Bitcoin actually impact everyday lives as a money, not by necessarily spending it, incurring taxable event. And Gresham's law, you're not incentivized to spend it, but borrow against it. and building technology that makes it transparent, reliable, efficient, cheap. And so I actually am a big believer that that's the next step is that if everyone can accumulate Bitcoin and then just get liquidity, whether it's lines of credit, whether it's termed loans against it so that they can hoard it and benefit from what is now called the debasement trade while still being able to benefit their life so it doesn't just sit under their mattress. >> Yeah, well said. That's a whole other show that we're going to have you back on for Jack Mullers, of course. CEO of Strike and co-founder of 21 Capital. Thank you for being here on a critical day for the market. Uh congratulations. I hope all goes well. Excited to hear more. 21 Capital. >> Yeah, thanks for having me back, man. You guys are great. >> All right. Short-term volatility comes and goes. But the long-term holders and long-term planners tend to navigate best. That's true across every cycle. Now, big thanks to our sponsor, Swan Bitcoin, your partner for generational wealth. You can get started at swan.com/kickco. Now, I'm Jeremy Sappin. For all of us here, thanks for watching. Be sure to hit subscribe. We'll see you next time. >> Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. Swan's mission-driven team simplifies Bitcoin investment, custody, and security, bringing you concierge service, worldclass research, and exclusive events.