The 13% Yield Machine That Could Send Bitcoin to $1.6M

Added: 2026-05-22

[00:00:00]I I think like we're still so early in Bitcoin adoption and digital credit adoption that, you know, trying to see exactly what's going to happen like 5 to 10 years from now is incredibly difficult. My my my shortterm like shorter medium-term thesis is like Bitcoin is approaching like gold parody.

[00:00:18]So like around $1.6 million for Bitcoin.

[00:00:22]you know that kagger assuming that happens in any like you know five 10 year time horizon or or even sooner like it's obviously a pretty pretty solid Bitcoin keer and uh you know significantly uh more than you know 13% or and possibly even higher than that >> how many chairs are you sitting on right now?

[00:00:42]>> Hi everyone and welcome to one chair. In this episode we had the pleasure to talk with Joe Bernett, vice president of Bitcoin strategy at Strive. We discuss strategies, latest earnings call, how digital credit is taking the financial world by storm and much much more. So let's jump right into our discussion with Joe. All right. Hi Joe and welcome to the one share podcast. Great to have you on. Hey, thanks for having me. So we like to start with a question around Bitcoin and your Bitcoin uh background.

[00:01:12]could you uh let us in the audience know how you first got into Bitcoin and uh your journey into uh now uh joining Stripe, a Bitcoin treasure company?

[00:01:21]>> Yeah, absolutely. I can go back to when I first remember learning about Bitcoin.

[00:01:26]I mean, even before I heard about Bitcoin, I was interested in investing.

[00:01:30]I was studying information systems in computer science in college and then later I I studied analytics in grad school and I was, you know, kind of like just fascinated with investing. I had always learned that like kind of like uh investing in blue chip like US stocks was like kind of how people in America saved for the future. And you know I I I kind of had the feeling that it was just very conventional and people didn't necessarily know why they did that. They just knew that it worked and it had been working for many many years and so that was the best way to do it. and and and I I kind of had the intuition that a lot of people didn't knew that it was a bad idea to save a lot of dollars. Like, you know, every wealthy person that, you know, I ever met like had a bunch of real estate or a bunch of stocks and a bunch of all these other assets. And I always just kind of found that fascinating and thought that was just like kind of how the world worked and and should work. And then in 2017 when I was in college uh you know and before that I was kind of like a blue chip like value type investor at a young age of course uh I heard about Bitcoin and I saw that the price of Bitcoin was just like going up pretty aggressively all throughout 2017. I believe it started the year around $1,000 per coin and then it went to 2,000 3,000 6,000 18,000 by the end of the year. And you know, being like that more blue chip value equity investor that I, you know, thought I was at the time, I was like, what is this like digital rock that's a clearly some sort of bubble? Like this doesn't make any sense whatsoever, you know, like why are people buying this? Why is the price doing what it's doing? And, you know, I was curious and interested in technology. So, I decided to just buy a little bit just to kind of like figure out what it is and spend more time thinking about it. And as it peaked at the end of 2017 around $18,000, $20,000 and then throughout the 2018 bare market, I just tried to dig as deep as I possibly could into figuring out what what what in the world is happening with this entire, you know, at the time crypto space, but you know, focused on on on Bitcoin. And I dug deeper. I read some articles on like the Nakamoto Institute written by like Pier Rashard and Michael Goldstein and the they were they felt very like first principles like fundamentals and and really rethinking like what money even is to begin with. And I think once I started reading those, I was like, "This is a weird internet website. Felt like some sort of blog, but it was like very logical and it made a lot of sense." And so I just kept digging deeper and Bitcoin ended up falling down to $3,000 by the end of the year. And like by the end of 2018, I was just like, I mean, I could be wrong, but this just makes so much sense. And you know, I would part of the reason why I made my Twitter account back then was to try to like debate or argue with other people on the internet and try to understand like the opposing point of view because my perspective at the time was like, okay, I read, you know, kind of the fundamentals of Bitcoin at this point, what else what was actually out there, you know, back in 2018. And, you know, I I thought it made a lot of sense. And then I would try to read all the skeptics arguments and the they just didn't make any sense. like uh it was pretty clear to me that people that were anti- bitcoin or bitcoin skeptics like they just hadn't really done the research like there weren't really wellinformed critics whatsoever and I was like well if this is right like this is a really big idea and I kind of want to know who I'm betting against and I kind of figured out like the people that are the Bitcoin skeptics kind of taking the other side of the trade in my opinion didn't really know what they were talking about and so I was pretty pretty much obsessed uh with Bitcoin ever ever since that point, you know, uh obsessed with Bitcoin, kept writing about it, kept talking about it as much as I could. Graduated school, uh my first job out of school was working at Ernston Young doing technology consulting. Quickly realized like, hey, I'd rather work in the Bitcoin space, joined a couple Bitcoin startups, uh eventually joined Similar Scientific, which was the second US publicly traded company to adopt a Bitcoin treasury strategy. uh Eric Similar brought me on there to to lead Bitcoin strategy for Similar Scientific and then we did that for I don't know eight months or so and ultimately we you know Similar Scientific was acquired by Strive uh which is also obviously a publicly traded Bitcoin company and and now I work and and do Bitcoin strategy at Strive. So uh it's been a it's been a wild ride. The volatility of Bitcoin is is intense, not only if you have your portfolio in it, but if you if you work in the space. But, you know, it's it's it's it's to be expected in my opinion when you're witnessing the monetization of a new form of money that is arguably superior compared to all other form of monies. You know, it's the volatility is kind of inevitable. Um, but it's been a it's been a fun ride.

[00:06:42]>> Yeah, definitely. and uh on your new role at uh at Strive, could you elaborate a bit on on what you do as the VP of Bitcoin uh strategy?

[00:06:51]>> Yeah, absolutely. I mean, I think our north star is Bitcoin per share. So, increasing Bitcoin per share over time and kind of like just educating the market on like what amplified Bitcoin is, what digital credit is, and and and and so that's that's a big part of my role, just figuring out like, okay, how can we get Bitcoin per share higher and how can we educate the market on like what we're actually doing behind the scenes and then just also thinking about custody, thinking about the acquisition of of Bitcoin and trying to do that in a lowrisk, lowcost manner, you know, working with a different custodians and and trading partners that we have and and then at the end of the day just figuring out how we can increase Bitcoin per share over time as fast and as low risk as we we possibly can. So it's it's like a wide range of different things, but like that's everything that I think we're doing at Strive relates to that north star of increasing Bitcoin per share and and educating the market on on digital credit and amplified Bitcoin.

[00:07:53]Now, you've worked at uh at a few uh Bitcoin companies, you've worked at EY, and I'm just curious to know how the the pace is different at Stripe because you guys are going so quick. So, so I just want to know how it is to to work at Stripe uh with so much performance going on around. It's incredible. I mean, like, uh you know, similar, we had a pretty small Bitcoin team, right? It was like me, uh, Nick Kleta, who's the who was the treasurer, um, Renee who's our CFO, and Eric, right? I mean, it was pretty small team, and Eric wasn't a full-time employee, you know, he's he was chairman of the board. And so, you know, that was that was like an incredible experience, very interesting experience.

[00:08:35]But now, Strive, you know, we're still a very lean tin like small team. I mean, like we're, you know, I believe our balance sheet as of today hold $1.2 2 billion worth of Bitcoin and we have like 30 employees. You know, it's it's a billion dollar company with with literally only 30 people. And you know, you compare compare Strive to other billion-dollar companies, you know, out in the world. Uh like AMC uh theater, they have like 30,000 employees and they're also a billion dollar company.

[00:09:04]So, that's that's kind of interesting.

[00:09:06]But, um yeah, the pace is incredible for how like small the the team is. I think everyone is very focused on the northstar of increasing Bitcoin per share over time. Uh, everyone's pretty aligned that like digital credit is the primary best path to to actually do that and educating the market on what digital credit is and why it's important and and the risk associated with it of course and of course also like the potential returns like that's that's that's critical. But yeah, I mean, every everyone knows that the you know, the space is moving so fast that when the door is open or the door is cracked, you got to be ready to knock down the door and and push forward. And it feels like, you know, Strive, not only is like the team executing very well on on very short time time frames, but like the timing has been right. Like everything kind of just has lined up so well that the team has been in a spot to execute when when the opportunities present themselves and like the similar acquisition, you know, was obviously a big one. SATA at the right time was obviously a big one and even just their original like reverse merger into the public markets which I believe was still less than 12 months ago. Like that was, you know, timing was was good for that.

[00:10:22]So like uh the team is executing like incredibly fast. Everyone everyone has the like long-term Bitcoin vision.

[00:10:30]Everyone understands like Bitcoin is an incredibly volatile asset and volatility is to be expected when you're looking at something growing this fast. And I think that that is a huge requirement to operate a successful Bitcoin treasury company because if you're, you know, operating a Bitcoin treasury company and some of the board is is not necessarily aligned with Bitcoin or, you know, doesn't understand that Bitcoin of course just doesn't go up in a straight line, then the moment or the executive team doesn't fully understand that, then the moment that there's turbulence in the market, which there inevitably will be in the Bitcoin market, you're going to pivot or make the wrong decision at the wrong possible time, um or you know and it works both ways, right? Like if it's a bare market, you'll be like, "Why do we do this strategy? This is a bad idea." So, you have to have that long time horizon or in a bull market, you could be leveraging up with bad debt at the worst possible time, and that's obviously going to come back to bite you in in the Bitcoin market. So, I think everyone having that long time horizon when it comes to uh executing the Bitcoin Treasury strategy, but then also being willing to move really quickly when opportunities do present themselves. Like Strive is absolutely crushing at that. It's been a pretty unbelievable experience, you know, um you know, watching it all play out from the inside. Yeah, it really looks like a stellar team and uh as you said the you can see it also from the outside the the speed of execution that you guys have.

[00:11:57]It's pretty incredible. So I think that's the main differentiator for Strive currently is uh the team you have in place and how quickly you move. I I just quickly want to get go back to the Bitcoin per share and improving Bitcoin per share topic because this has been an ongoing debate in the the Bitcoin treasury space is um in a bare market, how would you defend YNAV? what can you uh what can you do to improve Bitcoin per share? And one of the the obvious mathematical ways to do it would be to sell Bitcoin to buy back your own share if you're trading uh well below uh below NAV, right? And u it's uh it's been a a contested view. Some agree with that, others don't. strategy has now for the first time in in this earnings call said that they would be willing to sell Bitcoin and they even had a slide showing uh exactly that basically if you have an MNAV of 0.5 that they would potentially sell Bitcoin to buy back their share and that this is uh is actually uh yeah improving bitcoin per share for for the shareholders but I was curious to to hear your thoughts on that and if that would also be a strategy that Strive would be uh would be willing to uh to to do. Yeah, I know that was an interesting call. It's like, you know, I've looked back at uh at Sailor, you know, in other calls and and presentations and podcasts and and so on and so forth. Like he has mentioned that he would like if needed to to especially just pay the dividends like that they would sell Bitcoin to pay the dividends.

[00:13:28]They they've mentioned that like it's last resort, but like you know they could do it theoretically. And then now this past call they were like incredibly transparent and made it super clear that hey like not only might we sell bitcoins at some point in the future to to pay dividends but we actually could buy back stock we could increase the cash reserve you know etc. bunch of different possible strategies. I I think it was a smart idea for for for strategy to do that, right? like you you want you want to have maximum optionality on the table um to to to show that you know you can do all these different things if you so desire to to do them you know and I think to some extent it can help um it can help just kind of like rebalance everything for for for instance like saying that if you know the the common stock traded down to.5x mnav and uh it was like you know it would have been very I uh dilutive potentially or not a creative to issue common stock and pay the dividend. Then the fact that him him saying that he'd be willing to sell Bitcoin in that scenario made it very clear that he'd be willing to sell Bitcoin in that scenario should give common equity investors kind of more confidence that okay like he's not going to sell you know if if the stock drops to like pretty ridiculously low levels per this valuation metric.

[00:14:52]Therefore, you could have theoretically like more confidence in the common stock knowing that you know you wouldn't have these like dilutive transactions if the stock for whatever reason happened to trade there. So, I think it's a great idea to like keep the optionality open.

[00:15:06]I mean I think like you know you look back at what Strive did uh you know last year establishing the the cash reserve that we did like in a way that's kind of similar to kind of what what strategy is saying like it was uh not necessarily a creative on a bitcoin per share basis to like raise capital and put it in a cash reserve. However, like on a longer term basis, I would say it would be a creative on a Bitcoin per share basis because the whole point of the cash reserve is to build more strength in the underlying credit quality of SATA and stretch and therefore if the market, you know, has more trust in the credit quality, then theoretically in the future, you could sell more digital credit, buy more Bitcoin, and obviously those transactions would be a creative.

[00:15:56]So, it's like it was like a short-term hit to Bitcoin per share when Strategy did it, too. Establishing their cash reserve and uh and you know, I think I think that was obviously a good idea in hindsight. And so, yeah, I mean, I think that like you know, all options like are on the table and and possible for sure.

[00:16:16]You know, I I think that like when it comes to uh you know, Strive probably at least it's like we're we're definitely focused on like the credit quality of SATA. It wouldn't make like if the stock traded down I don't know to to 8.8 MNAV or whatnot. It's like you wouldn't want to sell half the Bitcoin and buy back stock per se. I mean just because like then all of a sudden your amplification rate would would go higher. The credit quality would would decrease. I think it's it's probably a good idea to like like sailors mentioned like how strategy would do it here and there and and potentially mention to the market that they they could do this if if the market gave them a great opportunity, but it doesn't mean like I don't expect strategy to be like selling, you know, hundreds of thousands of Bitcoin and and doing the strategy. It's probably more just kind of a check on the market being like, hey, we can do this. we might do this, you know, at some point in the future just to kind of check check and be like, hey, like if the stock if the common stock is trading where it shouldn't be, you know, we we can there are levers to pull to fix that. So, I think it was a it was a good idea. And I think and it was also interesting like you know it's kind of been uh I don't know maybe like one of the the Bitcoin skeptics may be like oh wow like this is all going to unwind once strategy has to start selling their Bitcoin and then like they announced that they are going to sell Bitcoin and then Bitcoin was pretty much up after that they they they suggested that. So, kind of a uh you know, funny that like this this didn't cause like a massive sell off in Bitcoin, and I I don't expect it necessarily would. Uh but it certainly was probably like the main takeaway from the earnings call and and a lot of like mainstream media uh heads were like what what is this or like what what what happened here? Like they're completely pivoting from their strategy. And in my mind, like it's not really much of a pivot at all. It's like if you sell common stock or you sell Bitcoin, you're decreasing Bitcoin per share when you do that. Obviously, the dividends are going to get funded. If the balance sheet is like remotely healthy, they gota they're going to pay it one way or another.

[00:18:16]>> Yeah. Yeah. I agree. I think it it was just more to give them optionalities, right? And uh I don't expect huge Bitcoin sales in in the future from Strategy and and uh Michael Su went on a few interviews in the last few days and and did clarify that, right? That they will remain a net buyer for uh forever basically.

[00:18:34]>> Yeah, exactly. I saw one thing like I I remember in the Bitcoin space you know there's there's always been like a debate in the past on what should you you know like should you spend your Bitcoin like should you go to the coffee shop or stake and shake and spend bitcoin and some people like no you should always like use dollars to spend it but then some some Bitcoiners would would be like oh no you should spend and replace your bitcoin you know you spend the bitcoin then buy buy bitcoin that you spent so it's kind of like this that concept is kind of playing out like in the treasury space right now which just kind of funny going back to the earnings call. Are there any other um big takeaways for for you? That was definitely the the largest takeaway. Um I think like the continued focus like even on on some of his last presentations like the continued focus on digital credit and specifically Stretch like it that seems to be you know the what's what's where this entire industry is going. And I I think it to me it feels like Bitcoin is at a pretty major inflection point for like where we're going over the next few years. You know, in my mind, like if you look at something like the huddle waves, which is like charting, you know, how much Bitcoin has moved and and how long it was it was held for and how long it is held for, you can clearly see in Bitcoin bull markets that when when the price is soaring, a lot of older coins begin moving. you know, logically if someone has made millions and millions of dollars, like might want to reposition, buy other assets, so on and so forth.

[00:20:07]And so, every time Bitcoin does a 10x or 100x or or whatever, a lot of old coins move and they move into to newer hands and and they obviously those people probably just like reallocate their portfolio. I think what's interesting this time is like now if Bitcoin does go on another major parabolic bull run, there's actually like a pretty decent incentive for all these older Bitcoin holders to to cash out into digital credit stretch SATA, right? Like you know the the interesting thing I think with digital credit in my opinion is like last year Bitcoin peaked at 126,000. It fell to a low of 60,000.

[00:20:47]digital credit traded pretty well. Um, you know, like Bitcoin fell more than 50% or around 50% and like Stretch SATA were pretty much trading near par. And so, you know, it's like that's that's kind of interesting from like a digital credit perspective for from like an OG Bitcoiner perspective because like if Bitcoin goes up 10x and we're sitting at, you know, 80 $800,000 per Bitcoin, you know, in my mind like, okay, could Bitcoin keep going up to, you know, one to two million? For sure. Maybe it could. It's why like you know most people would probably never sell you know a majority of their Bitcoin stack but like could it fall back to 400,000 200,000 yeah I mean absolutely uh it certainly could um and so in that scenario it's like people might have an incentive to cash out to digital credit uh and and kind of hold that as an asset that you know is obviously less volatile than Bitcoin itself can provide a more steady income and so that's that's like an interesting like breakthrough for me at least because it's like all right if you are this this older Bitcoin holder and you want to you know kind of lock in some of your the capital appreciation that you've seen in holding Bitcoin you might just start moving a portion of your stack into digital credit and like obviously issuers of digital credit strategy and strive are issuing digital credit and buying Bitcoin so it's like a it's still like a not you know capital isn't necessarily leaving Bitcoin when people theoretically would perform this trade. Um, and so I think that's a pretty big idea and I think, you know, that's one of the many reasons why in the strategy earnings call Sailor is so focused on like educating the market on Stretch and and digital credit because I think it's a it's a huge paradigm shift.

[00:22:31]I mean another point like related to to to stretch and why I think they're they're focusing on it so much is like you know espec especially like when I when I first started at similar you know I was like very involved with like the ATM activity and the Bitcoin acquisitions and you know the market as we explained it in our earnings presentation um like similar SMLR amplified Bitcoin just like MSTR amplified Bitcoin ASST like amplified Bitcoin and so in my mind like these things are like you know they're not obviously they're not cold storage Bitcoin but they are very correlated to Bitcoin and they're effectively like a pseudo Bitcoin position working in these you know these treasury companies it's like they sell amplified Bitcoin they buy Bitcoin it's it's it's in a way it's similar to like selling Bitcoin on Kraken buying Bitcoin on Coinbase it's like a it's almost like a delta neutral trade and and you know obviously there's differences like there's different pools of capital that can access you know traditional equities rather than commodities and of course that's h that's certainly happening but it is a it's a similar you know product per se whereas digital credit completely different product right like it's tapping into a completely new you know investor type it's tapping into a completely new risk profile it's tapping into a completely new like return profile like it actually does kind of appeal to a broader segment of investors and in my mind this is more like net new capital that's entering Bitcoin And I think that's a really big idea because as you you know you guys have been in the Bitcoin space for a while as well like you know to to hold Bitcoin you need to have a perspective of four to five years maybe 10 years or more you you know you got so if you want to understand it you have to have a decent understanding of like pure science like how it works like economics like the the origins of money uh and then through the volatility of of Bitcoin when Bitcoin goes into an extreme bare market, you know, you have to have you have to be able to remain uh highly convicted in your position, you know, as it falls 50%, 80%, so on and so forth. Like very few people in the world are capable of thinking for four plus years and then over those four years like having the same degree of conviction that they had when Bitcoin was like soaring and when they originally probably bought their position. Like 99% of people aren't aren't, you know, it's hard for them to think that way. Whereas digital credit, you know, everyone wants money paid every month. Everyone wants something that, you know, its price is relatively stable or designed to be stable. It's hard, it's a lot harder to deny digital credit. It's pretty easy to deny Bitcoin. I mean, we, you know, you've been in the space for a while, like a lot of people still still don't necessarily get it, but digital credit just completely changes like the time horizon that's required and it makes it a lot more difficult to ignore in my opinion. And I think that that's like a huge deal that uh I think Sailor gets and I think a few other people get, but I think it's still in like the very early stages of like how much capital could start flowing into Bitcoin.

[00:25:38]>> Yeah. And you brought up a few really good points on on why why I'm so bullish on Bitcoin now going forward is that uh there's a lot more capital that will flow into it, but there's also capital that is protected that's already in the in the crypto space that uh you know historically it would flow into altcoins to uh to go out on the risk curve and and today you don't really need that anymore. You can buy Bitcoin treasury companies as you said and then it stays in in the ecosystem in the Bitcoin ecosystem, right? Because the companies turn around and they issue more share to buy Bitcoin, right? And so it stays in Bitcoin and uh and yeah, you open up to a new cohort of more conservative investors too that want to buy the the the preference, right? So yeah, very interesting.

[00:26:26]>> Yeah, exactly. And I mean like on that on that point well what's interesting like the altco you know crypto broadly hasn't really had a bull market I would argue since 2021 whereas Bitcoin I would say like it was a muted bull market but it it it probably did and I and I I definitely agree like probably Bitcoin treasury companies did take a wave out of altcoins because like a lot of like intelligent altcoin investors you know thought of altcoins as like a high beta Bitcoin. and they wanted to outperform Bitcoin, but now it's like, okay, well, if you want that, you buy treasury companies that are literally amplified Bitcoin or you buy you can buy options on treasury companies if you want even like more extreme volatility. And then even like in the crypto space, you know, like the little that I have learned about it, it's like people love yield.

[00:27:11]Like yield farming was like a kind of a meme in the crypto space uh and like the when DeFi was really popular and you know it still is to some extent. And so now like digital credit, you know, there's a lot of like the actual digital credit like stretch and zeta like obviously those are relatively high yields compared to other yield products that exist. But not only that like people are learning to like trunch these products into like you know uh more conservative digital credit more and amplified digital credit and you know other people are leveraging up on digital credit and you know putting it as collateral and like you know DeFi platform borrowing at 5% buying more of the digital credit. So like the the crypto space like has a lot of you know everything that they could have could have ever wanted is now kind of available and it's all indirectly buying Bitcoin exposure whether it's amplified Bitcoin or digital credit and so yeah I think that's a very underrated you know point that that you just made and completely agree there. Yeah, going back to the the earnings call, Sailor had some high praises for for Strive, right?

[00:28:16]I'm going to quote him at the end of the earnings call. If I was designing a Bitcoin treasury company from a clean sheet of paper, the company would consist of one common equity, one monthly or semionthly variable preferred equity, and a big stack of Bitcoin and nothing else. So, he basically described Strive, right, that comment.

[00:28:35]>> Yep. Yeah, he did. And it makes a lot of sense, right? like you as a Bitcoin treasury company, you don't want debt maturing. You know, you think about assets, pairing your assets and liabilities, right? Like Bitcoin is this infinite duration asset. Kind of like I mentioned, like you need at least four years, maybe even longer as it gets older and bigger.

[00:28:55]Well, if you have a a long duration asset, you need a long duration liability to pair that against. If you have some debt maturing in the next year or two or three or four years, then that's obviously not, you know, ideal because I don't I don't know what Bitcoin's going to be one year from now, two years from now. Like it I I suspect it'll be higher and I'm willing to like make that trade, but I'm way more confident that Bitcoin will be higher five years from now or especially 10 years from now. And so like having debt kind of like clouds that a little bit in the sense that you know you might have to refinance the debt the wor you know worst possible time um and that might involve selling Bitcoin that might involve you know other other different things. It's much better to pair that with a perpetual obligation perpetual preferred equity rather than some sort of debt that that you know matures at some point. It also just keeps the the capital structure like just simpler and easier to understand. I mean, not only does that obviously help like the common equity investors if you don't have this like debt maturity cliff approaching, but it also, you know, arguably would improve the credit profile of the perpetual preferred equity investors because you know that there's now no one else more senior to you in the capital stack, which is like obviously, you know, a pretty big deal. um when you're thinking about like will I will I will the company actually be able to make meet these dividend obligations over time. Um and so yeah, it was you know it's it's interesting. It's it's it's uh obviously like Sailor Sailor's great um and like obviously he's a he's a great fan of Strive and we greatly appreciate you know his support and his guidance that he's offered us and you know and you know throughout the entire process of Strive becoming you know a Bitcoin treasury company.

[00:30:43]Yeah, that's uh your advantage, right?

[00:30:45]That you could learn from uh from what uh what he did with strategy and just uh take over what what really works well.

[00:30:52]>> Yeah.

[00:30:53]>> But then I I wonder because there's a there's a few teasers out there from yesterday and today. Yesterday Jeff tweeted that uh this week's going to be a a big week. The the world will change.

[00:31:05]Uh Strive's account uh posted a picture of a an orange three. So, what are you guys working on? I thought it was already perfect.

[00:31:16]Uh, yeah, you know, there's probably not much I can share further there. We're definitely working very hard behind the scenes and I will uh I will just reiterate what Jeff said. I think it's going to be a pretty big week and for for the world for Bitcoin. Yeah. And for like the future of capital markets. So, pretty exciting.

[00:31:38]>> All right. Yeah. looking forward to those announcements and you might have to come back on to explain it and absolutely. All right. So, um maybe something we can talk about is this uh digital credit ETF that uh that Strive has announced a few a few weeks back. C can you uh explain a bit of what what you plan to do with that and why you you decided to launch it?

[00:32:01]>> Yeah, I mean thinking about like the history of of Strive like Strive is obviously an asset management company. a variety of different ETFs that we have.

[00:32:10]This is kind of like a an amplified digital credit ETF kind of like what we were talking about. People have tried to do this in the crypto world. Um but you know, Strive being uh you know, having the background of launching ETFs and kind of knowing how the ETF market works and also understanding that you know, our core goal is to increase Bitcoin per share over time. This would be a a you know, an amplified digital credit ETF.

[00:32:36]So like you know effect effectively uh you know borrowing capital and and buying additional digital credit to amplify the returns of digital credit since it's a relatively higher yield. Um that's probably like as mo as most as as I can share on it. But uh helping people you know get access to digital credit and the different flavors that they they want to access digital credit. you know, some people want, you know, the just pure digital credit, some people may want amplified digital credit, and some people may want like a senior trunch of of digital credit. And so, obviously, the ETF that we released is kind of like, you know, stretch and SATA and and would be like an amplified version of digital credit, slightly amplified version of digital credit. And uh you know I think like the traditional market is obviously like very starved of yield and so like something like this is probably pretty interesting as is just plain vanilla digital credit with with no wrapper on it. And so it's something that we're definitely excited about. Um and it could be a it could be you know we'll see what the market how the market thinks about it and how much capital flows into it. But I you know to me I think it's a pretty good idea.

[00:33:46]>> Yeah absolutely. I think it's it will be a a successful product. Um the way I understand it still needs to be approved, right? Uh by by the SEC. Yeah, it's it's not officially live yet. Um right now I believe it may be like I don't know the specific time frame, so probably shouldn't say any anything uh beyond that, but yes, like it's still pending like final final approval and listing. Um I don't I as far as I'm aware personally I don't know of like any like major concerns as to like why it wouldn't you know eventually get get listed but the time you know the time frame you know could be could be sometime obviously like this year but like um yeah it's it's obviously not completely listed quite yet.

[00:34:31]>> All right. Um, I want to to shift gears.

[00:34:34]Um, one of the the things that we saw last week that was quite entertaining was uh Jeff and Coffeezilla going at it and uh yeah, so so obviously there there was a lot of things to take from that, but I wanted to first ask you what was your your main impression of of this uh conversation?

[00:34:53]>> Yeah, I loved it. I mean I you know I'm thinking back to one of the original Coffeezilla videos that he posted. you know, he um he was like trying to identify scams and one was like an Instagram scam, some guy promising like 8 to 12% returns like monthly, I believe. So like 100 something% returns annually. And Coffee was like DMing the guy and he was like, you know, come on, like let's let's have a conversation about this publicly and talk about it.

[00:35:20]And then the guy blocked him. And then after, you know, coffee made the the the digital credit video, you know, I know a number of people that reached out to him and were like, "Hey, like let's have a conversation." And then he he never really replied to anyone for like, you know, a few a couple weeks at least. And so eventually he did end up having the conversation with Jeff. And I I thought it went, you know, phenomenally well obviously for for Jeff and Stribe and and Strategy. Like to me it's pretty clear that like Coffee has like started to do his research and you know understanding you know I I haven't I've never been a huge like Coffeezilla uh not fan but like uh watcher of his videos but I know like he basically just tries to identify scams that might be in the crypto space might just be broadly in in you know markets or or whatnot.

[00:36:11]And so it's not surprising that he would see digital credit at, you know, the 11 and a half and 13% uh at par yields and be like, "Okay, like this this is like too good to be true." Like some there's a catch here. And so I think it was, you know, he he he intuitively thinks there might be a catch. And he realizes that um well, if there's not a catch, then this is a this is actually a pretty big idea. I think like at the end of the video uh when like they ended part of the recording uh he was like I think like the the you know I think this is going to work really well and I think and he was like I think this is going to be the downfall of the strategy because it's going to be too successful and I think that was kind of telling that okay like he understands that a lot of capital is probably going to start flow already has flow flowed into Bitcoin through digital credit a lot more capital probably will be flowing going into Bitcoin through digital credit. And obviously that should be in theory good for Bitcoin as it puts an underlying bid on Bitcoin and kind of becomes this very interesting reflexive feedback loop that arguably maybe is starting to play out in the very early stages right now. And um and so yeah, I think that uh it was a it was a great conversation. I think like the reaction from like the Bitcoin community and and broadly, you know, just kind of investing community, everyone like pretty decisively said that Jeff was kind of like the victor and and coffee, you know, kind of didn't quite understand some things or, you know, maybe his conviction in Bitcoin like is as a long-term investment, he just doesn't quite buy into that. Um, but I thought obviously Jeff did a phenomenal job and I thought I thought it was great to see, you know, the Bitcoin community, like the space engaging with the critics. Um, you know, I think like when I, like I mentioned at the very start, when I first started like trying to learn about Bitcoin, I wanted to hear the skeptics's story and like what what their analysis was on why Bitcoin was not something you should be buying when it was trading at $3,000.

[00:38:19]And, you know, I I personally could not find a very good reason as to why it wasn't a a good long-term savings technology. And I'm glad that I, you know, did the research and and uh built some conviction during that time. And I think like digital credit is another thing like like let's battle test it.

[00:38:37]Like let's get the critics and and the skeptics in the same room with, you know, issuers of digital credit and let's hear them discuss the pros and cons and the risk and and so on and so forth. And perhaps, you know, maybe they won't change their mind uh quickly, but maybe people watching will will kind of hear both sides of the story and, you know, I think the the the best ideas and the best products will will ultimately win. And I think that that was a great example of uh that video is a great example of that kind of playing out in real time. Yeah, there's so many similarities um of digital credit as we are now as Bitcoin I think in 2015, 2016. And uh yeah, it made me laugh because you also posted a a really nice post with the the the room at Risk World which was basically empty with uh Jeff explaining and right next you have Antonopoulos with also an empty room back in 2015 most probably and uh yeah just brought me so many memories of the videos I was watching of Antonopoulos back in the day and uh we're going through the same iteration now with with digital credit um and going back to the to the to the coffeezilla uh uh video that there was a sort of epiphany that I had while while watching that is obviously Jeff is is very good at explaining and he uses this insurance analogy which I think is is just probably the best analogy that you can use for digital credit in a sense that you realize that probably most of the retail don't understand what an insurance policy is a financial contract right and you could see it as well in coffee so obviously with retail we see this this type of of reaction which doesn't surprise me and I'm just curious to know how it is when you start talking with actually more sophisticated uh investors. Does that analogy farewell?

[00:40:28]Yeah, like you know Jeff's obviously an expert in the insurance industry. He worked in the insurance industry for a long time and so he he can think of like these insurance-l like analogies like very clearly and yeah like obviously like insurance contracts are are just like financial contracts in a way like digital credit is just a uh financial contract that says we'll pay you these dividend obligations with these specific terms and conditions over time and like that's kind of what it is that that's kind of what credit is at the end of the day. like it's a it's a promise from an issuer. The promise can have certain you know terms and and conditions like some credit is is due at a certain point.

[00:41:08]Other credits throughout you know various points in history have been perpetual credits. Um in fact like the early early days uh like British council I believe uh was a perpetual bond and I believe it's it may still even exist today and it was like the reserve asset of the world at one point. So like the this idea of like a perpetual credit instrument, you know, has been around for for a long time and yeah, I mean I think uh the the insurance analogy like really stumped coffee because it's like all right well you know insurance company has this balance sheet of assets. they take in, you know, payments from their customers and they have pay out the claims and, you know, over time, ideally, like the insurance company is uh being run correctly, they have more money coming in from the payments from all of their their customers than they have claims coming out. And they still have the the huge balance sheet of credit like assets that, you know, would be there in the event that there is a month of a lot of bad claims. And you know, obviously like when coffee like talks about something like a Ponzi scheme or whatnot, like he you know, his his definition was like very uh it's way too broad. Like saying like, "Oh, you take money from someone to pay out someone else." Like that's that's not necessarily entirely the case with with every Ponzi scheme. Like yes, a Ponzi scheme fits in that definition, but like there are things like insurance companies that clearly do not uh are not Ponzi schemes. of course. Uh and and so you know, yeah, it was it's kind of a it was kind of a gotcha like to Coffee and you know, there were it was interesting how there were points like when when Jeff explained that or or some maybe it was something else, but Coffee was like, "Is your audio breaking up? Like I can't hear you." He kind of had that funny moment of like he was like, "Huh?" Like we need to change topics here maybe. uh and and quickly to to figure out something else cuz he just pointed a pretty huge hole in in his argument.

[00:43:07]Yeah, it was uh it was yeah quite quite opening in general also to think because obviously like I think in the Bitcoin community most of the people understand all of these topics fairly well but once you get out of the Bitcoin community it's yeah not everybody uh understand these topics as well I guess and um maybe just to to again shift the topics here I I know you obviously work at you worked as sar but I'm just curious if if there are any other uh smaller bitcoin treasury that are uh interesting you in any way or is there anything that you're looking at for for Strive as well potentially?

[00:43:44]Yeah, I mean I'm think like as far as other well I guess I I'll start with this like Bitcoin treasury companies specifically strategy interest me as a as a Bitcoiner because it was the first time like in Bitcoin's history where I saw all right here's actually a way that you know there you're taking risk of course but it's a it's a possibly possibly a positive like risk adjusted way to outperform holding spot Bitcoin Like my view over all the past years is Bitcoin is the hurdle rate for capital allocation. You should denominate your portfolio in Bitcoin and if you are investing in say things other than cold storage Bitcoin well like is it going to outperform Bitcoin over a long time horizon? And that was kind of how I thought about markets. And you know there were Bitcoin yield products throughout history. Most of them, if not all of them, have like completely blown up um or, you know, suffered like pretty serious losses. A lot of them were kind of just black boxes that, you know, you were like, "How are you generating the yield?" And they couldn't really give a great answer or if they did, I was you could kind of point, you know, you could pretty clearly identify risk at which this would not work very well for them if if you know, certain things played out. Um and so so amplified Bitcoin was like the the you know really interesting idea at the time. And what was so interesting about it in my opinion was the idea that you can have an amplified Bitcoin position without a margin call.

[00:45:17]And so like you know if if you think about the history of Bitcoin like you could trade with leverage on BitMX. You can create an amplified Bitcoin position. You can go 2x long Bitcoin, but if Bitcoin falls 50%, you're liquidated and now all of a sudden you lost all of your Bitcoin. It's not a very good strategy considering Bitcoin has and can fall 50%. Um, and so, you know, on a long enough time horizon, you're probably going to lose your Bitcoin. Um, and there are like Unchain obviously has great like Bitcoin collateralized loan products good for specific use cases, but you have to be very conservative on how you use them and they're certainly risk and you know you you don't want to be a force seller of Bitcoin at the worst possible time.

[00:45:59]And so this whole idea of establishing an amplified Bitcoin position with no margin call and now with digital credit like no maturity risk like again you have to have a long time horizon in my opinion. So, you know, if you borrow money on one year, two-year terms, well, like that there's risk there because I don't I don't know what Bitcoin's going to be in 1 to two years. So, the whole this idea of a amplified Bitcoin position with no marginal risk and no debt maturity or very little debt maturity, huge idea to me. It's like the only thing I've ever found that like might actually outperform Bitcoin over time if as long as the Bitcoin thesis continues to play out. And so like right now strategy and drive being so focused on digital credit and have digital credit you know uh securities publicly traded in US markets you know that have raised billions and hundreds of millions of dollars like these are like kind of the two main plays at this point for for what I'm personally interested in interested in which is like having this long-term amplified Bitcoin position with like no margin call risk and and no like little debt maturity risk. I support the other Bitcoin treasury companies of course and I think more companies should even follow the same path as Strategy and Strive and issue digital credit but to me like those seem to be the the only two that are like uh of of high interest to me at this point.

[00:47:25]And so and and and you know for Strive in particular kind of like I I mentioned like our focus is on on SATA and on digital credit and educating the market on SATA uh and helping more people understand like what this is the risk associated with it and like how it's even you know just like we had the the conversation with Coffeezilla like you know explaining to people and debating with people like well how do you pay the 13% like how does that actually work you know under what conditions does this not work so on and so forth And um and yeah, that's that's certainly our main focus at this point.

[00:47:59]>> Fair enough. I mean, obviously I think when you you think of Bitcoin treasury companies, obviously strategy and strive come to mind right away and uh obviously so because you you're the ones performing uh on in the best uh during the bare market and we see that you have the the engines roaring compared to others that are uh frozen or or stagnating. So, so definitely and uh talking about digital credit um so obviously digital credit now enables also some pretty interesting new ideas I think in in just portfolio creation and there I'm curious to know if there's um hypothe hypothetically in your portfolio how how are you using digital credit or or have you conceived new ways to to utilize it hypo I'll start with like a or I'll just talk about a hypothetical portfolio obviously not invest investment advice of of course and um but yeah I mean I think it's interesting right like you know you think about of the history of investing uh the history of like saving for retirement 6040 portfolio was you know all the rage for you know decades right you have 60% equities 40% bonds and like when you're younger you it's tend to to to recommended that you have more equity and less bonds right that obviously adds volatility to your portfolio, but theoretically should add longer term return as well. Um, and and when you get older, you might even shift more towards bonds, right? Because you don't, you know, you don't need to maximize your net worth 50 years from now if you're already like 70 years old.

[00:49:39]Like there's no, in fact, at that point, you want less volatility. you want income to pay your bills and you don't really want to have to like be worried or stressing about, you know, do you have enough money to pay your bills and so you you you tend to gravitate more towards like fixed income. So I think like over time uh as people learn that Bitcoin actually is a better long-term savings technology rather than like broadly blindly buying the equity market which is kind of like what passive indexing has has done like you just buy everything close your eyes and you know it kind of keeps up with money printer.

[00:50:17]Um Bitcoin arguably is kind of like a in my opinion like a better way to to go about doing that. Uh but again it requires you to have a long time horizon. And then digital credit is just kind of putting that you know fixed income like uh exposure on Bitcoin where again like you you you obviously like cap your your returns but the volatility is you know as noted in you know the price performance of of digital credit like it's significantly less um volatility and so like you could see a scenario in the future where like younger people hold a lot of Bitcoin and amplified Bitcoin and then as people get older and like they don't need the next 10x or 100x, they slowly start shifting some of their portfolio into into something like digital credit where it's it's you know it's a little bit more predictable. It's a little less volatile and just kind of like reconstructing the 60/40 portfolio with like amplified Bitcoin, Bitcoin and digital credit which are obviously all being built on Bitcoin. So, I think like that's kind of something that we'll probably continue to see evolve as long as Bitcoin, you know, solid foundation of Bitcoin remains, you know, this this elite long-term savings technology. And, you know, of course, I think I still think people will invest in companies and and US equities and whatnot, but I think what will change in the future is you won't just blindly be buying indexes at whatever valuation they happen to be trading at. I think like that's that's more aligned to saving. And if you happen to do you happen to find a company or a sector that you think is undervalued for whatever reason, maybe you're a professional investor, then then you would go and and you know identify those companies or those sectors and then maybe consider making an allocation. But on a long enough time horizon, uh you might just be better off like you know holding Bitcoin and holding like Bitcoin structured products that are are you know built on Bitcoin.

[00:52:17]Yeah, I think that that makes sense and it's going to be interesting u all the ideas that come out of it and and how people just structure their portfolio because uh yeah, I've seen quite a few interesting takes on on that and everybody has different ideas on on how to to make it. So, so definitely uh that's why and I think that's a going to be a recurring question of mine to guests to to see how everybody thinks of of creating portfolio. And uh I would have uh one last one is um so I had an interesting discussion with Chase Palmieri uh last week uh about uh dividend rates on uh on digital credit where um Sailor in his uh in the earnings call mentioned that he would keep the uh dividend rates for quite some time um elevated for for digital credit for STRC and Chase had had thesis that was quite interesting is that actually we might not even see uh dividend rates decrease on on STRC and potentially SATA if the um ARR on Bitcoin keeps going up because of the bit that we have assuming that we have a uh sort of um bull run uh a preminent bull run that that happens because the AR as it keeps going up you guys could increase the dividend rate on on SATA and still capture that spread and uh still make some good returns for for common uh shareholders and and all of this is obviously based on on the foundation that USD will be debased and it will be debased always at that faster rate, right? Potentially even reaching hyperinflation at some point and uh I'm just curious to to hear your take on on these thesis and and what you think about them. I did I actually I watched that podcast. That was a good podcast that you guys did. Uh and I I saw that uh saw that a segment I guess at least of it. Um yeah, it's interesting. I mean, you know, I I think like we're still so early in Bitcoin adoption and digital credit adoption that, you know, trying to see exactly what's going to happen like 5 to 10 years from now is incredibly difficult. You know, I I think like, you know, my my my shortterm like shorter medium-term thesis is like Bitcoin is approaching like gold parody.

[00:54:41]So like around $1.6 million for Bitcoin.

[00:54:44]you know that Kager assuming that happens in any like you know five 10 year time horizon or or even sooner like it's obviously a pretty pretty solid Bitcoin kagger and uh you know significantly uh more than you know 13% or and possibly even higher than that.

[00:55:02]Um but it's hard it's hard to know where kind of we might go from there. Like I think like that's my base case for Bitcoin. I think it's you know could keep going much higher. I think you know it's hard it's hard it's it's impossible to predict exactly what Bitcoin will do.

[00:55:17]I think like a power law like model is is a good base case as well. However, of course, like as you kind of pointed out, like you can make the argument that okay, well, as economic system converges on Bitcoin as money and uh you know, people begin creating debt and credit in the weaker forms of money, arguably adding to the supply of those weaker forms of money, possibly creating some sort of like reflexive feedback loop where the weaker currency uh the effective supply of that continues to expand and the uh you know circulating or available supply of Bitcoin continues to kind of get scarcer and scarcer as people continue buying it. You know, you can make the argument that something like what you mentioned could play out. Um but it's hard it's hard to really know. I mean, I think like if that starts playing out in that manner, you know, Bitcoin's at mill millions and millions of millions of dollars per coin. Uh so it probably be interesting time. Um and and part of me like thinks that it's almost better for it to play out kind of how it is playing out. Um in the sense that Bitcoin follows some sort of power law trajectory for as long as possible. You know, the amplified Bitcoin holders of uh do obviously incredibly well. Digital credit holders like do incredibly well.

[00:56:40]It's it's growing really fast, but it's not growing like you know disturbingly fast. You know, it's like if digital credit is like a trillion dollar market in in 12 months, like you know, we're probably in pretty interesting times. If it's a hundred billion dollar market in 12 months, uh like you know, everything's kind of probably going like fairly smoothly. Bitcoin's probably significantly higher than where it is.

[00:57:02]But like forecasting like beyond like a fiveyear period, it's kind it's it's hard to tell like exactly what's going to happen. Um, but like in in all scenarios, I mean, I think I I personally believe that Bitcoin will be significantly higher and I I definitely do think like digital credit is going to be driving uh a lot of that. Uh, this one's a more of a a tricky one. I consider it almost I mean it's a definitely an interesting thought experiment, I think, but it's it's almost like a a philosophical question at this stage, right? It's it's early to tell. We're so early in in in that. I mean, we've we've had uh STRC what since 9 months and uh digital credit is barely one year old and we're already making this these assumptions. But uh yeah. Um great. Joe, is there anything important or or valuable that we haven't touched on yet that you think might be worthwhile for the audience? Yeah, I mean I think you guys covered the the main points. I mean like I've said before, like I I think we're at an inflection point for Bitcoin. And I think a lot of people probably feel that. I think like the advent of digital credit is like a a really really big deal that people aren't really paying enough attention to. Um, and you know, as long as like Bitcoin continues to function and as long as Bitcoin, you know, digital credit continues to to make the dividend payments, like I think it's only going to get more interesting over time. And you know, we talked about like how, you know, what's going to happen with digital card and Bitcoin over like the next few years. Like if this keeps accelerating, you know, it could be like truly pretty wild times that we're going to be experiencing and it's it's kind of hard to see how it doesn't keep accelerating. So, it's exciting times. Um, super excited about, you know, the future of Bitcoin. Um, and appreciate you guys having me on the show.

[00:58:53]>> We appreciate your time. Thanks for the the gracious time. And uh where can people find you online and uh your work?

[00:59:00]>> Yeah, you can find me on Twitter. Uh I'm I'm Joe Bernett on Twitter or I I Capital or you can also find me on on YouTube um at Joe Bernett on YouTube. We also we just launched a show called The Income Show kind of covering digital credit markets and Bitcoin and investing broadly. We we launched that on on True North. So, if anyone wants to check that out, you can go watch our our first episode with Mike Alfred, which was a a cool fun episode.

[00:59:26]>> Yeah, that was that one was great. I can recommend it. All right, it was a pleasure. Thank you. Thanks, guys. How many chairs are you sitting on right