Empire Cross-Post: The Crypto Treasury Playbook With Ben Forman & Josh Solesbury From ParaFi Capital

Transcript

What's actually interesting here is like the barriers to entry to copy micro strategy at least at a small scale like you need a shell legal entity um and I guess like a half half decent management team. A lot of these management teams aren't very good but but you know it's actually like from a game theory standpoint like if you're a failing public company this is actually probably like the most EV positive you know one of the EV positive things you you can do in terms of pursuing this. >> Quick shout out to today's sponsor Katana. We'll hear more about Katana and their pre-eposit campaign later today, but for now, let's get into the episode.

Hey everyone, quick disclaimer before we get into today's episode. Nothing said on Bell Curve is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only, and the views expressed by anyone on the show are solely our opinions, not financial advice. Our guests and I may hold positions in the companies, funds, or projects discussed. Today's episode is a crossost from Empire. Jason sat down with Ben and Josh from Parify Capital to dive into all the details, developments, and the future for publicly traded crypto vehicles. Enjoy. All right, everyone. Welcome back to Empire. We are doing uh take two of a crypto treasury vehicles episode. Uh the episode with Josh. Uh we've got Josh from Parfy. We've got Ben Foreman, who's

the founder of Parafi, uh back on the show. So Ben, Josh, welcome. >> Thanks, Jason. Yeah, excited to dig in. Yeah, Josh, your episode from uh when was it 45 or 60 days ago is one of the the most listened to episodes of the year. So, we uh it seems like crypto I don't even know the term like crypto treasury vehicles or public token vehicles uh is is hot. But Ben, what are we calling these things these days? >> I I've heard someone call them DATs, DAT, so digital asset treasuries, but just called DATs, >> which we'll see we'll see if that sticks. But like crypto treasuries, digital asset treasuries, >> um there a few other flavors of of what they're called.

>> Yeah. Um well, anyways, I wanted to do I mean, there's been so much that's happened since that episode. Uh so I just wanted to have you guys back on and discuss. I'm going to read maybe from your guys's investor letter, Ben, that you send out to LPs. Uh and we can we can maybe play off of that. So for for those who don't know, and for those who missed the episode with Josh, uh the Parfi has been one of the most active firms in the crypto treasury space. Um, I think you guys had your January investment in Soul Strategies, which is a Canadian public vehicle um, focused on Salana. Um, but Ben, kind of quoting you from your LP letter, it said uh, you said, "We believe crypto treasury plays are a deeply misunderstood intersection between traditional capital markets and digital asset markets. While many have

dismissed this wave of companies as an ephemeral trend, we take a fundamentally different view. So maybe with that as the setup, can you just give your, you know, high level like your 20,000 foot view on like what is happening in this in this space right now and why you're so excited. >> So I think there's a fundamental question that is kind of like the first principles question that I think should be addressed headon on this topic which is why should $1 of Bitcoin held by a public company be worth more than $1?

um because that's the dynamic that has existed and persisted with Micro Strategy uh for now coming up on the past about two and a half years, it's traded at a pretty healthy premium to to NAV. Um and so the big question is why? And actually, you know, when I first encountered Micro Strategy, uh, back when they were starting to do their convertible bond issuance, the first convertible bond issuance, I believe, was like in 2018, 2019, they started to buy Bitcoin, um, with debt um, and with cash on their balance sheet and then did the first convert issuance in I think 19 or 20. You know, I scratched my head a bit because like it was difficult. I I couldn't wrap my head

around why an investor would pay a premium for a public company that uh held Bitcoin as opposed to just buying Bitcoin spot markets. And and then certainly when we had the ETFs approved in January 2014 in 2024, like there it felt like there was even less of a reason because you can just buy IBIT and pay NAV. Why would you pay a premium to NAV? Um, but as we've kind of dug into these digital asset treasury plays or crypto treasury plays or whatever you want to, you know, refer to them as, um, I I think there's there's more of an explanation as to why uh these premiums may exist and certainly if you're a long-term holder,

why you may do better holding a digital asset treasury company than underlying spot. M >> I think a big part of that is this concept of Bitcoin per share. So the the the MMO of Micro Strategy or is simple. They would like to increase the units of Bitcoin held per fully diluted share of common stock. That is the mission goal MO of this company. Um what this means in practice is um if you uh hold I'm making up numbers here. If there's like one unit of Bitcoin per share of common

stock at the end of a year if you can increase that to say 1.2 units of Bitcoin per share of common stock you've there you've increased your uh NAV per share by 20%. So the ability to grow NAV per share is a reason why these things over a long-term time horizon could outperform spot. And here's the essence of it, which is um at a in a very simplistic lens, when you trade at a premium to NAV, you can sell stock at a premium and use the proceeds to buy Bitcoin, increasing your units of Bitcoin per share of common stock. When

your stock trades at a discount to NAV, you can do the inverse. You can sell Bitcoin and buy back your stock. So, so when you're above NAV, you sell your stock, you buy back Bitcoin. When you're below NAV, you sell Bitcoin, buy back stock. And both of those capital market maneuvers increase units of Bitcoin per share of common stock. And so >> what you're effectively doing here is shareholders are the beneficiaries of of arbit effectively arbitrageing their own stock whether it trades at a premium to NAV or a discount to NAV. So this dynamic didn't exist with Grayscale because there was a principal agent

problem and you know shareholders couldn't couldn't redeem when it was trading below NAV and Grayscale didn't want to offer redemptions because they wanted to collect management fees. So typical principal agent problem >> on these plays there's no principal agent problem because shareholders are fully aligned. Management wants to increase Bitcoin per share. Shareholders want to increase Bitcoin per share. Um and then on the ET on Bitcoin ETFs, you also don't have this dynamic because the authorized participants are capturing that arbitrage. So unless these these names kind of trade very efficiently right around 1x MNAV, um uh I think there is an opportunity to hold on to them through the cycle and

the best management teams and there are a bunch of things that you know you have to do to execute on what I just said. It's not it's not very simple. Um but you um I believe the best treasury plays will be able to outperform uh spot um crypto prices and and this isn't also to talk about capital markets access and converts and preferred and all the other instruments but at its core you know I think the reason why I think these names are misunderstood just to like nail down the point is that >> um if you can increase units of soul units of ETH units of Bitcoin per share of common stock through capital markets um actions um you have the ability to

increase NAF per share and therefore incre uh outperform spot prices. Not not every one of these companies will do it but you know certainly the the best we believe some of the best performing ones um will be capable of doing it. >> Can I try to repeat that back to you but with the knowledge that I'm not uh as smart on the financial side as you guys so this might sound uh foolish but let me let me try to repeat that back to you. So what you're trying to answer is the main and when whenever someone talks about public treasury vehicles, you're asking the question, why does uh $100 of BTC or ETH trade at a premium when it's held by a public company? That's the big question that people maybe who aren't familiar with these with these vehicles.

That's the that's the number one question everyone asks. Or uh why does Micro Strategy trade it? What does Micro Strategy trade at? That two times NAV or something 1.7 1.8 probably something like that. when Black Rockck's spot ETF trades at NAV. Right. So, that's the question and the answer uh as as you put it lies in the ability to grow the number of Bitcoin or ETH held per share over time. And the way that they do that is by using a bunch of different instruments, right? Uh uh convertibles, preferred equity, um uh at the money issu at the market issuance, ATMs, debt facilities, things like that. And so if you're able to, let's say you have one bitcoin per

share, you then in use all those different instruments to by the end of the year you're at 1.2 bitcoin per share, you could say you just got a 20% BTC yield. Um, and if when you have a positive BTC yield, your equity can then uh outperform the underlying token. Is that did I is that correct? >> Yes. >> Okay. Um, why >> a bunch of footnotes and like you know >> the essence of it I I think is spot on. >> The essence you're like yeah don't don't try these yourself. This episode is sponsored by Katana. If your assets are sitting idly, they're dead. Katana is built from the ground up to bring your bags back to life. Be early to Katana by

joining the pre-eposit campaign before mainet opens at the end of this month. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. Why is this the time that these are going crazy? Like, why? So, if that's sure, like, I just laid it out. Seems obvious. Like, why why is, you know, Q2 and Q3 of 2025 the the time when all of these are happening right now? >> Yeah. I mean, Ben, you start and I'll follow you.

>> Oh, no. You go. You go. You go. >> Yeah. I mean, I I think from a macro standpoint, uh, and from a regulatory standpoint, we're we're in a very conducive environment, uh, Ben actually termed this, uh, we call it reverse tokenization. This idea that crypto tokens will be finding their way into public capital markets more and more, especially under the current administration. And as the the institutional kind of shift in how they think about digital assets and how they treat them uh kind of combines with the progressive uh shifts on on the regulatory side, right? You don't have SAB 121 anymore. Um you can now very clearly own digital assets. Uh there's

not corresponding liabilities. I I think these two trends on both institutional acceptance um where large debt groups like Capital Group feel comfortable owning an instrument that relates to Bitcoin volatility um join with an administrative push to allow public vehicles and public individuals to be uh working with digital assets has provided um this this uh kind of lubricant to all this friction that used to exist which kind of explains perhaps a bit of the grayscale history back in the today. Um so now at least the United States uh which of course is looked at by many other countries as a leading capital market um has this conducive environment where reverse tokenization can occur and

then you see capital markets like the UK or Australia um or or Japan kind of look towards this um and then also be accepting of of their own kind of reverse tokenization trends. Um so so I think those two macro aspects are are critical and then I I do believe that um you know a shift a little bit uh in some of the capital markets towards uh higher yielding or uh uh more volatile instruments because those pools of capital have just faced either very uh dormant uh sets of issuances or the the the sailor argument for pre is actually very interesting where the typical v of like the pref index was five and can he

offer an instrument that is closer to to the 50 plus offered by Bitcoin. So I think there's also this this argument to be made that in certain capital in certain pools of capital as well as certain capital markets like capital markets abroad there just hasn't been an offering that has the volatility profile of Bitcoin and there is tremendous demand in some of these pools of capital to to experiment with these. So I think those are kind of some points on my side. Ben, I'm sure you have something to add there. Yeah, I I I I would say that like the history of capital markets are are like are littered with copycats.

like when something's working like people try to copy it and replicate the the success and the uh you know you saw you've seen this in crypto with like dexes and money markets and all like you know centralized exchanges in every category in crypto like when there's success there are like 50 to 100 ventureback companies that are all you know trying to build towards the same um same product but what what's actually interesting here is like the barriers to entry to copy micro strategy at least at a small scale like you need a shell legal entity um and I guess like a half half decent management team. A lot of these management teams aren't very good, but but you know, it's actually like from a game theory standpoint, like if

you're a failing public company, um you know, this is actually probably like the most EV positive. >> Yeah. >> You know, one of the EV positive things you you can do in terms of pursuing this. And so like a lot of the companies, >> I mean, I I think look, I I think it's true. It's like I think a lot of the companies that are doing this like it's not like you know Meta is pursuing a Bitcoin treasury strategy but the companies that or you know or Amazon um but uh the companies that have less to lose are doing this because they have the shell entity. It's a very easy thing to do. They've seen micro strategy success. And then um the other the other thing I I would add may maybe it's like a slightly more nu nuanced point but uh

there is a diseconomy of scale on these treasury plays in the sense that like Micro Strategy has gotten very big. they own 3% almost 3% of of all Bitcoin and to increase Bitcoin yield per share at that scale um can become more challenging >> because of just like the law of large numbers and so there are some advantages to being small like there no don't get me wrong on the other hand there are advantages to being large because when you're large like they are you can issue access convert markets and you can you know issue these kind of preferred >> equity they're the largest convertible issuer globally, right?

>> Globally, what one of them or they're the largest? >> They're they're the largest in the U. I think the total convert market in the US is 250 billion and they're about 8 billion of that. So, call it like 3% of the entire uh convert market and I think US convert market is like >> and then I was looking at their options open interest. It's I mean it's like it's like it's like Facebook stock. It's like Google. It's like it's crazy. >> It's it's crazy. And like there's like a flywheel there, right? where >> because then you get more efficient uh convert arbitrage. Can you walk through that actually a little bit? Can you explain that to me?

>> Josh, you wanna you want to? >> Yeah. No, I I think um the TLDDR there is the the more liquid your stock, the more developed your your option chain, the more volume on the options, then your capacity to issue converts to a lot of these players that are um effectively uh conducting arbitrage is is higher because then they can go they can have long exposure to um the convertible node instrument where they're basically just at a very high level like what they're doing is are valuing a bond component and then a call option >> and because of the volatility profile offered by Micro Strategy stock which you just pointed out um through like you know the options uh because that

volatility profile is normally higher than like the priced involve they can then go and then they can find a way to go net short on the equity and capture that difference in the priced vault versus the actual inherent vault in in the equity. And so if you have a robust equity and option market that means you have more capacity for them to conduct the other leg of their trade which means that they can then go and buy more notes. Um but I think the key point to underline which you've seen folks like Sailor and Simon from Metaplanet talk about a lot like you know I think they say like velocity is vitality like volatility is vitality.

>> Yeah. If you're able to have this volatility and this capacity uh and by velocity I believe they mean like volume of shares then you're able to effectively have more capacity to to issue convertible notes uh and other structures. Um yeah I don't know you would add anything to that. Yeah, like I I I think like if you're if you're buying a convert convertible bond of of Micro Strategy, um uh what you what you're likely going to do if you want to like effectively, you know, sell the V sell the option component is you're going to go to the options chain and uh you're going to sell the corresponding call option at the strike and the maturity that uh of the convertible note or you may do a shorter one and then roll it. Um and um

there so Micro Strategy ability to issue convertible bonds is somewhat predicated on people buying the call buying call options because you need people to buy the call options so the convert ARB desks can then sell those call options to the buyers. So um you know one of the I think potential risks to micro strategies ability to continue to access the convert market is twofold. one is they need their common stock to remain volatile and if you look at um IV uh on micro strategy common common stock it's actually kind of come down over time um and I believe it used to be you know more volatile than spot bitcoin now I

think it's actually like slightly lower um and then the other component is uh issuer level concentration so if you're a convert um if you're a convert investor you know, you can only you may only want to have so much exposure to a single issuer of converts. So, um there's value in having other other issuers kind of enter enter kind of the market even though the risk profile may not be different. It's just like you know kind of an arbitrary portfolio level risk metric that any any fund would look at.

Um, and so but but I think like what's what's really interesting uh just and and Sailor's like Sailor's pitch is is so interesting because he talks about this like on five podcasts a day or five conver and he always finds a way to like articulate it like slightly differently than the time before. The way I kind of like think about what he's doing fundamentally is he's securitizing Bitcoin and he's slicing and dicing the return profile to cater towards different types of buyers and um you know uh if you are um if you are a retail investor and you can go long Bitcoin but there's no way you could kind of access convert markets or access preferred markets or uh run an ATM like

you don't have that capital market Swiss Army knife in your pocket because you're a retail investor. So, he's kind of created this new product which is like a securitized Bitcoin. >> And um I think that's kind of like the secret sauce behind what what he's doing. >> So, and I would just quickly add that at scale too, I think they did three billion in in prep issuance this year and which I think they're one of the largest preferred issuers. And also like another key point is he's sold I think 600 million strategy sold 600 million of additional prep uh securities uh through an ATM structure with the uh preferred so he's not only doing I think he had

this presentation earlier this week where there's this neat chart of kind of the composition of ATM over time and it's like it's it's fully orange for the first couple weeks in the chart because that was just common and now you start to see you know there's like the different preferred instruments that are also being sold ATM. So to Ben's point, he's built these new financial instruments as he securitizes Bitcoin. And not only can he do primary issuance, but he can now also kind of, you know, pull the the toggles on how he wants to do his ATM because some of these prep instruments actually trade at a premium to par. And so you can kind of start hitting the ATM there while while cooling off on the common. you know, there's there's a lot of thoughts, I'm sure, that go through his head as he

decides which ones, but uh it's a lot more of a sophisticated uh capital markets function than where they were even kind of just six months ago. >> This would be like uh STRF or something, which is like the 10% preferred. Yeah, he's b Yeah, I like that you're the definite the explanation of like he's tokenizing or securitizing all of Bitcoin into these different instruments. That's a good way to put it. Maybe zooming out for micro strategy for a sec, Josh, how many um can you talk about this the scale of how many deals are happening right now? Like how many deals do you guys see? Uh how big has this become? Like how much have you guys deployed? Like talk to me about the scale of this.

>> It's uh the scale has even just relative to when you and I uh were last in the podcast with Tyler Evans, the scale has um grown exponentially. Uh so I believe there are at least 150 different Bitcoin treasury companies around the world. That doesn't include you know ETH and Soul companies and and and the longer tale of assets. So by count you've had an expansion of the universe whereas a couple years ago it was just strategy you know a couple of the Bitcoin miners and Tesla that held Bitcoin. Um you now have all these new entities. This is the now the marginal uh uh buyer profile of Bitcoin, which we can get into why that's that's really good for Bitcoin in some ways. Um and then you've had I believe around 250,000 Bitcoin that are

owned by uh p new public entities other than strategies. So they're also starting to add scale. Um but in just like June alone, I think there were 21 new new companies. So the the pace of new companies coming about especially in other capital markets has been increasing. I think at Parfy we've taken a serious look at at least you know 60 to to 70 of these in some shape or form. Um we are active globally at the firm. So we've been working in capital markets in in Europe in Asia um in in Latam. >> So you've you've looked at you've looked at 60 or 70 of these. How many do you think you've done of the let's call it 65. How many have you done of the 65?

Um, I mean we uh in some shape or form have invested in and or committed to at least 10. >> Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR. Katana is launching with notable ecosystem of primitives, assets, and partners like Morpho, Chainlink, and more. Be early to Katana by joining the pre-eposit campaign before mainet opens at the end of this month. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk terms and conditions apply. Do your own research. Been following these decently closely. You pair is now the first call

for people launching a treasury company or one of the first calls. What are the signs that you look for? I guess like the the green lights for like oh this is a no-brainer and then also the red flags. >> Yeah. Uh I can start with a couple. Um so normally uh you know first off we like to study the capital markets that uh the the entity uh will be based in. So we spend a lot of time in the US uh but there are really compelling opportunities we believe in uh other capital markets that yes may be smaller in size but there could be certain constraints on why a lot of institutional capital has to remain directed uh to that home market.

Uh there's also home bias in certain retail behavior. And so we will go in and study, you know, what is the the debt and equity capacity in this market? How what's the percent penetration of retail? Uh what kind of volume is is being driven? Um you know, is is there uh the ability to build uh financial instruments that are conducive to acquiring more Bitcoin per share? do we have to come in and design a synthetic ATM or does an ATM facility exist or you know how how can a company effectively build up its Bitcoin uh treasury. So so step one is market analysis. Step two is what are the the players that we want to be working with?

Uh and and a lot of that really comes down to something Ben alluded to earlier which is quality of management. We want to work with folks that uh really understand not just the the Bitcoin aspect of it but also the financial aspect. And sometimes it'll be a a one-two pair, sometimes it's just one individual. Like I think something that Michael Sailor is really good at is being able to speak to his Bitcoin and Micro Strategy retail fans and then also being able to hold a a conversation with, you know, a convertible note uh investor. And so does the team have the capability to understand and communicate with those those uh individuals and uh entities and are they going to be folks that are that are in it for the long term? because, you know, given the the velocity of what's happening, there's a

lot of opportunistic people out there. And our job is to to really partner with kind of longer term folks that want to build something a lot larger. and that when the the kind of bow breaks and and if if if things go bad, they will have the knowledge and the the people around them to be able to, you know, maintain at NAV um or, you know, even above NAV and be able to manage that situation. So, I I'll start with those two and Ben, I'll pass it to you for others. Yeah, Ben, maybe I was going to maybe a follow up on that is like is there a deal number maybe let's say the you know the 15th BTC treasury company where a new entrance simply can't command a premium premium above NAV.

>> Yeah. Look like the the most reductive way to look at this is just like supply and demand and like do you need the you know 51st or 101st like Bitcoin treasury company? Um the reality is is many of these are are perfect um perfect substitutes um for for one another and um what I expect to see so so so we we kind of can walk through like the view on what is the long-term equilibrium for Bitcoin treasury companies of public markets what does the space look like in one year three years 10 years because I think the answer could could look could be very different but I think certainly in the short term like we're seeing saturation in terms of number of treasury companies. And part of the

reason for that is there's not great price discovery on some of the new ones because a lot of the PIPE investors are not unlocked because you need to wait for SEC approval and the floats on these names are are very limited. So there's not great price discovery. Um not dissimilar from like a high FDV lowflow token. So uh but because the price is is you know is optically high like it's encouraging others to kind of continue to pursue the strategy. Um but when I think the dust settles I do think many of these will trade at discounts to NAV.

Um I think that when they when they do trade at discounts to NAV um it will um prompt and catalyze a a wave of M&A. Um, I also think that, um, right now we're in this like pure Bitcoin accumulation phase in these companies, but I think we're going to move to a phase where, okay, you have the Bitcoin, uh, maybe you're trading much closer to NAV, so it's difficult to kind of increase Bitcoin per share unless you're issuing converts, but even then there's like kind of fixed capacity. So then it's like, okay, what are you going to do with that Bitcoin? Can you earn a yield on it? Can you, you know, run a business model? uh you know o around the Bitcoin centered around Bitcoin financial

services or borrow lend can you generate cash flow from other real assets to drive Bitcoin yield per share? Actually Meta Planet um the past couple days announced they were going to start like real world cash flowing businesses >> to increase their their Bitcoin per share. So I I think right now we're in this like accumulation phase. there will be this this kind of like ex market excess and then I think you'll see a normalization over time to like a more long-term equilibrium state and I I think um Josh mentioned it on uh the last time I was on the podcast but I think this is like a pretty critical point which is you know we kind of like are constantly asking ourselves what's like the

barecase base case and bull case for for any investment and like when we make these investments we we aim to structure them as heads you win kind of tails you effectively break even relative to holding the underlying. So like what that means is if we're investing in an ETH treasury company you know in a down in like a you know a realistic downside case we'll track ETH price uh you know um but in a in a positive scenario will realize some sort of premium to to to NAV um and so from from that lens I think these for pipe investors for convert investors for the private investors can be can be very attractive but I think the dynamic is very

different if you're you know a retail investor just buying these things in the open market like I think the math >> uh changes um quite a bit. Um the >> wait say say say say say say say say say say say say say say say say say say say say say more about the math changes quite a bit meaning it becomes much more risky if you're just a retail investor buying like eset in the open market or maybe I won't pick on one thing but like uh buying one of these in the open market you're saying it makes a little less sense if you're just a retail investor >> absolutely like if you're buying um these names in the open market you have to be very cognitive around what the mnav multiple that you >> and you have to be also cognitive of when the you said when that you use this

word when the dust settles so to me I read that is when a lot of the maybe the unlocks happen or when people get like basically have the ability to sell which my understanding is a lot of these things are kind of like Q126 um but I don't really know so may maybe walk me through like what when the dust settles mean >> yeah so so I think there's like two two types of dust that that can settle like one is like a lot of these deals are spaxs where um so like you know Nakamoto uh you know asset entities which was VC Ramaswami's deal um uh these these are all spaxs and um they require SEC approval. So um uh until there's SEC approval, the deal actually doesn't

close. So PIPE investors like don't actually h uh have the you know possess their shares or can't sell their shares until until the the actual like there is actually SEC approval. I think a lot of these deals are you know the mar publicly these companies have guided towards like the back half of this year when they expect to receive that that approval. So that that's like one form of dust settling. The second form is like just like when you have all these Bitcoin treasury companies at some point the market will be oversaturated. They're all somewhat zero sum like they they are all they're all pushing up the price of Bitcoin. I think they're all quite good for Bitcoin price, but um they're all competing with each other in

terms of trading at the marginal at a premium to to MNAV. Um and um and so like I think when the market reaches like an equilibrium state, like we'll see like which ones trade at premiums, which ones trade at discounts, how long those premiums can hold. But I think this will this will fully cycle. And then by the way, the last thing I really want to um underscore because I do think it's it's a it's a critical market dynamic is like okay so it these deals all tend to be zero sum between four groups of people. Um uh the sponsor like the group that's like kind of like organizing and leading this and the

manage kind of the management team behind it. uh the PIP investors, uh existing shareholders, and then the fourth group are like the bankers and the lawyers who typically take like transaction fees or warrants. Um you can't create value out of thin air. So like the pie is kind of divided among those four constituencies. And um uh and then you know the the other group I would say is like the the you know public market investors that come and and buy these names and um uh but I I do think there's a lot of like as we've as Josh and I have have looked at many of these deals I do believe there's a lot of like mercenary short-term behavior

>> um you know around the sponsors of many of these deals where there's not true long-term alignment. And then on the PIP investor side, there's also not long-term alignment. Um, like this isn't like a one-year cliff for your vest like you'd have with a TGE for a VC backed token. This is um this is like, you know, I think much more mercenary in nature and even on even on the main. >> So then as the investor, how do you think about that? Is it like, hey, let me let me get in this thing. Let me do this deal and let me get out in six months. Well, I I think that um it it depends on on the the deal that we're looking at and the team and and really like our our view around them, the market they're in.

>> Like you're not trying to hold these things for the next, you know, if you make a private investment, you're in a company, you're holding that for at least four years, hope, you know, probably longer, five, six, seven, eight, nine, 10 years. For these, it's a much shorter time horizon, right? >> Yeah. I mean, I think the the like exit decisions on on anything are going to be dynamic and it's going to be based on like what you know, where it trades relative to kind of fundamentals. So, in this case, the key fundamental is MNAV. So, if something were to trade at like a massive MNAV premium, like the the bias would probably be more towards, you know, a d-risking decision, whereas if something trades closer to, you know, that 1x threshold, um, you know, it the decision may may tilt otherwise. So I

think it's going to be it's it's a bit more kind of like dynamic. But I would say yes in in general like I think these a lot of these Bitcoin treasuries like let's just call spade a spade. I mean these things are like financial kind of instruments more financial investments. These aren't technology bets. Um and um uh and so I I think like the capital involved is a bit more mercenary. >> Yeah. um and um economically focused rather than you know typical like venture capital which is more like you know founder founder focused >> but I think there I agree with that and where we um are more positive is there's a there are a small small sliver of

companies where like management has um their their incentives locked up gated based on Bitcoin yield for example um very clear uh uh kind of dynamics on the cap table where they're not trying to hide anything and a group of investors that um are longer term thinking. Uh so we we do try and work with those people. That's a big part of what we look for. Um and and I I hope that that starts to become the norm. But to to Ben's point, especially with the velocity of these, I I I do see a lot of the vehicles being much more opportunistic um where effectively the uh sponsor and

the banker groups um have a lot more a free option visa v the the other constituents um because they're going from from zero to whatever they can exit at. uh but that there are uh there is some optimism in a couple of of great teams in the space that are trying to build something for for much more the longer term. I don't know actually the right way to ask this question, but it's Ben. It's what we were talking about at the Coinbase Summit, which is like you you were like, "Oh, you should just do one of these things, right?" Kind of like I mean, I know you were kind of joking about that, but you know, I did I had I got dinner with Sailor back in March and he's like, "You should really do one of these. Like, you should turn block either turn block works into a one

of these Bitcoin treasury vehicles or go do something on the side. You guys have the marketing arm and you could find the because you need two you need two things, right? You need the financial genius, you need the marketing genius." And you know, we've got the marketing distribution. And I I guess pretty down. I will say and this is where I don't really know how to ask the question without kind of uh bashing anyone else is like the people who are doing these seem to be the same group of people who kind of did the the spaxs in 2021. It's like it uh it feels a little charlatan and like uh really marketing heavy and kind of a cash grab and how do you think about that from like the reputational like the I don't know do do you know what I'm saying? I don't even know the

question to ask here but do you know what I'm saying? Yeah, I I yeah to totally totally kind of get the get the gist of the question. And I I think that the way we've kind of like looked at these things because look, we have a lot of portfolio companies that come to us and say, "Should should we do one of these things?" And um the way we kind of have looked at this is if you have a great operating business, uh you know, and you do a Bitcoin treasury strategy and you combine those two, you struggle to get credit for both. Like it's a case of like 1 plus 1 equals 1.5.

Um because the market has to like take the operating business cash flows, ascribe a multiple to it. Let's call that like a and then look at the nav of the crypto, call that b, and then value a plus b. And it's like it's complex. And so um typically the c the the companies that have pursued this or the people that have pursued this are doing this from like true shell entities where there's not a very strong existing operating business. You know Micro Strategy is is an bit of an exception. Um I mean their operating business was not doing well but it's actually had you know it's doing 75 80 million of IBIDA a year. So it's it's actually like a real a real business. But what I would say is um well one I think Blockworks has you

you and Mike have built an incredible business that's very well respected in the space that you know has uh a lot of promise and a very strong financial position. And so I I think that to combine that with, you know, a Bitcoin treasury or crypto treasury play would be um kind of like throwing out the baby uh with the bathwater so so to speak. Like you're not I I don't think it would be like enterprise value maximizing. Um but um I I certainly think that like people like yourself that have like very strong marketing presence in the space um as well as financial acumen certainly have the ability and option to go denovo pursue these ideas and like I think

you've seen with this first wave of people that have done it they tend to be people that have you know followings and personas and microphones um uh and um and there is this principal agent problem. I mean, it's like there's there's money to back the those those, you know, personalities. Um, so, um, so if I were you, I I wouldn't start one of these things, but that that's just, uh, that's just me. >> Yeah. Yeah. Um, yeah, it's interesting. Uh, what about the price? Um, I posted in like the Empire Telegram channel like, what do you guys want? What do you guys want to know? you know, you know, talking to Ben and Josh and uh the the first question that someone asked was um

when will all of these crypto vehicles actually result in onchain price action? Basically, you've got these Bitcoin vehicles, they're all raising all this money and you know, you see in the headlines, you know, X company just bought 7,000 Bitcoin and the price of Bitcoin doesn't move or like all these ETH vehicles right now like ESB and Luben and like all all these things and you know, they're buying like tens of thousands of ETH but the price isn't moving that much. Why is that? What's the dynamic? >> Yeah. Uh well, I think there's a couple of factors. One small asterisk is in uh some of these deals that are pending SEC approval, uh the cash many times sits in escrow. So, it actually doesn't hit the market. Um even though it's a large

announcement, a lot of announcements are also a ATM program announcements. And so, the numbers look big, but uh that's going to happen over a long period of time. So, so that's a small asterisk. Um but but I I do believe and it's always hard to um kind of attribute where performance comes from uh in a a kind of global sovereign asset that can be bought in so many venues. Uh but the uh performance of Bitcoin throughout the the first half of the year, I think part of that did have to do with uh at least the first wave of of Bitcoin treasury companies. Um what what I think is a little bit more interesting to share with with those folks is this year in my opinion has marked a

fundamental shift in who the marginal buyer is for Bitcoin. Uh you know in 2013 to call it 2017 it was individuals and then and then it became funds and capital vehicles that were leaner and could move faster. And now we're entering the era of uh public companies and governments which can not only buy in size but will retain those assets on their balance sheet for a much longer period of time. And so if if you if you have some kind of patience and and see all this play out uh what's effectively happening is is supply is getting constrained at a at a greater clip than before. Um and I think that's going to add a very interesting dynamic. uh especially when you combine governments

as kind of the largest and most patient owner of assets uh coming in after these these entities. >> Got it. I don't think I follow why it doesn't impact the price of why Bitcoin and ETH haven't why hasn't ETH gone up a bunch if you know ASB is buying a bunch of ETH. >> Well well the the the I mean look like if you look at Bitcoin just to put some numbers around what's happening. So, uh, public companies at the beginning of 2025 held 600,000 Bitcoin. Uh, today they hold about 850,000 Bitcoin. So, they've accumulated about 250,000 Bitcoin year to date. Um, that's about 1% a little over 1% of of all Bitcoin in six months. Now, over that time frame,

uh, year to date, Bitcoin's up about 20%. um 20% on a $2 trillion asset is roughly you know 400 billion of of you know market value uh you know uh marktomarket value like I think I think one of the look like >> I see where you're going with this >> I think like if you look at like the like kind of stock toflow and like kind of this idea of like a flow amplification multiple so for every dollar of fiat that buys Bitcoin how much market cap does it create um historically that number like there have been different studies that have done around this is like somewhere between like five and 20 I guess is like a reasonable multiples but I I think the reality is like I think the Bitcoin price has moved but offsetting it um is

I just think it's like the law of large numbers and if you look at like V on Bitcoin I mean it's come down like over like the past 10 years it's just drifting lower and um I think we've you know we've personally my this is my my personal view is like we kind of moved out of the four-year cycle I think for alts for Bitcoin. I do think we're in like a new new environment where I think Bitcoin is a bit more of a of a compounder and I don't think we'll see the I I personally don't think we'll see the big draw downs that we've previously seen like the that I'm talking about the 60 to >> 80% draw downs. I still think we'll see meaningful draw downs, but um uh but but

I gener but and I also don't know that we'll see the um you know like the square wave um you know uh up moves uh to the same degree that we've seen historically like Bitcoin's just grown up as as an asset. It's it's just much bigger and it takes more dollars to to move the price. Um and then on the ETH point um well I like a lot of these ETH treasury strategies actually there was a surprising moment in the market. It was bizarre. There were like 60 or 70 Bitcoin treasury strategies. There were like 10 soul Salana treasury strategies and there were like no ETH treasury strategies because I mean ETH as you know has has been a bit of a punching bag. It's been

a tough story for the past, you know, couple of years. Like the ETH BTC ratio has continued to bleed lower. Um, and uh, most of the ETH treasury companies like the three largest ones, Sharlink, uh, Bitmine and, um, Bit Digital have all been like very recent launches. And so I think like and if you look in the past say week or so, I think ETH has a bit more of a bid. >> Where does ETH end the year been? H the really the tough questions. Okay.

So, you know, I I would say like I think ETH I think the sentiment around ETH has gotten better in the past few months and I think people are looking at ETH now as if you want to go long the growth of stable coins. Um, one framework to think about like value cruel is like you know you own ETH the asset. Um, and uh, you know, all uh, you know, I I think 60% of all stable coins are are on are on Ethereum um, with the another like 25% on on Tron. Um, so like ETH is is fairly dominant in terms of like general

purpose smart contract platform in terms of like stablecoin TVL and stable coins are like you know next to crypto treasury plays as like kind of like the focus in the market right now. Um and and so look like I I think that narrative is picking up. Um but um I I think the other dynamic though is like ETH is a ETH is a $300 billion asset and um it's a technology bet. I don't think Bitcoin is a technology bet anymore. Bitcoin is like a finished product. Like Bitcoin does not need to change and it's it's it's kind of more of a macro asset now. It's a financial bet on monetary fiscal irresponsibility. It's a supply

demand bet on like fixed supply like but it's not a technology bet and Bitcoin has no competition as a non-s sovereign store of value or I mean it has competition but it's it's in a monopolistic position in in that seat whereas Ethereum I think many people have have fundamentally and rightfully so questioned whether or not it will be the MySpace of uh smart contract platforms and and so it's I think that's deterring ing some flow in, you know, and buying ETH because now you're like, "Oh, I should also buy some soul and I should also buy some other L1's and L2s because I just don't know who's going to win." And so I think the story around Ethereum is much

more complex than than Bitcoin. This episode is sponsored by Catria. Catria is the first zero knowledge rollup to enhance the capabilities of Bitcoin block space, enabling Bitcoin applications and unlocking Bitcoin's full potential as a programmable financial platform. With Citria, developers can now tap into Bitcoin's liquidity to build scalable payment systems, privacy solutions, and more. Citria is currently in its testnet phase and is approaching its mainet launch. To learn more about Citria, follow the link in today's show notes. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research.

>> So, getting back to the crypto treasury vehicles, maybe this tying these two concepts together. So, we've got the Bitcoin ones. We've got a lot of Bitcoin ones. We've got a good amount of ETH ones. We've got a few soul ones, but there's a few more soul ones coming to market pretty soon. I think you know, later in July or maybe August, whenever it is. Uh, I've seen some fundraising for like an Athena one. I've seen some Hyperlid. And I've seen like Tao and beyond those six assets. I I I I haven't really seen any. But I'm curious if you guys think like are we going to get these vehicles for the top 50? I originally thought yes, but now I'm like, "Oh, maybe that was a silly thing and it's not going to happen." But tell me tell me how we should think about

that. >> I I believe you will see more vehicles with longer tail assets. Uh you know, outstanding. There's also one or two XRP ones. There is a uh um Tron one. Um there there will for sure be I'm sure a couple of BNB ones. So I I do I do believe you're you're going to see more. Um I I would kind of bring back, you know, Ben's view on on needing to reach an equilibrium before that that stops.

And so as long as the constituents in the market um provide the capital and the uh shell company to do so, I do think there's going to still be more altcoin treasuries coming to market. The the biggest question that I always, you know, pose to to those founders that ask us because a lot of folks do do call us and say, "Hey, should we do this?" is like what is your long-term strategy? Because yes, you could maybe get out the gates with the first round if you effectively have all the investors that already own your token subscribe in kind with some cash. So you can clear you can clear step one, but then who's going to really come in to buy token 250 uh

related hold uh in in terms of the next round like once you've exhausted the most aligned people already. Uh so my hypothesis is while you will see more of these come to market the success rate at raising another round will be immensely lower than that of uh bitcoin treasury companies globally for example. >> Yeah that's interesting. Can you walk through actually on the like the the ink kind part because my understanding is like these Salana vehicles that are raising right now are having a decent bit of success because there's so many funds that have locked Salana right now.

So you can kind of contribute that Salana in kind. Can you walk through this dynamic? >> Yeah. Yeah. So, so I think at at a high level there's two attractive characteristics of uh this uh this vehicle proposition to a a current investor that has uh locked vesting exposure. uh if we all put our hats on as as those investors, one is I can now uh expedite my timeline to liquidity and two I can um effectively uh uh kind of garner some like quick gain if if there's a mechanic where I can take a you know a discounted asset and and realize it immediately that

they're both tied together. But I believe that's why some of these uh vehicles are of interest to those investors. Uh again, I think the the key question I would bring up is who is going to be the buyer on the other side. Um, and I I find that for some of these the answers is is truly difficult to say uh to to kind of uh figure out because you're going from a very constrained uh low uh like like high awareness circle but very constrained into like the public markets. um where you know, not only do you have to tell your story as a company and explain the the the whole accumulation strategy, but you also have

to go and educate them about what your asset is and what it means. And um yeah, I I just I I see a lot of difficulty to be candid in raising successive rounds, but I I do understand from a very objective lens why certain investors would would see these vehicles as as interesting because um it is beneficial to them, especially if they're they're locked, for example. >> Yeah. I guess you also just don't get the I mean strategy can issue almost 10 billion convertibles at almost zero zero coupons right with you know these far out of the money strikes because it's because it's Bitcoin is the underlying but if your if your underlying is like some random L2 token you don't really get the you know I think Ben you

mentioned like the Swiss Army knife of financial instruments you don't those instruments aren't really available to you if your token's been down only for the last three years right >> yeah no that I think that's I think that's Right. I think the dynamics are different on the altcoins. Like look, I I I I will say though that there is that this really interesting dynamic that Josh touched on, which is the time preference. So like the time preference of these public company treasury vehicles is uh is very low. Like they like if you could give Michael Sailor the option to acquire five-year locked Bitcoin at like a 2% discount, he'd probably like prefer to buy that than like buy unlocked Bitcoin at spot,

right? As just like a hypothetical scenario >> because his time preference is so long, you're saying? >> Yeah, it's so long. Like he he like he's he's going to hold his I plan is to hold forever anyway. So he can and and he already has so much liquid Bitcoin that like he could sell that initially if he needed to if he needed the the liquidity to either buy back his stock or or or or do something else. So the the reality is is like these public treasury vehicles have a very long time preference >> relative to uh you know retail and venture investors that hold these lock tokens. So it's almost like a transfer of that time prefer the arbitrage is that you're putting you're you're you're kind of moving the the time preference into a longer time preference vehicle. Um and

and as a result the discount gets much much tighter. Um, so I think it's possible that, you know, I think a lot of these entities, right, that issued tokens, right, and are now just like these legal entities that pay developers to like continue to innovate, but they don't have a core business model will end up being like the vessels that combine with public companies. And and I I think the other element Josh touched on is a great point, which is like >> marketing. like if you do have a public company um you can at least tell your story to public market investors around what you're building. So there it is like a billboard. Um in addition to being a financial um accumulation play, it is just like a billboard. Here's what

we're building. Here's why it's important. >> Um and uh it it's like a way to expand your microphone. And so I do think there's there's some benefit from that as as well. >> 100%. 100%. It's fun. I mean, what do you make, Ben? What do you make of this idea that like the liquidity in crypto is now in the capital markets? It's not it's not on chain. >> I mean, it's um yeah, like >> it feels it feels like Circle's IPO was the moment where it's like ah it's it's game on in the public markets right now, >> right? It's um it's it's not necessarily like the the future we all like were kind of like building towards a few years ago. Um but um yeah and I was like actually looking you know um there's a great website by the way called

bitcointtreasuries.net net um that tracks a lot of like the Bitcoin holdings and I was looking on there and like if you look at the ETFs plus uh public companies those two kind of constituencies now own 10% of all of all Bitcoin 10% which is ve you know very very meaningful and these these ETFs just launched like you know a year and a half ago so you can kind of like imagine a state of the future that like where you know maybe 20 30 40% of all Bitcoin is owned by public entities. Um and and and look is that um what what do we make of that? I mean it is I I guess like it's it's one thing one conclusion to

draw is that you know equity like the equity rapper is still the kingmaker in terms of like it's the easiest to trade. Um it's the most accessible. Um and it's the most liquid and you people don't care about 247 liquidity. they're fine with um you know eight hours a day, 5 days a week liquidity I guess. Uh so so like it's um >> uh but but you know on the flip side of that like if you look at the DEX to sex um you know volumes like yeah it's going up and and actually part of that I think is like >> centralized exchange volumes are are kind of like a bit >> um >> they're flatlined a little bit. flatline because I think like they're competing

more with like the brokerages but dexes I think are still really good at the long tail. So I think like the centraliz like if there are three groups like the traditional equity markets, the centralized exchanges and the dexes like I think the centralized exchanges have maybe uh shown the most like kind of market share loss of those three because of that that dynamic. >> Yeah. Um, if you guys had a dashboard up and you're kind of like looking at a dashboard and you put a few metrics on there to look at like have we moved into uh risky territory here like you've got kind of like a top signal dashboard.

What metrics are you looking at? Is it like option skew like borrow scarcity premium veloc like convert you like what I don't even like what are you looking at? So, so Josh will probably have like a bet better answer than than than me on this, but I I'll kind of like keep it really simple, which is like I I think the the bellweather northstar KPI for this whole ecosystem is the Micro Strategy MNAV premium. Um that I think is like a very important um one to keep an eye on because you know Micro Strategy still owns 70% of all of all the public uh company owned Bitcoin.

Micro Strategy is still 70% of that market. Um and um you know they're also probably the buyer of comp of other companies if they trade below uh below 1xm MNAV. So I think that is like the that that I think is the best um or most um high signal metric to evaluate in terms of understanding the longevity of this particular kind of like market cycle. Yeah. No, I think that's very well articulated. Um I I you know what would my dashboard have? Uh I I would I would definitely have that. I would also add you know what does ATM activity look

like? One of the the good things about Micro Strategy is they're they're very open with how they disclose ATM activity and so you can measure it week to week because that kind of gives a little bit of a signal of how much capacity there is, you know, to to absorb and um we can then go and and take that and use it as a forecast for what is relative capacity look like in in other instruments to absorb um you know more creation of these instruments. So, so that's definitely one. Um, looking at the uh trading activity of of like the OTC markets, a lot of these international plays actually have OTC listings in the US and how that's fairing because there is this fascinating phenomenon and maybe

it's for another time of kind of the the tail wagging the dog where these OTC instruments actually drive price action in local markets. Um and then I would I would also uh take a look um at what exactly is happening in the capital structure in terms of yes bitcoin per share but can we go deeper um what's the rate of of share issuance what are the type of of buyers that it's going to um because I I think you can then understand you know how that capital uh uh table's evolving because when things go south you know that that's going to be really important to you know, who who the marginal actors are in in these uh treasury plays. And then I I'll

highlight one metric that has sparked a lot of debate. I I wouldn't know if we'd have it on our dashboard, but it's one that we find really interesting. this quote unquote days to cover has emerged as as a topic of conversation in the Treasury community, which is at the current pace of Bitcoin accumulation, how many days does it take you to cover your full NAV um um or or to effectively like get to to NAV on the on the market cap standpoint. Um, it's it's interesting because it it does allude to this idea of, you know, the velocity that your your Bitcoin per share is expanding and the ability for others in my opinion to justify buying in at a higher price. Um I do still believe that the jury is out on you know whether that

is a true indicator of your your ability to enter in or uh if you kind of study the history of speculation. There's a great book by by Edward Chancellor on it actually like people do also make metrics then justify higher valuations. So, I think we're it's a really robust debate within Parfi about is this a metric used to justify higher MNAVs uh or or is it really a way to articulate the pace of Bitcoin accumulation. I think there's arguments for both, but uh that's one that I've seen on a lot of other people's dashboards.

I I also wanted to to just like add one thing because I just want to like address something head-on which is a question that like we we get asked a lot about which is uh you know when will there be forelling of the this Bitcoin or ETH or soul held by by public companies like this is a very common question because people are viewing these as like very levered um plays but I I just want to um highlight that Um uh the capital structures of these companies are generally effectively equity only for the most part with the exception of uh the most levered one is Micro Strategy. However, um they have no debt. It's all converts and the the way

they've the converts are at about 15% loan to value. So said differently, there's about seven times more Bitcoin NAV than there is convert debt. Um and um they've structured this in such a way where their converts like they have no they're generally 0% coupon. So they don't have to pay a bit a lot of cash flow to service those those uh those converts. And then uh the other interesting thing is sailor tanched up the converts. So they mature like every one to two years like there's no big cliff maturity. So it's it's like a very very manageable and I think durable and resilient kind of capital structure the

way he's he's designed it like there's no debt there's no and there are no covenants on these converts either >> where um you know like lenders can like kind of come in and and like force liquidate the Bitcoin. I do think that like at least today and like it could change because these treasury companies will compete and maybe one of them wants to go further around on the risk curve uh to differentiate but as it stands today the ones we've studied there's you know effectively no kind of like teeth that creditors would have to like force liquidate um the the Bitcoin which I think is um >> uh which which I think is something like really really reallyant important to to

um to uh like just highlight for for people. >> Yeah. Interesting. Um as we think about wrapping up, Ben, what do you think about the or or Josh, either of you guys or both? Um like if we think about kind of the endgame for these or maybe not even the endgame because there's no real endgame, but like uh a couple years out, what is it, you know, as the as the dust settles and like the you know, people start getting the ability to sell like is is is Micro Strategies just going to buy up a bunch of these? Is this like will we have these things for like the top 50? Like what what is this? Will every major index include at least you know several crypto treasury companies?

Like what is this what does it I don't know if you guys have a vision yet on this what this looks like but would love to hear it. >> Josh, you're smiling so you can go first. Um, you know, I I I'll first start by saying that this um while a lot of these I do to Ben's point, I do think we'll go to a discount, um it's a completely new era for our asset class in the sense of the amount of new instruments created by all of these entities, not just their own shares, but converts or option chains will effectively kind of breed a whole new ecosystem of uh investable

opportunities that will shift as volatility changes as idiosyncratic factors in these companies change. And so what does the end state looks like look like? I think it it is going to be you know generally a lot of these will will trade at a discount and will be consolidated or liquidated. Uh I think others will find as their market leadership strengthens the ability to access new pools of capital. uh like I I would if if viewers have time there's a great section and I think it's a Q125 uh strategy earnings call where Sailor kind of gives a bit of his roadmap to how he wants to get to institutional uh grade debt. So I think some I think that the top ones will be able to access new markets that we haven't seen today. Um

and and I do believe personally that uh global capital markets will each have a homegrown player or some form of exposure domestically to capture those pools. So I I I believe you know fragmentation should should uh uh be reduced um in in home markets but then globally I I do see a a kind of a strong case to be made that there should actually be multiple of these in other markets. Um yeah so that's my endgame. >> Yeah. Look I I just you know in uh I think my my points are one consolidation uh is I think inevitable. Two is business model adaptation. So you own the Bitcoin, but you're going to want to

pursue yield opportunities. You're going to want to build Bitcoin enabled business models. You're going to want to generate cash flow from other real assets. So I think these like the right now we're in the accumulation phase, but I think we're going to move towards a phase where it's like the question is how do you differentiate? And then the last thing I'll say is um you know Figma uh this you know was covered like had you know when they filed their S1 they held uh you know some uh bitcoin on their balance sheet in the form of the the bit they actually held the bitwise ETF but I I thought that that was like one of the more bullish signals because they're not a Bitcoin treasury company but they are a public company a very reputable technology company that just

holds Bitcoin on its balance sheet because uh from an asset allocation standpoint believe that's like a prudent place to put their cash in marketable securities to allocate some some to Bitcoin. And I think what the the the the the um domino that hasn't fallen yet is like a mag seven company putting a slice of their cash into Bitcoin and or even a top for like I guess I guess like Tesla has. Um so uh but but it hasn't been like ubiquitous across say like the Fortune 50 or the Fortune 100. Yeah, we haven't seen Google or Meta and like I I would kind of discount Tesla because of Elon's just craziness. Um, and it's almost like if you're an institution as they would say, you haven't seen a quote

unquote real company. I mean, Tes Tesla is real obviously, but like I think I think people get what I'm saying. >> Yeah, 100%. Yeah. And I I think that when we start to see that, I think there'll be a bit of bit of >> So, Ben, I just saw this from uh from Bitwise, which is the um it's a it's a great thing. People can pull up just Matt Hogan's Twitter and they can look at it. It's a the corporate Bitcoin adoption update. So, we've got um 800 uh total Bitcoin holdings 847,000 uh up 23% quarter-over-arter. Total value of the Bitcoin holdings by this is corporate adoption is 91 billion, up 61%. Number of public companies holding Bitcoin is at 125. Um, I'm curious maybe to if you look at the top holders

though, it's all of the Yeah, it's like Strategy and you know 21 and Riot and Metaplanet. It's the miners. It's the companies that we're talking about. When do you think we will see a you know I got to figure out a better way to put this, but like a real, you know, like a Fortune 500, like not just a Bitcoin company buying, you know, let's say a decent chunk of their treasury goes into Bitcoin. When do you think we see that? Um I I I look I I think that it's I think that it's like a next 12 month time frame. Um is is my view. And by the way, like the cash on the balance sheet of of the Mag 7, I'm tempted to like, you know, go on to Grock and and like look it up right now to give a more

precise figure, but it's like it like dwarfs uh, you know, it like the the amount of cash on these balance sheets is like orders of magnitude more than like the market cap of all crypto. So even a like, you know, I think it's a dangerous game to be like, oh, this is like really big number. So even like a really small allocation would be a big number. But I I think the reality is is like we've never been closer to getting like the largest um cash um but like these mag sevens are like the they they they hold more cash than any any uh any of companies in the world any endowments any foundation like these are the largest potential buyers for >> Bitcoin and like they're completely

sidelined. They're on zero. And so that I think is like um I think that that is the big unlock. And by the way, like when when metab buys, I do think like Microsoft and Nvidia and others like they have to give themselves the hard look in the boardroom and say like why are we at zero if our peers are starting to get off zero? And so that's when I think you know things things will get will get interesting. >> Hyper Bitcoinization potentially. >> Yeah. I mean I I yeah like I I don't know what you know I um I think these are pretty interesting times. Like I I also think that the other the other dynamic that has kind of been forgotten about by the way by the market is like people were

talking about it beginning of the the administration is like the national Bitcoin strategic reserve and like they obviously came out and said hey we'll figure out like budget neutral ways to acquire Bitcoin and then things just like went silent and the market was kind of disappointed by that. But um I wouldn't be surpris like I I I think that like there's the market's like not at all focused on on that and I I think they're I think that's the other potential like upside catalyst that could that could play out in the next year. >> Yeah. Yeah. Um Ben, Josh, this is great. any anything else that we're missing from these public vehicles that you guys think is important or just you know on LP calls questions you guys are getting that are maybe important to surface to light.

I mean the the only one from from my standpoint is uh for a lot of these uh they they do tend to provide kind of rich resources on everything going on related to their their balance sheet and um you know for for those curious or investors in these assets. I I would always push to do like the hard work on understanding what exactly is outstanding from a fully converted uh fully diluted share base and how how how many assets or how much in in Bitcoin or other assets they do have on their balance sheet. I think one thing we've learned uh having looked at like 60 70 plus processes is uh you truly have to drill down to to the numbers because a

lot of times people won't you know bring up like these outstanding warrants or these fees and so I just think being extremely diligent as more and more of these come to market is is critical uh to to picking everything up and making sure that you you fully are aware of the the kind of asset you're you're entering into. >> Yeah. Cool. Ben, Josh. Thank you guys.