Why public companies are buying Bitcoin: Semler Scientific and the MicroStrategy playbook

Transcript

this week we are seeing more public companies putting Bitcoin on their balance sheet into the treasury recently similar scientific an American public company purchased 581 Bitcoin worth $40 million representing over 60% of their treasury at the same time we've also seen this week meta Planet which is the hottest stock in Japan right now up 7x this week alone and a copycat of micro strategy building out their own way to bring Bitcoin to the hands of retailers what does this all mean what does it mean for private companies and what does it mean for you as a holder of Bitcoin do we expect to see more private

companies own Bitcoin in the near future what are the implications of Corporations holding Bitcoin what if Apple Google and other of the largest companies started to hold Bitcoin what would that mean and is the micro strategy Playbook something we're going to see happen in other jurisdictions around the world these are the questions that we are breaking down on today's episode gmgm welcome to milk Road radio the easiest path to get smarter about crypto I'm Jay Hamilton joined by Kyle reidhead we believe that onchain is the next online and we are here to help you capitalize on it Kai good to have you on the show let's start off with the news of the day which is SAR scientific what did they do well SAR scientific which

honestly I'd never heard of until this morning till this was announced but they are a healthcare tech company so they develop and manufacture and market products and services in the healthcare world I guess for chronic diseases so the last company I would have thought we'd be talking about in the crypto world but nonetheless today they announced that they have purchased I think 581 Bitcoin worth as you said about $40 million uh in Bitcoin for their treasury which is pretty interesting I read sort of their reasoning as to why they are doing this they have I think 60 or 70 Mill ion dollar so they're a good successful business they've got a bunch of cash just kind of sitting there generally corporations will put it into treasuries maybe they can earn five well right now anyway be about five

5.25% yield on that but otherwise if they're not putting it in that it's just sitting there and essentially being inflated away so I mean famously we've heard micro strategy Michael sailor specifically talk all about this how he didn't want his treasury to be melting like an ice cube and so instead let's put into an inflation hedge you could put it in Gold I guess but what scientific said in their report today was they see Bitcoin as a better version of gold and it is way undervalued versus gold and thus their I guess thesis is that well Bitcoin has no other option but to go up and so they want to get some exposure to that and they've made this purchase with their balance sheet it looks like they may continue to make this what they've said is it's their

primary Reserve asset so it's not just a onetime buy now it's as their company continues to generate more Revenue my guess anyway they haven't fully laid out their plan is they'll put a percentage of their revenues or their profit into Bitcoin on a could be monthly could be quarterly could be yearly basis similar to what we do over here at milk Road where we take a percent of our profits every single month we put it in Bitcoin but also in Ethan soul for those that are wondering and so same sort of strategy but from a public company listed in the US which is a pretty big deal I would say what was the impact for semler not only are they doing making great decisions in our mind with their Treasury but it also impacted their stock price what happened there so from the announcement I haven't looked in the

last little bit but they were up like 25% I think they even reached 30% on the day which is hilarious like you have a bunch of these degens now that are just buying some healthcare tech company out of nowhere they have no idea what it does but of course the price goes out this is what happen with micro strategy and honestly every company that does this will this hold will this remain like I don't know I wouldn't be buying this company here I don't think they're trying to do the whole Michael sailor strategy but I don't maybe who knows I can just imagine the smile on Michael sailor's face when he saw this news like he tweeted it up this morning too I he must just be so proud he's like a proud dad the Bitcoin Dad okay let's just take a look let's step back so we've got some

more scientific as you said a American pharmaceutical company that I'm sure most people have never heard of that put Bitcoin on their balance sheet what other public companies own Bitcoin we just we took a look according to bitcoint treasuries decom we found 40 public companies own 300,000 312,000 Bitcoin valued at about 21 billion representing 1.5% of the total Bitcoin Supply now micro strategy it represents 1% of that so the majority of that is micro strategy but there's approximately 55,000 public companies in the world and there's only 40 right now that are holding Bitcoin and to be fair I think

most of those companies are crypto native companies and also this is different from we just did in a we've talked a bunch about all the people or the banks really that are holding the Bitcoin ETFs this is different this is people that are actually holding Bitcoin on chain in their treasury which is different than like a bunch of banks or funds buying the the Bitcoin ETF I think most of these 40 public companies though are crypto native companies they're like Bitcoin Miners and others that are in the space but there are some others Tesla probably the most popular of them all that was in there I think you know coinbase obviously does it and then I think Marcado Libre which is not a crypto company obviously ecommer company yeah e-commerce company block or no not block well they do too but Square does block do but Square which is not a

crypto company which is Jack dory's like payments company they did this I'm just trying to think of the ones from last cycle because there was that moment where when Tesla did it all of a sudden a bunch of public companies did it and then we haven't really seen it since there hasn't been many companies at least announcing it or that we've seen in in any reports that they are holding Bitcoin until well just recently here today yeah the other one that stand out stood out to me was Riot which is a gaming company and they have almost 9,000 Bitcoins so you've got more you've got a wide breadth it's not just crypto native companies there are are others in that list as well what why are these companies holding Bitcoin and do you think others will follow suit here Kai I do think others will follow suit I mean

they're doing it because what else you going to do with your cash right it's sitting there you could go invest in other companies but that's quite hard it's like venture capital you need to hold a a big Wing you need to hire a bunch of people to do that you could just hold treasuries and that's you know 5 six% I think people are starting to realize hey you can hold this other asset that's Global that's permissionless and is helping and you know has a strong use case for many people around the world and it's a store of value it's competing with gold except it's so much easier to hold and so why not at this point right I think we're early in a bull cycle I think a lot of people are smart enough to realize that I would assume CFOs can sort of wrap

their heads around what crypto is regulation is beginning to get much better in the US which means that they at least can hold it now they weren't really sure A lot of them at the time but now that we have a Bitcoin ETF an ethereum ETF coming it's like hey it's pretty crazy not to be holding some of this stuff at this point you could hold gold but gold doesn't do a whole lot so like it's not that exciting and so I think especially if you're a tech company it's like why would you not put some percentage of your treasury into Bitcoin at this point m M MH So when you say that the milro research team today thought okay what if you're right what if a whole bunch of public tech companies and some of the largest

companies in the world start to hold Bitcoin and so we thought okay what would that look like we brought up an old tweet which we talked about months ago from Matt Hogan who is the CIO of bitwise who went on a CrossCountry tour met with a lot of professional investors and found that most professional investors were going to hold somewhere between 1 to 3% was their plan they weren't doing it yet because a lot of them couldn't do it because of Regulation but they were planning to hold one to three% of Bitcoin on their portfolio so we pulled up Apple Microsoft Amazon Google and meta total amount of the all of those companies in their cash or cash equivalents is 640

billion 1% of that is 6.4 billion representing almost 100 ,000 Bitcoin which is about half a percent of the total supply of Bitcoin Kai one 1% how does that sit with you I think 1% is bearish I mean it'd be amazing I think there's so much Capital that's just kind of wasted in dollars and you named some of the biggest I mean Apple has been known for a long time just holding so much US Dollars just sitting there at some point it will come I don't think it happens just yet but I remember last cycle when Tesla announced that they did it it was basically e or sorry Bitcoin had to to get to about 40K which was basically double its previous alltime high from the previous cycle

that was when the institution started to kind of fomo in you had Tesla you had Square Etc we're not there yet in this cycle and it's already starting happening which is actually super super bullish here I don't think this ends with just this one here with semler I think we are going to see a bunch over the next three six nine 12 months but it's going to take I don't know I guess with the ETFs it's on people's radar already generally this industry doesn't get on people's radar until we're like way past previous all-time highs we've just sort of scratched alltime highs with Bitcoin but with those ETFs I think we're starting to get in the Limelight a little bit and so maybe it happens sooner this time around but I think we're about to see a bunch of these companies do it and they wanted but

realistically we think that like big corporations are pros and they're going to be the best investors they're all going to buy the top two and so I think you know will Apple do it I'm not quite sure if Apple and Google and them will actually do this they'll probably buy companies in the crypto space more than put their Capital into something like Bitcoin that's my guess but there's no doubt a bunch of companies that hold US dollars or in other parts of the world as well that hold other Fiat currencies they will start buying Bitcoin maybe even eth at this point since we've had the ETF approved and I think I think you'll see a bunch I think this is just kind of the start starting point of it and I think it's going to be like every month and then every week and then it's

going to be pretty frequent now do I think this is like the hyperbitcoinization when just everyone buys it and they put 100% like no that's not going to happen the Bitcoin Maxis will tell you that I don't think that's the case I just think we're going to see a lot more than 40 companies holding Bitcoin on their balance sheet in the next 12 to 18 months and i' be willing to bet on that gradually and then suddenly exactly crypto will go up more than 100x in both users and value over the next decade if you're listening to this right now you're extremely early and have an incredible opportunity to capitalize at milk Road our mission is to make you smarter about crypto that's why we're doing today's podcast and why we send you a daily newsletter for free but if you're ready to level up as an

investor let me tell you about milk Ro Pro we crafted this resource for investors who are already smart enough about crypto and are looking for more actionable insights on how to invest successfully in one of the fastest growing Industries on Earth every week we break down the latest trends dive into tokenomics of popular and upand cominging tokens and get into the nitty-gritty of market analysis all to help you invest smarter plus we have a private Discord Community for pro members it's like your backstage pass to the milk road crew exclusive insights Hot Tips and live amas with our team now if you're looking to level up as an investor then click the link in the show notes below and sign up to Pro today don't let this bull market opportunity slip through your fingers Okay so we've got this public company Bitcoin treasury

strategy that is playing out that's been as you said it's been around for a while and we're seeing it pick up steam and similar scientific a random company is leading the way this week we'll see who leads the way next week super exciting going to continue to watch that at the same time we also have the micro strategy Playbook which is a little bit different also a public company but doing it in a different way and what we are seeing right now the big news this week is metaplan metaplan is a Japanese company that is essentially a copycat of micro strategy and they are the leading stock on the Japanese stock market this week they announced that they're going

to buy 250 million yen worth of BTC and they up 7x this week alone in the Japanese stock market Kai what's going on with this who is metap planet what's the micro strategy Playbook can you break that down for us yeah so it's an interesting story micro strategy was I mean this is Michael sailor was famous for back in 2020 in the summer there before anyone was talking about Bitcoin he put $600 million I think it was on his balance sheet which was insane at the time now it's fairly normal and you know he's obviously done really well with that bet but what he started to do was not just buy a little bit with his reserves but

then he actually started selling shares of his company basically taking out debt from his company and buying more Bitcoin with that so essentially leveraging but when you're a corporation especially in the US you can get very favorable rates on when you get debt so he basically pays zero percent interest rates on his debt and so he's kind of got this like unlimited money Loop where he can just keep taking money out of his company buying more Bitcoin with it the price of his shares goes up because he holds holds more Bitcoin and then he can take out more debt and he just never pays any interest on it it's actually a little bit insane and it's worked really well he's done it for years and like you said he owns what like 1% of the total Bitcoin Supply at this point yeah so interestingly then these ETFs came along

in the US recently this year and people are still buying it and his play is still working now why would that be right like a lot of people were buying micro strategy because you couldn't get exposure to bitcoin anywhere else other than buying it on chain which isn't the easiest thing to do and so the reason people kept buying it for micro and still are today is because one there's no fee right so when you buy an ETF you pay some sort of fee if you buy the grayscale one you're paying like two% which is ridiculous if you buy Black Rock it's like I don't know point 0 2% something like that so there's a fee that you have to pay every single year there is no fee when you buy micro strategy so there's one big thing the other thing is when you buy an ETF

you're buying one for one I put in a dollar I'm getting a dollar worth of bitcoin okay you can't put in a dollar but whatever the share cost with micro strategy it's a leverage play so there is more Bitcoin than what people are putting in and he can continue to put more Bitcoin in as he takes out as he gets more favorable debt Etc and so it's basically a leverage play where it should in a bull market go up more than what Bitcoin does right but in a bare Market it probably will go down more than what Bitcoin will so if you are very bullish in Bitcoin it's better to just buy micro strategy than it is to buy an ETF because it's less fees and it should go up more because it's basically like a high beta play on it so it's actually continues to work even with the

ETFs and now you have U metap planet doing the same thing over in Japan they've announced this week that they're buying 250 million yen I think worth of bitcoin I don't think that's that much Bitcoin but I I don't know I've never I don't know how much the yen is worth but so they're doing it as well appears to be working over in Japan and then my assumption is I don't know how many exchanges there are in the world but there's a hell of a lot and there's going to be people who want to access the same sort of style of investment into Bitcoin and so I've seen a tweet just this morning I think it was the founder of Bitcoin magazine or something where he was saying he's already talking with two other with companies from two other exchanges where they're looking to implement the exact same strategy so my

assumption is we're going to see this micro strategy Playbook happen in more than just Japan and the us maybe it happens in Canada maybe it's in Europe in the UK and then in Dubai and then in China and so on and so forth I would imagine we'll see this happen more often because it's great for the company and it's great for the investors too so why wouldn't you do it and you can't do it this way with an ETF so it's it's quite interesting so so what are you buying micro strategy the Bitcoin ETF or just good old Bitcoin none I'm buying and soul to be honest I think look I think I'm bullish Bitcoin I just I think at this point in the cycle Bitcoin dominance has topped and it's time for the rest of the market to to take charge

especially with this eth ETF happening I think Bitcoin had a great moment and it was super bullish and that was great but I just I think it still gets sense of adoption I think it does really well I'm not saying don't buy Bitcoin or it's going to do bad I just think there are better plays in this space at this stage in the bull market and I think that's probably eth I think that's soul and then a host of others and so I am I'm actually not buying any Bitcoin I've sold most of my Bitcoin and any Bitcoin ETFs that I've had I've sold it all and and I'm not really buying much here still covering it still keeping an eye on it because obviously it's still really important I just I don't think it outperforms anymore Kai thanks as always for joining us today shout out to Eric

semler the chairman of semler scientific for being on today's show and showing us leading the way for public companies to start buying more Bitcoin and The Meta planet for yeah copying Michael sailor way to go we got potential for more of these to come this is uh man just exciting exciting times in the space today's news in case you missed it Mount gaau has moved over 140 Bitcoin worth around $9 billion leading to a bit of a panic as everyone was worried that this would be dumped onto the markets now to quickly reassure the public Mark carpels stated

on X as far as I know everything is fine with Mount gaau the trustee is moving coins to a different wallet in preparation of the distri distribution that will likely happen this year there is no imminent sale of Bitcoins happening look if you've been around for a while this is not the first time that the mount goau funds have been moved to a new wallet they do this for security reasons no need to PR freak out everybody this is a bit of a nothing Burger but when Mount goau is going to distribute this Bitcoin back to their creditors we will be sure we are on top of it and let you know also in today's news Luca NE Nets the founder of pudgy Penguins has made a $100,000 bet what's the bet you ask he

has bet with jez jez on Twitter from a partner from standard crypto which is a VC firm the bet is that pudgy Penguins will reach a floor of 100,000 USD within the next year what do you think we'd like to hear from you do you think py Penguins will hit a floor of 100,000 USD within the next year my quick thoughts right now py Penguins is at a floor of about 10 E 10 e right now is worth about $440,000 so all that really needs to happen is eth price needs to go up 2 and a5x and boom we're there at the bet that that Luca has made here so yeah you do

your own math here finally the Unis swap Foundation has revealed that their Reserve assets and fund usage they have $41 million in Fiat and stable coins look this is very exciting because it's crucial for the Unis swap community and the broader cryptocurrency Market as it sheds light on the Financial Health and strategic direction of one of our leading decentralized exchanges now there is an upcoming vote on protocol fees which could significantly impact how rewards are distributed within the ecosystem which would affect both uni token holders and liquidity providers show up to Unis swap keep up the good

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