In this conversation, Stephan Livera and Matt Cole discuss the rapid growth and strategic developments of Strive, a Bitcoin treasury company, particularly following its merger with Semler Scientific. They explore the implications of this merger, the importance of institutional interest in Bitcoin, and the strategies for managing debt and generating yield. The discussion also touches on the competitive landscape of Bitcoin treasury companies, the role of digital credit, and the future outlook for Bitcoin in the context of increasing institutional adoption and market dynamics.
Takeaways:
🔸Strive has rapidly grown its Bitcoin holdings through strategic mergers.
🔸The merger with Semler positions Strive as a leading Bitcoin treasury company.
🔸Institutional investors are increasingly interested in Bitcoin treasury companies.
🔸Strive aims to generate a significant Bitcoin yield for its investors.
🔸Managing debt effectively is crucial for Strive’s future growth.
🔸The healthcare business from Semler will be monetized within a year.
🔸Acquisitions in the Bitcoin treasury space are strategic and not frequent.
🔸Understanding Bitcoin yield and amplification is key for investors.
🔸Digital credit is a growing area within Bitcoin treasury companies.
🔸The future of Bitcoin looks promising with increasing institutional adoption.
Timestamps:
(00:00) – Intro
(01:37) – Strive’s growth and developments
(05:54) – What do institutions look for when investing in a BTCTC?; Reverse stock split
(09:08) – How will Strive manage its debt?; Amplifying Bitcoin exposure
(13:22) – How will Semler Scientific be monetized?
(17:06) – Accelerating Bitcoin yield through SATA; Possible future M&A
(22:53) – Structuring a merger of a BTCTC
(26:30) – Valuing a BTCTC and mNAV considerations
(34:46) – Matt’s take on Danny Knowles’s interview with Michael Saylor
(39:54) – Should every BTCTC engage in financial engineering?
(44:18) – Differentiation in Bitcoin treasury companies
(48:40) – What is the difference between SATA and STRC?
(53:38) – Who is SATA for?
(57:49) – Which are the pools of capital that can’t directly buy Bitcoin?
(1:01:41) – Have BTCTC cannibalized the on-chain use of Bitcoin?
(1:04:34) – Outlook for Bitcoin in 2026
Links:
Stephan Livera links:
- Follow me on X: @stephanlivera
- Subscribe to the podcast
- Subscribe to Substack
Transcript:
Stephan Livera (00:00)
Hi everyone and welcome back to Stephan Livera podcast. Today we’re going to be talking about Strive and digital credit and Bitcoin treasury companies. Joining me today is Matt Cole. Matt is the CEO and chairman of Strive and you know, Matt and I have been chatting kind of whenever there’s a conference on we end up chatting and I’ve always found it really interesting and very intelligent commentary and yeah, excited to chat with you. So first off, welcome to the show, Matt.
Matt Cole (00:26)
Thanks, it’s been a long time. Thanks for having me, Stephan.
Stephan Livera (00:30)
So obviously the big news for you guys is you just, I believe the shareholders just approved this merger of Strive and Semla, creating a new large entity with, what is it, about 12,798 BTC that you have. Last I checked on the dashboard, it’s 14th of January, 2026. So give us a quick overview, what happened here and what’s the plan there?
Matt Cole (00:57)
so we’ve been public for about four months and in Bitcoin terms, it feels like we’ve been public for four years, right? And it’s easy to forget that. It’s like, where were we at as Strive four months ago? Where were we as Strive a year ago? It’s January 2026. January 2025. We hadn’t even found a company to reverse merge into to become public yet. We hadn’t found asset entities one year ago.
It was also about one year ago that I met Ben Workman. I met Jeff Walton, met all these guys, met Tim Cotsman. This has happened so quickly. I mean, those introductions happened in January. We found asset entities and a target in February last year. We announced that we’re doing a reverse merger with asset entities May of last year. So we’ll call it like nine months ago, we announced that we’re becoming a publicly traded Bitcoin treasury company.
About four months ago, we actually became public. One week after becoming public, we had an opportunity to announce an acquisition of Semler, who was the second US publicly traded Bitcoin treasury company. Then in November, so just a couple of months ago, we launched Seda. So we were the second US company to launch preferred equity after strategy, the first one that had no debt, which is a topic to discuss now because Semler does have debt, right? So we’ll get into that, I’m sure.
And we announced plans to retire that within 12 months and kind of talk about how we’re thinking about doing that as well. And it’s January of this year. So this has all happened extremely quickly. When we became public, we had less than 6,000 Bitcoin just four months ago. ⁓ Proforma, PostSemmler, which Semmler will close in a couple of days, will officially have over 12,000 Bitcoin. So more than doubling our Bitcoin stack in under four months.
Also, if you look at it, so, but the goal is not just to double our stack, right? This work, what are our goals? Our goals are actually to generate a Bitcoin yield, right? So that’s really how you have to look at these, how you have to look at similar acquisition is, did this actually generate a good Bitcoin yield for our investors, right? Because that’s what we’re trying to drive here. And then over the long run outperform Bitcoin, which
ASST has actually outperformed Bitcoin pretty healthily. You can see it on our dashboard since we announced at Strategy World the strategy. So we have a live tracker of the Bitcoin standard era. And you can see we’ve so far we’ve outperformed Bitcoin, but the goal is to outperform it over the long run, right? Not over any nine month period, but over any couple, know, multi year period, but then on a year to year basis generate Bitcoin yield. So how are we doing?
If you look at the fourth quarter of 2025, we ⁓ generated a double digit Bitcoin yield. And so this is after we bought our initial Bitcoin, ⁓ driven primarily by the launch of Seda. But if you compare this to the industry, the fourth quarter was a very challenging quarter. Bitcoin was down. ⁓ Most companies had flat to negative Bitcoin yields, a few eeked out small Bitcoin yields, and Strive had a double digit Bitcoin yield.
So we were among the leaders, if not the leader in driving Bitcoin yield amongst industry in Q4. Then you go Q1. Well, obviously, Q1, we’re two weeks into Q1. So it’s very early. ⁓ strategy, I think, has like a 0.1 Bitcoin yield. They’ve been stacking a ton of Bitcoin. mean, kudos to them for how much Bitcoin they’ve stacked. It’s been only mildly accretive in Bitcoin yield terms. Post Semmler, we announced yesterday that we anticipate
having a greater than 15 % Bitcoin yield in January of this year. So again, Strive is moving towards the top of the leaderboard in Bitcoin yield metrics since we’ve been public. So I’m just very proud of the success that the Strive team has driven. And it filters through in things that are lesser understood that, I think from a institutional story, and we’ll get into the institutional story of Strive.
Why you know we decided to do a reverse split which is really institutional plumbing in my view But happy to kind of go in depth on that but but what do institutions want to see? They want to see you know a healthy market cap So, you know, we now post semler will have over 12,000 Bitcoin well over a billion dollars of Bitcoin, you know currently trading at a slight premium so, you know, we’re a billion dollar company, right and
I know money is being debased all the time, but they call that a unicorn company, right? Like not a lot of companies become a billion dollar company. What do they also want to see? They want to see liquidity. So if you actually look at the liquidity of our stock and the liquidity of SADA, so we’ll focus on the stock for a moment, one of the challenges in the Bitcoin treasury space is a lot of the Bitcoin treasury companies have really bad liquidity.
⁓ And you know, think it’s still early right like they have Bitcoin they have time to figure it out They’re at different places in in their strategy. But if you look at basically people besides Strategy besides meta planet and you look at strive relative to peers I mean we’re like on certain metrics more liquid than like our ten closest peers combined. So it’s not like Number one number two number three. It’s like strive
divides drive by 10, and then you’re getting like the average of most of our peers. And so we have a lot of liquidity, which drives institutional interest. Why does that drive institutional interest? Because institutions don’t buy half a million shares, right? They’re buying 10 million, 50 million, 100 million chunks of shares, and they want to say, yeah, exactly. Yeah, and so when I was at CalPERS, and most people know this by now, but managing the $70 billion bond portfolio,
Stephan Livera (06:40)
Right. They want to be able to enter in size without moving the price or leave in size without moving the price. Right.
Matt Cole (06:53)
You needed liquidity. Like you couldn’t get a position that you couldn’t get out of. And that’s a problem that a lot of the peers have. We don’t have that problem. And then the last problem is just more of a plumbing problem. But a lot of, a lot of institutions also have minimum price thresholds. Some of them are $3. Some of them are $5. Some of them are $7. And these are minimums, right? So like, let’s say someone has a $7 minimum price threshold. If you, you know, are at $7 and 25 cents, they’re not going to invest in you. Or if you’re
Amplified Bitcoin you look at the vol of Bitcoin in your $10 a share They’re still gonna be pretty hesitant to invest in you because they’re worried that you might fall under that threshold and then they become a for seller right and so it’s it was the one thing that was missing for us to really open the doors to the institutions to Ultimately drive, know what we think will be a further leading Bitcoin yield It’s really just a plumbing plumbing problem for us. But I think it’s really you know, we’re just getting started
Obviously, like I said, four months into this, but it’s pretty amazing how much has been accomplished in a short period of time.
Stephan Livera (07:58)
Yeah, it’s really interesting to see how quickly everything has shifted, as you said, like this merger, arguably the first merger or acquisition between treasury companies. ⁓ Now, I think, I guess you were touching on the stock split aspect of it, because I guess as I’m understanding, you wanna be above a certain threshold, because again, part of the play here is to be accessible to these different pools of capital. You wanna…
Be open to them putting the money in obviously to attract the money in and I guess the other thing I was really keen to ask about is the debt aspect because I know you spoken about how that’s been a key differentiator for you with strive to say hey We’ve got Seda and we have no debt but now with the similar acquisition as I believe I was looking it up you tell me the exact number but I believe it’s in the it’s in the ballpark of 120 million and I believe just for listen, okay. Yeah, and I believe you’re
Matt Cole (08:46)
Exactly right.
Stephan Livera (08:51)
your market cap is, as we speak, about 952 million. You your Bitcoin stack is worth about 1.25 billion. And so that’s kind of, these are the numbers we’re looking at right now. So what’s the plan going forward on trying to get rid of that debt or what’s the plan there?
Matt Cole (09:09)
Yeah, so there’s several different options and all of them are on the table, but what do I think would be the best option and something that I think is executable, we hinted at this in our press release when we talked about how Strive might issue a lot more SATA in the near future, is we want to have amplified Bitcoin exposure. In the last…
presentation we had on on ASST and SATA update, we talked about having amplification of 25 % plus. We showed an amplification chart that really gets into one of the things that I think Adam Livingston explains really well, which is the compounding effect of amplification over time, right? Like interest and total returns compound, right? So if you outperform Bitcoin in one year by 10%, that’s great, but it’s kind of interesting, not really.
But if you’re doing something like that year after year after year or more, right, over the course of 10 years, it becomes extremely meaningful. we put in, you know, in a box what it would look like at 30 % amplification, 40 % amplification, 50 % amplification. Obviously, all those are greater than 25%. And, you know, these are very dynamic conversations of like where we might go in those sorts of range. But we want to provide great amplified Bitcoin exposure.
No debt. so we announced intentions to retire. So Semler has two forms of debt right now. They have a hundred million dollar convertible note, and then they have a 20 million dollar Coinbase loan that they took out when they had a settlement with the DOJ around their operating business. OK, so so we have call it, you know, almost one point two billion dollars a Bitcoin. About 10 percent of that, you Semler has some debt that we got to take out. So the easiest and I think cleanest way. And this is going to be dependent on market conditions.
⁓ Would be to issue more SATA to pay that debt off, right? Then you have kept your amplification ratio up because if you just retired the debt Let’s just say you had cash to retire it or you sold a little bit of Bitcoin to retire it Then the initial SATA that we raised the 200 million dollar notional as a percentage of the overall Bitcoin stack is less amplification Right, which we want more amplification And so if we want more amplification then a use of proceeds for a SATA raise would be to retire that debt
I think you know these things are dynamic conversations. They depend on market conditions and many factors, but I think that would be the cleanest way But if we had to do it different ways, you know, you have we have a 1.2 billion dollar balance sheet We have a premium to our Bitcoin nav currently That you know post the transaction that we could consider, you know using to pay it off But like but I think these are these are dynamic conversations. Where do we want to go? How we do it there’s certain ways that are
better than others, but where we want to go is amplification greater than 25 % and no debt, and then ultimately also monetize the similar business within 12 months. So just a clean story. And that challenge or that operational work that we have to do, that is the cost of generating a 15 % Bitcoin yield. Nothing comes free. The question is, is that 15 % Bitcoin yield when
Stephan Livera (12:22)
Of course, yeah.
Matt Cole (12:26)
Basically, no one has any yield strategy as 0.1%. Is that difference worth that effort? What I just talked about, do we think executable? And the answer that we believe is absolutely yes. So now that’s what we’ll be focused on in the near term.
Stephan Livera (12:42)
Yeah, and when you say monetize, do you mean they’re like actually sell off like you may sell off or spin off the similar medical business, but obviously keeping, ⁓ you know, Joe and Eric on board.
Matt Cole (12:55)
Yes. Yeah. So, ⁓ so Joe will be part of our Bitcoin operations. ⁓ so he’ll be, you know, working primarily with myself, Ben Workman, Jeff Walton, ⁓ doing a lot of the things that Joe, Joe has, ⁓ know, you, and you can never have enough podcasters per share. you know, we brought, we brought Joe in, he’s, he’s, he’s a great, great ad to our team, right? So he’ll be part of the full-time, ⁓ strive team. ⁓ and then Eric Settlers joining the board.
He’ll be an independent board member. So he was the chairman of Semler. He’ll be an independent board member for Strive. And that’s another one of the plumbing things as we grow, is you need more independent board members. And so he slots in as a great independent board member, someone that was a visionary, obviously launching the second US publicly traded Bitcoin treasury company, obviously a massive supporter of Bitcoin. And then when it comes to the Semler operating business, so what are the plans there?
⁓ Here’s what I can tell you at this point. So we’ve given a high level overview of a bigger vision. So this is not the day jobs or the focal point of myself or Workman or Walton. That’s going to be on the Bitcoin side of the equation. But having a small team of people around strive focused on giving that healthcare business a broader mandate. So what does that healthcare business even do? It’s around preventative healthcare. So it’s about can you find
you know, a problem for them with their heart early, early detection, right? and, and a lot of people in our generation are really about preventative healthcare. ⁓ they’re not about, it’s like the whole Maha movement, right? That you don’t wait till you get sick. You don’t wait till you get cancer and then go to the doctor and treat the cancer. It’s much better to prevent having those bad health outcomes by being healthy and taking preventative steps to your healthcare. So we think that that’s a, that’s a business movement into the future that has a lot of momentum behind it.
preventative healthcare. And that will only continue in the age of AI. It’ll only get better in the age of AI. And so the similar product’s actually a good product. So the question is, can we leverage our co-founder Vivek Ramaswamy, who has a background in biotech and healthcare, one of our board members, Ovik Roy, maybe bring in another person or two and kind of create a small team that’s focused on actually giving that business a broader mandate. So, you know, not shutting it down.
right, but giving it a broader mandate. So they have one product. So what if it was a holding company of a bunch of different products or something like that? And then that spins off and is its own thing. ⁓ And ultimately is not part of Strive, but how it ultimately is monetized, you know, is TBD. Could, is it possible that Strive has a minority stake in that, depending on, you know, how, you know, these are negotiated? Possibly. Is it possible that it’s a complete spin out? Yes. ⁓ These are things that are unknown.
But that’s the direction it’s going. That is that it won’t stay understribe over the long run. We don’t think it’s core to our mission as a Bitcoin treasury company. And we want to stay focused on that to the maximal degree. But we also have a fiduciary duty to our shareholders to not take an asset and just completely discard it. Like we have to maximize value with that asset. And this is how we think we maximize value with the asset.
We put a 12 month window on it, because we don’t want this to be something that’s lingering forever, right? So we message, we’ll do this within 12 months, where the intentions are. And then ultimately, you know, we’re focused on what everybody knows we’re focused on.
Stephan Livera (16:22)
on the Bitcoin
side of things. Yeah. Now, as you were saying around the Bitcoin yield conversation, obviously, that’s an important factor for any Bitcoin treasure company. Is it fair to say this would be kind of like doing an acquisition like this is sort of like a lumpy move that you can’t necessarily do that you’re not necessarily going to do that every quarter, right? Like, it’s kind of like, this is maybe, I guess, way I’m understanding it, and you tell me that I’m understanding it like you, the idea is that you’ve got this
engine churning, you’ve got SATA, SATA, the preferred share to kind of keep, you know, providing, you know, that is like a product out there that you can kind of regularly get some yield out of that. And occasionally, you’re going to get these M &A opportunities, that’s like a lumpy kind of chunk that you’re going to get. And then that’s, you know, that’s, I guess, one way to conceptualize what you’re doing, or how would you react to that? Or is that accurate? Or how would you change? How would you say that?
Matt Cole (17:16)
Yes, I think I think at this point for strive having Seda already out there now having north of a billion dollars of Bitcoin over 12,000 Bitcoin We don’t have to do another acquisition ever We have the engine churning to generate what we think will be a leading Bitcoin yield With the volumes and the market cap like like we think we’re we’re big enough If there’s a win-win Of course, we’re open to additional &A opportunities, but but to your point
How do you think about them? So you think about when we announced Semler to when it closed, it was about a four month period, right? The average &A transaction takes about six months. And so realistically, like you’re talking about on a given year that you might have one, like if you, if it was an insane year, maybe two acquisitions. And I mean, just, for reference, I mean, we did a reverse merger into asset entities in 2025 and then in 20, which is, which is a merger, right?
And then in January, 2026, we took over another company. you know, within 12 months, we have done two acquisitions of two companies, right? So that is possible. But, you know, when you’re in the midst of a transaction, you can’t even have the next conversations with the next companies. like, it’s, you know, at this point, Semmler will close in the near future. And then we could consider like, is there win-wins? We’re definitely open to it. I mean, you look at some of the
the peers in the space that don’t have great volumes that are trading at discounts to Nav and that probably don’t have enough Bitcoin to actually issue digital credit because we’ve talked about this before publicly, but when we launched Seda, so we did $200 million notional, we started with an IPO size of 125. And one of the interesting learnings from that is we thought 125 was kind of like the minimum size to actually do an IPO, but our order book was actually
kind of weak at 125 and it was two times oversubscribed at 200 million. And even at 200 million, many of the institutions said it’s too small for us and so they ended up passing. And so what I believe is that for most, unless condition, liquidity conditions are just so loose, that 200 million’s probably about the minimum size.
And so you take a $200 million notional raise, you for most people that issued their first digital credit, it’s going to be at a discount strategies. First one was priced at 80. Our first one was priced at 80. So, so you, so you look at that and you say, okay, like how many people down the list? And then you also say like, when, you issue your first one, people are going to want, you know, not to have you push beyond certain amplification ratios. like probably 25 % is probably the max that you can go at the start there.
And so you say, so you start to go down that list and you’re like, okay, actually like when strive did that, we were kind of like the minimum size to do that. And it was like, you know, whatever 5,700 Bitcoin or something like that. So you’re like, who has that? There’s not a lot of players that have that.
Stephan Livera (20:13)
There’s not that many
potential people who can do it, right?
Matt Cole (20:16)
Yeah, and then you look on that list also and you say, okay, well some of them they did SPACs which a SPAC when they IPO they have to wait 12 months to have a shelf registration. So they can’t do a public preferred equity until 12 months after their IPO. And so then you start to narrow that list more and more and some of them obviously have other debt terms already. And so it’s almost, there’s very few players outside of Strive, Strategy and MetaPlanet that can actually issue digital credit. Do I think we’ll see a couple? Yeah, but it’s not like
all of them are going to issue a preferred equity publicly traded this year. I don’t think that’s possible. And so for some of them that are believers in digital credit, could it make sense to team up with Strive and kind of press the go button together? It’s possible. Will it happen? think it remains to be seen. think these things have to be win-wins, right? It has to be a win for their shareholders. It has to be a win for Strive. And we’re definitely open to it. But I would say I wouldn’t.
Forecast at this point that that it’ll happen, but I would say like if you were to see consolidation in the space I do think that strive is the leading candidate for further consolidation you look at strategy. It’s not Material for them. I mean they they buy 10,000 Bitcoin Yeah, so I think I think strategy could be in a very very rare instance But I think it’s pretty unlikely especially in the next couple years that they would do it
Stephan Livera (21:31)
Right. And Michael’s mentioned they’re not interested in that as well.
Matt Cole (21:44)
⁓ MetaPlanet is a Japanese company, for a Japanese company to acquire American companies, that has its whole host of additional complexities. Then you start going down the list and you just say, it’s probably, Strive is the most likely continue to consolidate or in the space to the extent that continued consolidation happens. But we’ll see. We’ll see. that’s the high level of it. ⁓
Stephan Livera (22:07)
Yeah.
Yeah. One other topic on the acquisition
I think would be interesting is, as you mentioned, making it win-win. I think people will want to understand, okay, well, what’s the price you’re paying and ⁓ how are you funding it? Because as I understand, this was an all equity deal. ⁓ So can you maybe articulate a little bit on how you get both shareholders on-site, both sets of shareholders on-site there to feel like, hey, we’re getting a deal here. We’re getting a decent offer here.
such that they will then approve. Now in your case they did approve it, but if you could just explain a bit there on the structuring of the deal and the pricing and how is it paid for.
Matt Cole (22:47)
Yeah, so I think all stock is the cleanest way to do this. ⁓ 100 % is the cleanest way to do it. We’re on the Bitcoin standard. We don’t want to be using cash for acquisitions. So it probably would have to be all stock, majority all stock. For Strive, I think the question when you come to Win-Win is what is the value proposition that each side is bringing? So Strive brings size, we bring digital credit, we bring liquidity.
And we bring, you know, you know, but typically one of the leading MNAVs in the space is how we’ve, we’ve typically traded since we’ve, we’ve IPed one of the higher MNAVs. And so those are the things that, that we bring. ⁓ And then everybody else, it’s a case by case basis, right? Some people have more than just Bitcoin. Some people don’t. Some people have bad liabilities, right? So, so for, for it to likely work out, it probably would have to be an accretive yield.
deal for strive or the Bitcoin accretion is there. But if there’s a difference in, in M navs and ability to drive amplification ratio, you can easily start to do the math and say, okay, for one of the other companies, you look at it on a three or five year basis with the amplification that strive can bring the clean balance sheet, the liquidity. you say, is this better, especially if you’re trading at like a, you know, at 0.85 or 0.8 or 0.7 M nav to say,
Stephan Livera (24:08)
Right, discount to 1X,
yeah.
Matt Cole (24:10)
Can Strive meet you in the middle somewhere, give you an increase, and then also provide amplification that you’re unable to get yourself? The answer is yes, but different investors will have different views on their side if that’s a creative. On our side, Strive is a controlled company. We have a group. Myself, our co-founder Vivek Ramaswamy, our CFO Ben Pham, our Chief Legal Officer Logan Byrne.
We have a group together and that group controls greater than 50 % of the voting power. And so we can move very quickly. So that’s why you didn’t see us have to hold a shareholder meeting. Like when we announced the deal, Strived had already approved it with Semmler. It was fast. And so that’s one of the other things that we can bring where Semmler had to go to their shareholders and look, the shareholders were very rational. Over 90 % voted in favor of it. ISS and Glass Lewis, the two proxy advisors, they both recommended in favor of it.
Um, and so it had vast support, right? Like, I mean, that’s, that’s, that’s great support to get over 90 % for a transaction. And I think some people on X didn’t fully understand, like, would it have support? Would it not have support? But, institutional investors and proxy advisors, they, they’re, they’re able to do their work. They’re able to see these things that I’m talking about, this institutional story that strive brings that others are struggling. And, and I think the fact that they were in favor of it and it got to support it does, does show a path for this to be done in the future.
Stephan Livera (25:39)
Gotcha. ⁓ Now, another interesting one is this whole now this has been a big kind of bone of contention amongst let’s say Bitcoin people online about like MNAVs and so on. you know, maybe we’re kind of getting into a bit of like what happened with Michael Saylor and Danny Knowles a little bit, but even amongst let’s say the Bitcoin people who are bearish on treasury companies.
Some of them are saying, well, hey, what if some of these companies, their MNAV goes down below one and then they can’t get it back up above and they don’t have an engine to keep going on these. I’m curious, how are you seeing this? Is it sort of a cyclical thing? Is it also like, know, Bitcoin, like Bitcoin bear and bull markets obviously will matter. Can you explain a little bit of your thoughts on like how people should…
like consider this MNav question because it seems a very confusing thing because look, to be fair, a lot of this is very early and people sort of need to see it play out a little bit but how would you explain it for somebody when one of these companies is at a discount to MNav?
Matt Cole (26:44)
Yeah, so I think it’s really a case by case basis. So should any company that buys Bitcoin trade at a premium to their Bitcoin holdings? I think the answer to that’s no. It’s like, does any company that has cash, should they trade at a premium to their cash or if they had gold or whatever, right? Like the answer is no. ⁓ The question becomes, what is the company doing? And I think one of the things that…
sometimes could be confusing to people, but it’s actually pretty simple is like, ultimately, what are you trying to do? You’re trying to drive a total return and a total return that’s greater than Bitcoin. And so the question becomes, is the company doing something that is likely by the market standard to drive a better total return than Bitcoin over time and also doing something that an individual couldn’t do on their self on their own or a hedge fund couldn’t do on their own.
And if the answer to those things is yes, then I think it’s worth more than the Bitcoin. If the answer to those things is no, or maybe, like maybe it’s maybe maybe it’s worth around the value of the Bitcoin. If the answer is no, it’s probably worth less. And so I think the question then comes down to math. And what is your probabilistic outcome into the future of Bitcoin? And this is where I think a lot of the OG Bitcoiners that are massive Bitcoin bulls, their argument really breaks down.
for specifically issuers of digital credit like Strategy and Strive. Because if you have amplification through digital credit, you have not encumbered your Bitcoin, and you have a cash reserve set aside to cover interest payments, then you cannot be liquidated. And I think that that is misunderstood. Sometimes you see people, well, I can go on Coinbase or I can go on my account and I can put leverage on, and I can post margin and I can put leverage on. And it says, okay.
What happens if Bitcoin has a flash crash overnight or for a day or for a week or for a month? You’re liquidated. You’ve lost your stack. Right. What happens for Stripe? mean, literally, this is like a crazy scenario, like Bitcoin could go to a penny. And Adam Back would buy all the Bitcoin, I think. But let’s just pretend that he didn’t have that bid in there. And it went to a penny and it sat there for a year. Stripe could do nothing.
We could wait in that like crazy tell scenario. Let’s say it went beyond a year. We could then pause interest payments. We could wait for multiple years for it to recover. So the question becomes if you believe Bitcoin is going to go up at really it’s about greater than a 10 % CAGR into the future. The math will show that if you have amplification on through preferred equity for a strive and strategy, it just mathematically will outperform Bitcoin over time. And so, and so the question becomes
How much better is the amplification through preferred equity than traditional leverage? I think when you talk about a hyper volatile asset like Bitcoin, it is so valuable that leverage outside of the ability to not be liquidated is almost, it’s almost just a bad idea in all instance. And so I think if you want leverage, think amplified Bitcoin through preface is like by it’s by an order of magnitude, the way to go.
And so if you believe that and I believe that and you also believe Bitcoin is going to have a CAGR over the next 10 years north of 10%, we can all debate where we think it is. I think it’s probably around 25, 30%, but whatever, do your own math. ⁓ Sometimes I feel like I’m too bearish when I say that, ⁓ but ⁓ do your own math and it just mathematically outperforms in a way that’s not replicated elsewhere. And that there’s also very few players that are doing it. So like if you want…
amplification around 30%. Strive is the best game in town. Strategy is actually under levered. That’s kind of their problem in a sense is that they’re so big. Their problem is not that they’re going to go out of business. I’m like the ultimate strategy bull, but the hardest thing that they have is that they have over 600,000 Bitcoin and they have to amplify that to preferred equity. So a sailor has to go out there and sell more and more and more preferred equity and grow that market. that’s, I think, digital credit for people that want incomes like
an amazing product and I think he’ll be able to do it, but that’s a multi-year project. Right. So in multi-years, once he’s done that, what’s the price of Bitcoin? Well, Stripe already has that amplification on, right? So, so really again, we’re talking about total return differential into the future, right? Like who’s going to be able to drive the best total return. Then how does that filter back into an MNAV? Like the reality is I think the MNAV should be substantially greater than one, but let’s just say it’s one. Like, let’s just play that out.
If you already have digital credit on, you already have the amplification on, then you’re just going to outperform Bitcoin, even if it stays at a 1MNAV, because your NAV will rise faster than Bitcoin because you have amplification on as it goes up. So does it break? It doesn’t break. You would still outperform. And so I think it just ultimately comes down to the market kind of figuring out how to best value these companies in a space that’s moving exponentially. It’s easy to forget that strategy launched their first prep.
less than a year ago, we talked about our timeline, right? How fast all these things are moving and MNAVs are all over the place as people are trying to figure out, you know, what the proper MNAV is. I would say at this point, players like Striving Strategy can be agnostic on it, but also I think that the MNAVs are probably lower right now than they should be.
Stephan Livera (32:21)
Yeah, I think it’s a good summary because I think I probably, I agree with you on most of that, that really it’s, do you believe some Bitcoin treasure companies can justify a premium? I believe the answer is yes, it depends on the conditions, but yes, it can, you know, they can justify a premium based on some of these things like their leverage or amplification. And so,
I guess, and it’s a really interesting point you make about, let’s say in the academic case, like let’s kind of assume away some of the risk factors, obviously, not your keys, not your coins, understand that holding Bitcoin is a different thing to holding equity, but assuming even just one XM now, just the pure factor of having leverage or in this case, sorry, I should use the term amplification in this case, you already, you are outperforming Bitcoin just at least on the…
Financial, you know ngu side of things. ⁓ of course, you know, I want to be clear everyone, you know shouldn’t take that as like Stephan is endorsing only holding, you know Equity of a treasury company instead of holding bitcoin. Of course. I think you should hold bitcoin I see it as you know, yeah, right
Matt Cole (33:25)
So do I, so do I, just for the record.
Stephan Livera (33:27)
Yeah, because I think people get people get confused into thinking it’s like an all or nothing thing. Whereas the way I’m at least understanding it and again, no financial advice is just educational. The way I think about it is I keep you know, most of my, you know, Bitcoin cold storage multi SIG and you know, treasury companies are like a dabbling that you know, it’s a small fraction is how at least how I think of it. So I’m not saying yeah, guys, just go all in on treasury companies. No, that’s not how I that’s at least that’s not how I see it. But I think it’s a common
depending on who your audience is in Bitcoin, it’s sort of like there’s all this kind of purity testing and kind of virtue signaling. And maybe some of that is, you know, probably a natural spot. Actually, I’d love to get your reaction on the ⁓ Michael Saylor and Danny Knolls conversation recently, where I think, ⁓ you know, essentially, Danny was trying to ask this question of like, how does it change if you prefer now, you you strategy have put out preferred shares? What does that mean for the other guys? And how many treasury companies can there be?
What’s your take on this?
Matt Cole (34:28)
Yeah, my take is every company should own Bitcoin just like every individual should own Bitcoin Every nation state should own Bitcoin and I think that sometimes you some of the Bitcoin purists don’t like that they don’t like the idea of Companies holding Bitcoin or nation states holding Bitcoin My response to that is that I think bitcoins the most most valuable asset known to man It’s a decentralized asset and if you’ve created something that is truly scarce truly valuable in a world of abundance
Everybody’s gonna want it. There’s going to be a race for it. And and if that and if it’s not truly valuable Then no one will want it or only Libertarians will own it and I’ll say like I’m you know used to be a card-carrying libertarian I have very libertarian ideals, but like if only libertarians want your thing It’s not very valuable right like and but if it’s super valuable then everybody wants it and and you can’t control that right and I think that’s what Bitcoin is showing is that? Nation states want it
companies want it and growing companies grow more and more companies, more and more nations and people want it. And so, you know, I think from the perspective of how many companies should be have a Bitcoin treasury, everyone, just like how I would say to all my friends, you should own Bitcoin. And I think that’s where it gets into the, you know, are we competing with each other question, which, you know, say I got very, very contentious, right. And I probably have a little bit different of a nuanced take on that, where I’m extremely competitive.
And if I go golfing with my friends, I want to beat them. If I go workout with my friends, I want to lift more weight than them. I think what’s true is that in the Bitcoin treasury space, there’s a lot of friendly competition. I think it is competition. We are trying to drive a better total return than every other competitor in the space. We’re not trying to get more Bitcoin than strategy. That’s a silly ⁓ proposition. Never going to happen. I guess there’s probably some like 0.001 % chance that it happens, but like it’s not going to happen, right?
under any reasonable view of the world. But do I think that we can drive better total returns? Yes. And do we want to? Yes. ⁓ Do I also like, like we passed or we’re going to pass this week on the Bitcoin rankings, Tesla, DJT and block. you know, Jack Dorsey, Elon Musk and Donald Trump’s companies. How would I feel if tomorrow I wake up and Elon doubled his Bitcoin stack and Tesla? I’d actually be happy. So like, but then I would want to repass him.
Right? Like ⁓ it’s a competition, but we’re not competing in the sense that we can all win because of how nascent and how new this industry is, right? As Bitcoin treasury companies. So it’s kind of like pure play issuers of digital credit. Is there a competition? Yes. Can we all win together? Yes. Do you win more? Do you win more by actually working as an industry, educating others? Like, I don’t want to see in any way, sense of the form, even beyond the fact that
I’m friends with a lot of the C-suite of strategy. Just as a business, I don’t want to see strategy not succeed. And they don’t want to see us not succeed because if SADA blew up, that’s bad for them as an issuer of digital credit that the only other US issuer of digital credit blows up. They don’t want to see that. So that’s in the sense how it’s not competing. Is Michael Saylor competitive? Yeah, that guy’s a shark. That guy is an absolute shark. He’s a crusher. ⁓ So I think it’s important to say like, ⁓
how and where is it competitive? And I would say it’s friendly competition. Just like how like, imagine you’re in the NBA. If you’re an NBA player, do you want the NBA to be the place of all the best basketball players in the world? If you’re a player, if you’re a team, you do. You want the competition level to be extremely high because that’s going to drive viewership. That’s going to drive interest, right? But do you also want to win? Yes. Right. Like, and I think that’s kind of the way, the way I see this in the space and why, you know,
We go to the Bitcoin for corporations events, you know, you Sailor’s super generous with his time. I try to be generous with my time when I can help others succeed and why I actually want to see them succeed, right? It’s like, it’s like, yes, it’s competitive and yes, I want you to succeed. And yes, I think it’s a good thing for the Bitcoin industry to have more Bitcoin treasury companies. And the last thing I’ll say about this is that we can’t, one Bitcoin treasury company can’t do any everything. And I could think of at least
10 distinct unique opportunities for different pure play Bitcoin treasury companies. And then broader than that, I think every company should have Bitcoin on their balance sheet.
Stephan Livera (38:57)
Gotcha. And so I think part of the contention, let’s say amongst like some of the Bitcoiners who are against treasure companies. Now, again, I’m obviously more in the pro-treasure company side, but I think what I seem to see is people who are saying, well, you should be doing it. You should be stacking Bitcoin out of your operational company income, not out of quote unquote financial engineering. Because they see that as like,
you’re just trying to spin up some zombie company and get rich out of that, you should do it the hard way. you know, I’m curious, like, okay, yes, every company should hold Bitcoin. But the question then would be, should every company engage in financial engineering? How do you see that?
Matt Cole (39:41)
I partially agree with the statement. So I think the question comes back to first principle. So what is the goal of a company? The goal of a company should be to maximize the total return to investors. Okay. So, so that’s the problem, right? Like you’re saying, okay, how do I maximize total return? Should I focus on an operating on like the operations of a business? Should I focus on structured finance, which I think is what digital credit issuers are doing. I do think that those are operating companies with products.
Should I just stack Bitcoin? The answer could be different for everyone. Would there be enough space for every single company in the world to just drop their operating products and become structured finance Bitcoin treasury companies? The answer is no. Do I think that there could be more than there is today? Yes. And I could actually create more than there is today. And there could be very unique risk return profiles that are very different than strive or strategy. And so the question becomes, okay, like
Do I think that are we just trying to get rich? Well, yes, we’re trying to maximize total return. Like 100%, we’re all trying to get rich. Like whether you’re doing an operating company or a company, like the fiduciary duty you have is to maximize value over the long run. So the answer to that is yes. Are you doing it efficiently? Yes. And I think sometimes maybe some of the frustration could even be in the fact that
Structured finance companies of Bitcoin that are letting the capital do the work like it almost can seem like a cheat code like why aren’t you you know bust It’s an unfair advantage and I would say like in a certain sense. Yes It is like if you’re bullish on Bitcoin like like company people that are building Bitcoin companies that generate value to Bitcoin That value accrues to our amplification Like they’re effectively working for our company
Stephan Livera (41:15)
Right. It feels like an unfair advantage. Yeah.
Matt Cole (41:35)
And we want to see them win, even the ones that don’t like pure play treasury companies or don’t like what we’re doing. I want to see them win because if they win, Bitcoin’s likely more valuable. so I can see why there could be frustration. It’s like, I had to hire 100 people and we had to do this and do this and you guys launch a preferred equity, you have amplification and you’ve outperformed me. And now your company is worth a billion dollars. That’s frustrating. And I get the frustration behind that.
But companies are competitive with each other and we want to drive maximum total return. And I think that there will be varying degrees of how you best do that for every company that has different amounts of Bitcoin, different ability to raise money, different operations. There’s no one size fits all. Every company shouldn’t be a copy paste of strategy. And I think sometimes that’s what we saw maybe in Bitcoin Treasury mania 1.0 is certain companies that didn’t actually have a distinct vision. They just saw
strategy get rich, they tried to launch their own thing, where we have always approached it from how do we maximize total return? Can we do something different? Do we think it’s interesting? Yes. But it’s also flexible. When we first announced that we were going to become a Bitcoin treasury company, we talked about all these alpha opportunities and they’re still there. Digital credit was something that was emerging. We didn’t realize that we were going to be in the perfect position to be a leader in digital credit.
that the fact that we didn’t take convertible notes would put us in as big of an advantageous position versus a lot of our peers. I frankly, when we didn’t take convertible notes, we thought the market wasn’t gonna like it, but it was just the right decision for us. So we just was like, okay, it’s the right decision. And it ended up being something that put us in a bigger position to be a leader in digital credit than we expected, right? So the point is, like, just make good decisions, keep your head down, maximize total return. The answer will be different for everyone. But I do think the answer will for…
every company that’s looking should involve Bitcoin in some manner.
Stephan Livera (43:33)
Yeah, I think that’s fair. I want to also, I guess, bring up this idea that I think maybe what people are getting into their minds is, well, hey, you’re just all selling the same thing. But let me just, you know, I was just having a quick research and looking around. If I look at how many banks are there on Earth, that number, depending on where you count, it’s maybe like 9000.
Matt Cole (43:48)
Thank
Stephan Livera (43:52)
There are 9,000 banks on earth. Are they offering the same product? Well, they’ve got different loans. They’re offering different products. Or even if I took another example, how many companies do some kind of cola style soft drink? Obviously Coca-Cola and Pepsi are the dominant global players, but there’s like hundreds of them. So clearly there’s room for many different flavors, whether it’s some kind of banking.
play some kind of insurance play maybe there’s thousands of insurers around the world right so do you think that’s a fair analogy to make that okay if and if so what are some of the ways these different let’s say treasury companies who are focused on structured finance or quote-unquote financial engineering what are some of the ways that they can distinguish themselves from each other what are some of the ways that they will differentiate
Matt Cole (44:41)
Yeah, so I’ll give you a couple of different matrices that they could go in different directions. So I do think that’s a very fair analogy of looking at whether it’s the banking industry, the insurance industry, the asset management industry, that these financial companies, there’s hundreds of them in any sector. I would say banking is probably almost the one where sometimes they might look the most similar. Like, what’s the difference between bank A versus bank B?
And the answer tends to come into how they write loans, where they focus, how they look at risk versus return, and they generate different total returns. With regards to structured finance, Bitcoin, treasury companies, here’s a couple different places where you can differentiate. They’re easy. One would be amplification ratio. Different investors have different risk return matrices, different appetites for risk. So if you look at amplification, some might prefer 10%.
Some might prefer 20, some might be 30, 40, 50. And then, so that’s just one way of just outright amplification ratio. Another would be, how do you think about generating income? Do you generate income on your Bitcoin? Do you sell covered calls? Like, I personally am not a fan of covered call selling. And the reason is, is I think that Bitcoin has massive positive convexity to the upside. And that covered call selling is likely to clip that upside.
and we want to provide amplified Bitcoin exposure. But I’m well aware that covered call selling as an investment strategy is extremely popular. And with Bitcoin, it can generate really nice income. And so do I think someone providing some amplification with the covered call selling strategy would have interest? I absolutely do. Do I think we would have a better return than them? Total return? I do. But I think that it would be something that would have interest.
How do you think about generating a yield on your Bitcoin if you’re thinking about generating a yield on your Bitcoin? There’s many different ways that you could. You could look at things in the lending space. You could look at things in the banking space. You could look at things in the insurance space. There’s infinite ways you could option space. There’s many ways you could think about generating a yield on your Bitcoin. They’re all very different. And so just on those metrics alone,
I think you’re already talking about more differentiation than most people will be able to spell out around most banks in the banking industry. And so I think it’s very early and I think there’s a lot of room for innovation. ⁓ a lot of these Bitcoin treasury companies, the newer ones that I don’t think have laid out their plans yet, I’m sure they’re not sitting there doing nothing. They’re strategizing and it’s going to be very interesting to see what they come up with over
the course of the next year. like I said, in a competition in this space, I want to see them succeed. And I want to see us eat their lunches with a better total return.
Stephan Livera (47:41)
Right and to be fair as well, there’s even the jurisdictional aspect of like, know Bitcoin treasuring companies in the USA are different to treasuring companies in Japan or in the UK or Brazil or wherever. So that’s also another differentiator ⁓ that’s out there. ⁓ So let’s talk a little bit about ⁓ the growing interest in things like SATA and stretch. So do you mind just kind of comparing them for listeners?
and commenting a little bit on the growth that we’re seeing here, the interest in this.
Matt Cole (48:16)
Yeah, so first off, the growth is absolutely massive. So if you look at stretch, I mean, it’s trading massive volumes, it’s north of par, but comparing, and then if you look at SATA, it also has massive volumes if you compare it on a per capita basis, so just like the size of SATA versus the trading volume, you’d actually see that SATA has,
Stephan Livera (48:37)
Right, like pound for pound, yeah.
Matt Cole (48:41)
Superior liquidity relative to its size than stretch but on an outright basis stretch has obviously has massive volumes because it’s massively larger But here’s some of the differences. So SATA Has a slightly higher interest rate than stretch. We have a 12.25 % Interest rate so higher higher than stretch. They’re both variable rate So the company’s so strive and strategy will address adjust interest rate up or down depending on on the range
And then the trading range that the companies have set for the two products are a little different. So strategy, they set a trading range that they’re trying to drive to over time of 99 to 101 with a target of a hundred. So a two point range. And right now it’s within that range several times throughout its history, it’s been outside that range. And I think this is so early in the space, but it’s going to be very fascinating to see.
how much volatility you can strip off of Bitcoin over time? Like will strategy be able to successfully maintain stretch in a 99 to 101 range over time? I think that’s an answer that is unknown at this point, right? I would almost say like for most investors, it probably doesn’t matter because their coverage of the interest is so good that they’re gonna be able to pay the interest. I think the question just comes down to what will the actual volatility of this thing be?
over the next 10 years. And think that’s an unknown and it should be an unknown at this point. Strive, given the fact that we have a higher interest rate or a smaller company, and we’re at this point, I would say, unsure of how much volatility you’ll successfully be able to strip off a Bitcoin in these products. We did a trading range of 95 to 105. And so if you actually look at that as a target, it still is very attractive on a vol basis relative to traditional high yield bonds.
So that’s the way I look at this is that SATA and stretch, mean, SATA at 12.25 % interest, that’s almost double what high yield bonds are paying, right? On an interest basis. And I think potentially it could have less volatility than high yield bonds. Do I think that there will be massive interest for that? I do. Do I think that these need to be stable coins? I don’t. I don’t think that you need to take a 12 % interest and say this thing is a stable coin.
I think it’s great that you’re starting to see kind of the app layer on preferred equity. So you’re starting to see some innovation of trying to take Seda and stretch and turn them into stable coins at a little bit lower yield. And I do think that you’re, that there are ways to strip down the wall of these even further to move in that direction. You know, everything is from that perspective, everything’s breakable, but this is not like in my view.
If it’s done well, like for these app layers, this is not like a Luna or something like that, right? That’s designed to blow up. think the risk is like, can they successfully defend the peg? Not like, is the assets there? The assets are there, the coverage is there, the risk, the rating, the default risk on these, think are extremely low. So I think these are very attractive vehicles, but they’re emerging, right? so, know, Seda is trading at this recording.
about 95 and 97 and a half. So it’s within our stated range, right already. ⁓
Stephan Livera (52:01)
Your band, And just sorry, just on the band, can you just explain
what happens when it goes out of that band? Like, do you have a market maker or someone trying to go into the market to bring it back into the range? Or is it more about adjusting the rate to try to keep it in there? Or how do you do that?
Matt Cole (52:17)
Yeah, so it could be adjusting the rate. It could be capital markets activities. So like if it was going too high, we could issue more shares. ⁓ But adjusting the rates probably the primary function. And these are for both companies, these are long term ranges. And so it’s not overly concerning if Bitcoin drops 20 % and these things fall out of the range for a little bit. I actually don’t think they need to as they get better understood, but
Do I think that that is a problem? Not really. If it fall out of range on the low side, we’d likely start to raise the interest rate to bring it back into range over time.
Stephan Livera (52:57)
Yeah. And who do you see as the main, let’s say customer or user or investor in SATA? Is it, you know, just people who want somewhere to park their money that’s better than otherwise being in bonds? Is that how you see it? Or how do see it?
Matt Cole (53:11)
Yeah,
this kind of gets into the question that you kind of hinted on earlier. It was focused on Bitcoin treasury companies versus owning Bitcoin, but it’s really digging into the unique investment needs of different people. So people in retirement age generally need income and they have a desire for less volatility. you’re, you know, whatever, let’s say you’re 70 years old and you’re trying to think about how do I survive for the next 20 years of my life?
25 years of my life and you’re saying, okay, well, do I want to take amplified Bitcoin exposure for my last 25 years of my life? Like for most investors, I mean, if you’re wealthy enough, maybe the answer is yes, because you’re thinking about leaving money behind. But for most investors, probably say no, right? Maybe some will want a little bit of it, but they’re thinking about income. And so how can you generate a good income with a risk that you’re comfortable with? And what we’re seeing is a lot of people in, I would say the
50 and above category high net worth individuals that are looking at income that say, you know what? I like Bitcoin. I understand Bitcoin. I’m also a real estate investor and I have all these real estate properties and the real estate properties, I have to, you know, maintain them and I earn a, you know, whatever a 5 % yield and I have to do a lot of work. And you’re telling me I could sell that real estate property and I could buy Seda or I could buy stretch and have minimal volatility and double the yield.
and no work, and it’s return of capital, meaning it’s tax deferred, they’re like, sign me up for that all day. And so that’s a big investor that we’re seeing in that. We’re also seeing people that have different accounts. And this also gets into, I think, one of the use cases for Bitcoin treasury companies is like, okay, should everyone own Bitcoin? Yes. Should people try to have it in self custody? Yes. Although I think some boomers…
I think might have more risk in that because they just don’t understand technology. But like, is that a principle that we should support? Yes. ⁓ But some people have 401k accounts. You can’t buy Bitcoin. You could buy maybe a Bitcoin ETF. You could buy amplified Bitcoin. And if you’re young and you’re looking at, you know, retiring in 20 years, 30 years or 40 years, you might say with my investment time horizon, I actually have the ability to compound and ride out and I have money in accounts like…
Bitcoin treasury companies, think that’s like the pristine use case for them, for someone in that camp, because they want amplified Bitcoin exposure. then you have people that, you and I think this should be the base layer, is everybody has self-custody Bitcoin to preserve your financial freedom into the future. But at a certain point, you probably have enough of that. how many Bitcoins do you need in self-custody before, you you’re kind of set for life from the financial freedom perspective? That answer will be different than everyone.
But there’s a level where you can start thinking about your portfolio more holistically. And I think that’s where these different products, this financial engineering, come into play. And I think that’s how you just take the base layer asset and you meet the different needs of different individuals.
Stephan Livera (56:20)
And so…
When it comes to, as you were mentioning there, there are various pools of capital that either can’t or won’t directly buy Bitcoin, or maybe they won’t directly, they can’t ⁓ buy, or they don’t want to buy the common equity of one of these treasury companies. And I guess that’s one aspect you’re targeting. And then of course, as you said, it’s…
relatively unknown for now. There’s a lot of people who are trying to chase some yield in like whether it’s real estate or they’re trying to be like a dividend investor in like stocks in like fiat stocks that don’t have any Bitcoin and for them they just don’t they aren’t even aware that these products exist and so I think that’s kind of a big aspect of the education journey of like helping people understand okay this is a product that exists so maybe you want to elaborate a little bit on the different
pools of capital that are out there that can’t just directly buy Bitcoin.
Matt Cole (57:15)
Yeah, so there’s many. I’ll give you some of the bigger ones actually, because there’s obviously people that have 401k accounts or whatever, IRAs that that money is trapped. And yes, with an IRA, I’m guessing a lot of the Bitcoiners are aware you can do self-directed IRAs, you can buy Bitcoin directly, you can self-custody it. We’ve done that personally. But, you know, certain people are not comfortable with that. They don’t have enough money for that. So 401ks and IRAs are a great example of kind of
trapped capital that really can’t buy Bitcoin directly. But then on the institutional side, this is where it gets, I think, more interesting, is there’s many large pools of either fixed income portfolio managers or equity portfolio managers that are Bitcoin bulls. And their investment mandate is equity only. So if you have an equity only investment mandate, you can’t even buy a Bitcoin ETF, right? Because that’s not common equity of a company.
And so if you’re an actively managed equity portfolio manager, this is trillions of dollars, right? Trillions of dollar pools of capital. And I think most people are aware that there’s a ⁓ known portfolio manager at Capital Group, Mark Casey, that’s like probably the best known figure that’s doing this, right? Equity mandate, massive Bitcoin bull. He can’t buy a Bitcoin ETF. He can’t buy Bitcoin in his portfolio.
So what’s he doing? He’s loading up on Bitcoin treasury companies and he’s crushing it. Right. Like, and that’s a massive pool of capital. Is that pool of capital going to change? Like, no, these are institutional investors that are going to have equity mandates. And as we mature and as people and I would say the millennial and younger generation grow into these portfolio management roles, which is happening in our Bitcoin bulls and our Bitcoin native, you’re going to see a lot of capital that just can’t do things other than buy
common equity, or if you have a income mandate, you can’t only buy income assets. So some could buy, know, whether it’s, you corporate bonds, some could, you know, have preferred equity in that mandate. Some might buy the convertible notes that there’s going to be demand for these because people understand the risk and they have guidelines that limit them and what they can buy. these, it’s just, it’s impossible to understate like how large these capital pools are.
right, that are looking for an edge and that these Bitcoin treasury companies provide a unique solution to them. Right. And this kind of gets back into the reverse split conversation just quickly for Strive is that we’re talking trillions of dollars of pools of capital here that have these different mandates that that are interested in opening up those doors. Why would you want to have a door closed to trillions of dollars of pools of capital?
And so part of our, our mandate, you know, to drive long-term value is to find these doors and open them. There’s other doors that we haven’t even opened yet that strategy is opening as we go. Like what are those doors? Well, preferred equity, it’s actually getting investment grade rated, right? Like strategy got a B minus rating. They’re not investment grade yet, but S and P didn’t even look at the Bitcoin, right? So clearly like they gave them zero value for the Bitcoin. There’s education to be done there. But as that happens, if you get these preferred equities investment grade,
That opens trillions of dollars of capital through the door. That’s a door to be opened as you develop a track record. So many investors require three-year track records before you’re investable, whether it’s on the common equity side, whether it’s on the preferred equity side, some have five-year mandates, Meeting those things, we’re trying to open up every door, tell the story, and then as we do that, we’re going to get larger and larger pools of capital. And we believe that’ll drive Bitcoin yield for the investors that are already in the story.
Stephan Livera (1:01:00)
So coming back to another, I guess, point of contention amongst let’s say hardcore Bitcoiners, I think, and we’ve sort of been touching on this a little bit, but let me state it to you this way and I’m curious to get your reaction because I think there’s a lot of Bitcoiners out there who maybe they…
They came into it by buying Bitcoin on an exchange and withdrawing to self custody and that was their experience and they believe that other people should be doing that too. And I think maybe over the last year or two, because of all the hype of treasury companies and okay, yeah, maybe we’re kind of in a lull now, but we’re coming back out. But anyway, summarizing, I think in simple terms, many of them might believe that treasury companies and treasury equity have cannibalized, let’s say, the normal demand for buying Bitcoin on chain and withdrawing.
But maybe the other side of that coin is more like, no, it’s actually growing the pie. So how would you ⁓ see that? And how would you answer that idea? it is Bitcoin treasured companies? Are they cannibalizing sort of on chain use of Bitcoin? Or is there a bigger picture here?
Matt Cole (1:02:05)
I think there’s a bigger picture here, but I think the question becomes, how big do you think Bitcoin can be as an industry? And so I think a question becomes, do you always protect and preserve the ability for people to self-custody their Bitcoin as an option? And the answer should be yes. Hardcore Bitcoiners, 100 % in that camp. I do not know a single ⁓ leader of a Bitcoin treasury company that does not agree with that.
And then the second question is, you promoting and preserving the freedom for Bitcoin at the nation state level? And if the answer is yes, who’s doing it? That’s actually an important question. And ultimately with what money? And ultimately the hardcore Bitcoiners are not funding that effort. They’ll yell at congresspeople on X, but there’s a few people that are funding it. Like Jack Dorsey funds a lot of efforts there.
to a major degree, like, but you need effort, need to promote and preserve those policies. And so I think Bitcoin treasury companies are massively additive in every single nation. And this is, think, one of the key use cases in my view of bringing Bitcoin treasury companies to every nation is to have a voice that’s well capitalized in the room with the politicians to promote Bitcoin friendly policies. And I think that
that you need those people and I think that we’re aligned as a company. So that’s kind of like the way that I think that this goes into the future and pretty important to promote.
Stephan Livera (1:03:46)
Yeah. Yeah. So I think, yeah, we’ve touched on a lot of things. Yeah, I guess, you know, it’s kind of the start of the year. Do you have any thoughts on where you think things will go this year? I know, you know, the last year has been kind of wild, right? Like with all the different things that have been happening. Do you have any thoughts or outlook on what’s going to happen in Bitcoin this year in 2026?
Matt Cole (1:04:09)
Yeah, I think the fundamental equation for Bitcoin has never been stronger. Regulatory risk is at an all-time low. I think from a technical perspective, we seem to be working through some of the OG selling at this point on some of the on-chain metrics. It looks like it’s slowing down. And I think from a ⁓ price chart perspective, which I view as like one piece of the mosaic, probably the least important piece of the mosaic, but
but a piece that is fun to talk about, I think all things point to limited downside from here for Bitcoin. Bitcoin looks like it’s breaking out as we talk, as we speak, right? Like have a two year downtrend. I it looks like this thing could just be rocket shipping in the near term, but let’s say that that doesn’t play out for whatever reason. I don’t think we break 60K. Or if we do, it’s like for like a…
So if your downside in Bitcoin is like 40%, let’s just say, which in traditional assets is a lot, but like, I think this is low probability, but I think it’s always important to look at downside versus upside. What’s the upside? I mean, this thing going to, you know, a million plus over the next several years is my view. And whatever, with the average compound rate of 30 % or so, this is going to be one of the best risk adjusted return opportunities you will have to buy into Bitcoin right now.
even if you think there’s some chance that it goes to 60k. Because I think that’s a somewhat of a tell chance, but a chance. And if you think that we’re more likely to go up this year and definitely years into the future, it’s much easier to invest now from a total return perspective, risk adjusted return perspective, than if Bitcoin’s at 300k or 350k. Because it becomes more difficult to estimate what the downside would be in a bear market.
And right now I think we’re right around high levels of support. Chart looks bullish, fundamentals look bullish, everything that I think reasonable looks bullish. This is the best time to go out the risk curve in my view. ⁓ And I think everything that’s happening geopolitically, these are all bullish tell-winds to Bitcoin. I mean, it really is like fourth turning stuff that we’re seeing right now with Venezuela and Iran and the Federal Reserve and…
know, Powell making the statements that he’s making, which I think are silly and I don’t have sympathy for him, but like, know, whatever, trying to get people to believe that the Fed is independent still, and then all the central bankers around the world, you know, issuing statements of support, which I think fall flat. But anyways, know, these things that are happening, you’re seeing the backdrop for what Bitcoin was built for continue to play out, right? ⁓
Stephan Livera (1:06:49)
It’s quite sus, yeah.
Matt Cole (1:07:01)
Doge has failed. And so it’s like, think this is a time when you want to be max long Bitcoin exposure, which is like, I I announced today I bought a bunch of ASST stock. Why did I do that? I did that because I want to be max long risk right now for the next, you know, five, 10 years. And I think, you know, obviously I think I’m biased, but I think our stock is the best way to do that. But the point is, it’s hard to find a better risk return scenario than you have right now. And I think you want to be out the risk curve.
Stephan Livera (1:07:30)
Yeah, I think there’s so many ⁓ bullish factors for Bitcoin right now, the broader industry. we’re seeing development in all these different areas, whether it’s treasury company stuff, whether it’s L2s and payment stuff, whether it’s medium of exchange and just all these aspects of it. So I’m quite bullish. I think we should see this as, a rising tide is lifting all boats. ⁓
So I think, you know, I’m excited to see what happens over this year. So yeah, look, thanks for joining me. Listeners check out strive.com and you can follow Cole on X his handle is at Cole macro links will be in the show notes as always. ⁓ Thank you, ⁓ Matt, for joining me on the show today.
Matt Cole (1:08:13)
This was fun. Thanks for having me.