In this episode, Stephan Livera chats with James Van Straten, senior analyst at CoinDesk, to explore the current state of Bitcoin and macro markets. They discuss the nature of bear markets, cycle theories, technical indicators, institutional behavior, and macroeconomic influences affecting Bitcoin’s price and sentiment.
Takeaways:
🔸James shares his perspective on Bitcoin’s bear market versus previous cycles
🔸Debunking the four-year cycle hypothesis and its implications
🔸The significance of institutional demand and holder behavior in market bottoms
🔸Technical analysis tools like realised price and 200-week moving average support
🔸The impact of macro events, such as geopolitical conflicts and macroeconomic trends
🔸The role of options markets, liquidity, and sentiment indicators during downturns
🔸The importance of dollar-cost averaging through bear markets for long-term gains
🔸Insights into emerging Bitcoin treasury strategies and product offerings like STRC
🔸How industry players are raising capital even in challenging market conditions
🔸The potential for demand recovery and signs of green shoots in the current environment
Timestamps:
(00:00) – Intro
(00:40) – Is this bear market different?
(02:48) – Does James believe in the 4-year cycle?
(07:32) – Realised BTC price & 200WMA
(13:13) – Total BTC supply in profit
(17:22) – Long-term holder supply
(19:20) – UTXO Realized Price Distribution (URPD)
(25:00) – Bitcoin’s performance during the US-Iran war
(29:49) – Strategy’s massive BTC purchase using STRC
(36:31) – Rise of Bitcoin treasury companies
(39:04) – DCA during bear cycles
(41:09) – Closing thoughts
Links:
Stephan Livera links:
- Follow me on X: @stephanlivera
- Subscribe to the podcast
- Subscribe to Substack
Transcript:
Stephan Livera (00:01)
Hi everyone and welcome back to Stephan Livera podcast. Joining me on the show today is James Van Straten. James is a senior analyst at Coindesk. I’ve known James around the space for a couple years. James is well known for writing and speaking about Bitcoin and wanted to get him on the show to chat about his views about…
about this bear market, is it over, is it still ongoing, where are we at? So yeah, first off, welcome to the show, James, and yeah, give us a bit of an overall flavor of your view, how are you seeing things in Bitcoin and macro world?
James Van Straten (00:32)
Cheers, thank you for having me on Stephan. Yeah, this bear market is, well this is my third bear market and I think each bear market is very different. When I got in 2017, when I got in December of 2017, that 2018, 2019 for me was just so wild west. It was like, my money’s kind of gone but because that was the foundation of learning about everything.
It was just more of a, that was, you know, with the phrase like bear markets are for building that kind of mentality. Like my head was so in the weeds then it was like the price was so irrelevant. was just understanding everything. The 2022 bear market was, it was actually really bad. Not.
It was bad because all the assets were going down. So it was TradFi that was getting hit, Bitcoin, everything was getting hit. ⁓ And there was just no let up anywhere. You also had the fraud and the contagion within crypto as well. And that for me as well was like, I’ve worked so hard to get into this industry and like be in it. And then it was like, there’s so much bad.
actors in this space it’s like I don’t even know if I want to be in this space anymore that it was just it was repulsive and now I think we’re in this bear market now where it’s like we had the October 10th crash
We can have speculation on what happened there, but mainly most of it wasn’t there was nothing to do with the contagion really It was just market makers and liquidity that was kind of getting pulled And if you look at TradFi now, it’s held up extremely well so
every bear market has been different, but again, this bear market has had really like positive sentiment towards it. And ⁓ yeah, it’s fascinating to see how every four years these bear markets change, even though the price is down, sentiments different, or there’s just so many nuances with each bear market. So each one is its own really.
Stephan Livera (02:38)
Yeah. Well,
let’s get your take on the four year cycle because there are still debates raging about this. Do you believe in the four year cycle? Yes or no? And where are you at there?
James Van Straten (02:49)
No, I’ve never believed in it. Again, coming in 2017, I never…
I don’t believe I ever heard the phrase four year cycle. That’s the first thing. The first time I ever came across the four year cycle was kind of like in, I think it was like 2021 when it kind of just then happened in November. I never really heard of it in 2017. It was definitely not a thing in 2013. But then if you look at the mathematics behind the actual issuance rate into Bitcoin and its market cap, I would imagine that even
2020 halving had very little impact. Maybe the 2016 from a mathematical standpoint did have some nuances of effect but it’s more psychological than anything and if we really want to be pedantic about the four-year cycle
last year was the parabolic blow off top we were meant to have and we never got that expansion phase. and the year actually finished like 20 % down, which was even better. The only, the thing that the four year cyclers can now hold onto is we topped in October 6th and that was pretty much on however many days from the cycle bottom. It happened to be that, but it kind of coincided.
with $500 billion worth of spot sell side pressure from OG and long term holders for two years consecutively. As soon as the ETF launched, Bitcoin at 100k, there was just absolute vast amounts of spot sell side. So when people refer to Mike Stracci buying or the ETFs are buying or anything like that, the spot selling dwarfs any other narrative.
came in for the last few years. So looking at the data, what’s really interesting was in December 2025, over a 30 day period, 1 million Bitcoin was sold from long term holders. 1 million Bitcoin.
The biggest debate we have in Bitcoin right now is quantum on Satoshi’s coins, a million Bitcoin. And I know there are theories being worked around on what we can do. We’ve discussed this in the past. think Hourglass version two was one of them that we’ve discussed previously.
But for me in a way that we’ve proven to the market that, all right, the price goes down, but it can take a million Bitcoin to be sold over a 30 day period. it can hold it. So the quantum stuff for me, I know this is getting onto a side subject, but I’m just saying in that regard that the market can handle a 1 million Bitcoin sell side pressure.
But yeah, that was also part of, I think, the four year cycle. I think the quantum narrative was getting louder. People were selling and it just so happened that they were selling into that peak of four years. I think everyone was expecting 150 circa. And because it wasn’t really coming, it had three or four jumps at about 120K and it never really made it. And I think people started to panic sell more and more. And then you get the self-fulfilling prophecy. You had the tariff tweets with Trump and then the October 10th.
and it was like, that’s game over. So I think most of it is a self-fulfilling prophecy.
Stephan Livera (06:28)
Interesting, yeah, so.
essentially, you don’t believe in the four year cycle, but you would say really the main, let’s say the recent point in their favor of the if you’re a four year cycle guy, is that the timing of the top, let’s say October of 2025 ish, roughly aligns with what a four year cycle person might have believed. But other than that, there are a lot of things that didn’t really align like we had an all time high before the halving, right, that was unusual. And even you know, it remains to be seen, like, what happens if we
James Van Straten (06:54)
Yeah.
Stephan Livera (06:59)
got an all-time high this year? Does that also kind of like wreck the four-year cycle sort of thing? Because if you’re a four-year cycle guy, you might expect, we’re going to have like a typical 60 to 80 % drawdown over the course of this year and then towards the end of this year. If you’re just looking at the calendar, if you’re not thinking about the institutional or the other factors that are going on, you would just be thinking, okay, end of the year, you’re going to rebuy the bottom at 40k or whatever. That would be if you’re a theoretically four-year cycle
I guess, but there are let’s say reasons to believe that that may not play out, right? How do you see that?
James Van Straten (07:38)
I’ve got some charts. Let’s go into some charts because this is one of the things that I’m trying to understand currently of where we are. The Bears argument is we’re in a midterm year that’s statistically a very weak year. Let me share my screen window here. Let me know when you can see it.
Stephan Livera (07:40)
Sure, let’s go.
Yep.
James Van Straten (08:02)
So yeah, I’ve got a couple of slides. We can just go up and down and just go through them. the argument is, the actual argument is we’re following the 2022 cycle. That’s what the argument is. And… ⁓
And the two main support lines for Bitcoin are the realised price and the 200-week moving average. The realised price being the average price of all coins in circulation is like 54,000 realised price and 58,000 is the 200-week moving average. This only goes back to 2021. But if you actually have, I actually should have done, I should have had from
- But in just for the context, Bitcoin typically uses the 200-week moving average as support each bear market. ⁓ And it tends to go below the realised price every cycle.
But again, for purposes here, we’re only interested in really in 2022. And you can see I’ve highlighted in the blue box in 2022 that the Realize price actually started going below the 200 week moving average in around June, July of 2022. And the price went straight below both Realize price and 200 week moving average. Like it didn’t even use it as support as opposed to when we went down to 60,000 in February, we used both as support.
or
we didn’t actually, yeah, we didn’t hit either the 200-week moving average was high and use it as support. So that’s already structurally different as the two main indicators I was looking at. And if you actually then kind of zoom out here.
the price kind of stayed flat. I think it was at 20,000 that Bitcoin was from June all the way to October. And it only then took another leg lower because of the FTX collapse. And then it obviously rebounded back in January. So I think you can just get rid of that FTX collapse bottom. We had lunar in May, which was the first contagion point. And I’ve always said,
I said October the 10th, well not October 10th specifically, but around October when we were starting to go down, I was like, okay, that October 10th is such a big point that…
this could have systematic blow up similar to 2022. So I said, all right, six months is the window of opportunity that I’m giving the market of we are now going to make a bottom around here because it took six months for the FTX collapse to happen after Luna from May to November. We’re now at March 16th. That’s over five months now since October 10th. So I still said I will give another three, three weeks, three and a bit weeks till we make a new low because
there has going to have to be contagion, there’s gonna have to be for selling, all of that kind of stuff. And we only really got block fills who no one’s ever heard of really. Like there’s some other entities that we have heard, but again, it’s no real contagion. So.
Stephan Livera (11:25)
Right, like the rumour
in the October thing was like Winter Mute, that was the rumour going around. like comparing back to 2022, as you said, there were so many, right? was Terra Luna blew up, 3Hours Capital blew up, ⁓ Voyager, Vault, BlockFi, Celcius, and then finally kind of FTX was like the big, you know, the piece de resorce or whatever, the big final one. Yeah.
James Van Straten (11:29)
Yeah, that’s nice.
Celsius.
Yeah.
Yeah, well, NFTX were just
selling Bitcoin ⁓ on top of that as well to fund everything. ⁓
Stephan Livera (11:52)
Right, yeah, whereas this time it doesn’t
seem like, I mean it’s possible maybe, but at this point it would have to be something massive, like I don’t know, some huge hack at Coinbase or something huge would have to happen for that to be something similar now.
James Van Straten (12:03)
Yeah.
Yeah, so ⁓ I said I’ll give it another three or so weeks and then then the October 10th is behind us. How Bitcoin was trading…
was irregular after October the 10th. So you know you get those bark patterns. So it goes up, it goes sideways and then goes straight down. That a lot of market makers did have to pull, pull out and the liquidity started to evaporate and Bitcoin just wasn’t trading how it should. Statistically, since the ETF launch, Bitcoin tends to make a low on the first 10 calendar days of the month. It was just, there was no…
observing how Bitcoin trades, was just no regularity with how it was moving. I just couldn’t put a thing on it. But now the last since really February is actually becoming is trading more normally. Like we made a low on February the sixth.
So it’s starting to pick up again. You can see market makers coming back in. So I am happy with how it’s trading the volume and the liquidity. ETF inflows are starting to come back in. So US institutions are starting to trust it more, which is great. But if I go to some other charts, I think.
This is the supply and profit and loss chart.
Stephan Livera (13:30)
yes, you
were talking about this. When they meet, that’s typically a bottom.
James Van Straten (13:32)
Yeah,
because we need to understand. So again, for me, drawdowns from the all time high have, it’s all been higher lows. So you had like 85, 90 % in 2014, 2018 was like 80%, 2022 is like 75%. So on a full retail cycle with no institutional adoption this cycle, would have said.
70%, give or take. But because we have had institutional adoption this cycle, I would have said maybe 50 % to 70 % would be fair for that drawdown because of the ETFs, because of Sailor.
because of, and you see these other 13f filings with institutions like Harvard and stuff like that. And also like the option strategies are so much bigger now, which compresses volatility. So that’s a fair assumption, I would say. But yeah, when you look at supply and profit and loss, every time they converge with one another, that’s a bear market bottom. You don’t know how long, obviously, it lasts for. And they did the same thing again in beginning of February.
And obviously when Bitcoin hits 60K and it pumped to 70, people bought obviously at 70,000 and ⁓ a bit above. And then obviously if Bitcoin goes below, that’s even more supply and loss. So we had the 20 millionth Bitcoin ⁓ mined last week. So that was 10 million in profit, 10 million in loss. And to me, that is just a huge amount of demand destruction. Most of the USD denominated wealth has come
come in above like 80, 90,000. So you have got huge amounts of unrealized losses. So for me, I am happy for that in terms of we have seen enough capital destruction. I don’t think we’ve seen enough time based destruction. Yeah.
Stephan Livera (15:40)
Okay, like the Checkmates kind of price pain versus time pain
and there’s a bit more time pain to go kind of concept.
James Van Straten (15:45)
Yeah, and I don’t know about what you think, but like, maybe this is, it has been a lot easier this side, this, this bear market, which makes me a bit skeptical. Maybe there is another leg lower, ⁓ because that we did have that huge capitulation with, 60,000 and it’s like, is that, was that really it? But again, the day of that
Stephan Livera (16:00)
Yeah.
James Van Straten (16:12)
February 6th was Mike Stratchley’s earnings and institutions.
were fully de-risking into that event because that’s when quantum computing was the loudest I have ever heard it. Mike Shachar going bust was the ⁓ loudest I heard it. He was sitting on like 10 billion of unrealised losses, even though it makes absolutely no difference. And then he had his earnings call and Saylor addressed the quantum threat and then the price went up. So it was like that was the fear going into Mike Shachar.
because Mike’s actually, anything happens to that entity, that sets Bitcoin back just optically as well. So I think that’s where the full risk was. And yeah, and I think obviously it’s also overblown, but when the price is dropping from 70 to 60 in one day, yeah, it’s going to be warranted.
Stephan Livera (17:13)
Yeah,
I mean from a subjective field perspective, it felt like that was like that was a good candidate to be the bottom. that’s definitely a decent candidate that 60k was the bottom for this bear cycle. Of course we could go lower, but ⁓ you know, I think there’s probably been enough pain. So we’ll see. What else have we got here?
James Van Straten (17:24)
Yeah.
Yeah,
it’s just seeing how the holder dynamics have changed. So you can see how I’ve highlighted in red is the long-term holders and they have huge wicks up and huge spikes down because it was such a retail asset. And then in green is since 2024, the ETFs and the long-term holder base is you’re getting up and downs.
in much shorter durations now, instead of these cycles becoming so much longer. So to me, it’s just the holder base has changed so much and we’re already starting to see the long-term holder supply starting to tick up again, which is reminiscent of the previous two.
Stephan Livera (18:19)
Right, so that’s like a constructive
sign, right, you would say?
James Van Straten (18:22)
Yeah, because if you think a long-term holder is six months or more, that’s pretty much the whole drawdown that we face. So they’ve bought in October and they’re holding through this. So to hold through a 50 % drawdown is, you’re not going to be, yeah, you’ve earned your stripes essentially. But again, supply and profit, I find TA, borderline,
Stephan Livera (18:38)
Yeah, you’ve earned your stripes, you know?
James Van Straten (18:52)
useful on long-term time frames. Anything short is just astrology. But again, it makes higher lows. I think again, that’s a fair assumption. That’s the supply and profit. This is more of the time pain that 80 % of all holders
when you have 80 % of all holders that have held Bitcoin for longer than six months is usually a bottom and we’re still below this red line. So that could be another three months until we have enough holders that have held for longer than six months. ⁓ And then this one was really interesting. And I find this entity adjusted,
URPD metric. Fascinating.
Stephan Livera (19:45)
What is it? Unrealized?
What is that?
James Van Straten (19:48)
I can’t remember what URPD stands for. It’s about price distribution, but it’s to do with price buckets on when UTXOs last moved so they can find out the supply clusters at each price bracket. And this chart actually is March 15th, 2022. And why I have March 15th, 2022 is because again, if we’re looking at the 2022 four-year cycle mythology,
Stephan Livera (19:54)
Okay.
James Van Straten (20:17)
Bitcoin went from 10 to 60 at the end of 2020 to the beginning of 2021, like in three, three, four months. And there was no support. There was no testing. It just went up 10 to 60 because of the COVID stimulus and everything like that. When we hit 69 in November 2021, and then in 2022, went straight down.
⁓ to the FTX collapse bottom, which was 15,000. So we’ve pretty much filled in the entire gap. But in 2024, we had that whole year of chop solidation, which is where we are now, where we’re still testing it. we’re now 73,000 was the March 2024 all time high. So we’re now at that level and we’ve used it as support. But this…
for me was March, so this is March 15th, 2022. And you can see how little supply there is standing here. And that’s why when Bitcoin started to fall down in 2022, it was so easy and you had those liquidation cascades because there was just no support. Because no one actually bought any Bitcoin between 20 and 30,000 or even 20 to 35,000. No one bought anything. I can get the chart after.
But the stat is over 600,000 Bitcoin have been purchased on this drawdown between 60 and $70,000.
Stephan Livera (21:51)
I
see the point you’re making. basically, it’s kind of again, so in a way, a lot of the themes I’m getting out of this are really there’s hope yet for Bitcoin, right? That the fact that there were a lot of people stepping in to buy coins in this range of 60 to 70k is kind of a constructive sign compared to historically where maybe there was not that, you know, mass of people like running in to buy some coin when we saw these big drops in past cycles, let’s say.
James Van Straten (22:07)
Yes.
Yeah, I
think it got to a level where, all right, you have people, I can make an argument why Bitcoin goes to 40,000. It doesn’t mean it goes there. I just think enough people and enough people with size said, okay, 60,000 is cheap.
Stephan Livera (22:38)
Yeah, I think that’s right. And I think you would find probably you would find a lot of supply moved around that around that point, right?
James Van Straten (22:45)
Yes, I think it’s around 7 % of the supply now sits between 60 and 70 thousand.
Stephan Livera (22:51)
Yeah, yeah, yeah. And just to clarify that URPD stands for UTXO Realized Price Distribution, just if anyone’s interested. But yeah.
James Van Straten (22:59)
Okay, yeah, it’s you two, so, okay.
Stephan Livera (23:01)
Yeah,
James Van Straten (23:01)
Nice.
Stephan Livera (23:02)
but yeah, I mean, it sounds to me pretty positive. you know, I just think the main, obviously I’m not, I don’t hold myself out as some cycle timing chart guy, whatever. Like, but I think the main point just for listeners would be make sure you’re DCAing through the bear cycle, right? Like it’s such an important time to have your DCA on. ⁓ You know, you’re not gonna catch the exact bottom, but just make sure you’re, you know, you’re buying a little bit. Ideally, just buy a little bit every day. If you can just do that.
I think you’re not gonna time the exact bottom, but you’ll catch enough of it that you’ll feel good about that in a few years to come. It’s how I see it.
James Van Straten (23:41)
No, you’re exactly right. You’re never going to get the bottom. Anyone says that they get the bottom as a liar. You just buy the entire bottom. Just buy it And yeah, you’re never going to catch the bottom. In hindsight, we don’t know that the Feb 6th was the bottom, but that candle just looked so appetizing. yeah, you do look back on moments where the FTX collapsed, COVID,
⁓
that those certain days do show it. You never get those V-shaped recoveries. That is literally only COVID because of the stimulus. You usually get a retest of the lows and you get a retest of the lows with the implied volatility actually coming down as well. So I did a chart which I can try and find whilst talking, but looking at the volatility of Bitcoin is also really important because that Feb 6th day showed there was so much panic and
fear in the market. And then once you get rid of that fear, you can actually get the people buying it. And then once that comes, you retest the lows, but you don’t want fear to pick up. You just want normal buyers to step in and they’re like, yes, now we’re calm, we’re buying the lows, and then it can come back in again.
Stephan Livera (25:02)
Yeah. I
mean, just if I had to briefly explore the kind of the bear case, maybe if something, now obviously this whole Iran war is, you know, it’s a massive thing. It’s been a big thing over the last two weeks or so. You know, possible, like if something happens there, straight of Hormuz, something there, like maybe something there does it to kind of get us that final bottom. But yeah, that’s probably.
That could be a scenario, but otherwise I think it’s people going to be stacking and just DCing up.
James Van Straten (25:31)
So I think.
I think it’s also important to observe what Bitcoin has done during the Iran war or the Middle East conflict and what everything else has done since then. So the war started on February 28th and Bitcoin was, let me get the right price, but it was…
Yeah, it was about 67,000, but going into that, the sentiment was shocking. Even I was like, 55,000 is nailed on. Like, I will put serious money on that we’re going straight to that realised price when the war started. The lowest we went was like 63, and we haven’t looked back since. I think Bitcoin’s up 15%.
since the war started. Gold is down 5-6%, silver is down 12 or so. The US equities are flat to negative. And even software stocks that have some correlation towards Bitcoin for some reason, even they bottomed and are slightly up as well. So it’s like…
I think you could get to a point where there is as much of it, because markets will cause as much destruction as possible. And I’m definitely not saying Max Payne is higher, but…
I could have made a very good argument and a better argument for a 55k than 73k right now. And I think so many people are sidelined. Even the options market for the last expiry in February, $40,000 was like the most popular per option, meaning everyone is hedged to the downside. I think even traditional finance like that, the put hedging was just enormous. It was like the biggest ever. And that’s why equities just
haven’t done that badly. Like everyone’s expecting, black Monday, black Tuesday, black Wednesday. There’s gonna be, one of these days is the bottom’s gonna fall out and it hasn’t. And then if you look at the VIX, the volatility index, it spiked to 35 or so last Monday, which is a one year high. But because the market’s been in fear,
for like months, it’s just been edging higher and edging higher. And then it actually gets to the day where it was the week after the Monday of the war. And obviously…
going into a week, Friday, so Fridays are typically bad because of a weekend, you have high fear, you don’t know what’s gonna happen and then Mondays, oh my God, it’s gonna be Armageddon. So the market was always hedged. And then as soon as Monday happened, VIX at 35. And typically when VIX is high, Bitcoin bottoms. But the interesting thing was in Liberation Day of 2025, the VIX was at like, I don’t know, 70, was like double the fear. And it was like, why?
was that so much worse than this is because the market is just fearful. Like Bitcoin has been in extreme fear now for like 60 days. Fear or extreme fear, actually mainly just extreme fear. And we’re at 73,000. Like, it’s absolutely insane. Even the stock market is like in fear and it’s like a few percentage points off the all time high. I…
Yeah, it’s mad to think how fearful the market is and we could just be fearful and it’s that it’s that theory of just climbing the wall of worry and that’s why bitcoin could just keep going higher as more and more people are sidelined because you do look at okay now what are the options for bitcoin to go lower you’ve got a hundred dollars Brent oil Brent crude oil and you’re like which hit 120
and you’re like, okay, there’s probably going to be a slowdown in the economy. Well, I was a huge proponent for re-acceleration in the economy. I think they would have to have hiked rates, that the US economy was so hot. had manufacturing and services and expansion. So you’re sitting there being like, okay, and then oil is probably going to cause a growth scare to the economy.
But other than a potential now recession, which should see rate cuts, but rate cuts aren’t even priced into the market yet. What takes Bitcoin lower? Yeah, maybe an extension of this war. I’m hearing from weeks, months, but.
I don’t see how that is, I don’t think that implicates Bitcoin. I think it’s liquidity now. And I think liquidity is trending higher. We can see the balance sheet increasing and the midterms are getting nearer every day, which is going to have to be pro liquidity.
Yeah, I think we’ve got one more month. They have to take Bitcoin lower in the next 30 days, in my opinion. That’s it.
Stephan Livera (30:45)
Yeah, and then
other than that, after that, it’s going to be mostly an upwards, let’s say sideways, and then upwards kind of
The other kind of interesting thing, like just recently, we just mentioned, ⁓ strategy and Michael Saylor, they recently came out and did a massive buy and they had, think over $1 billion of volume on stretch, which is, mean, that is very remarkable, like to have at this time in a bear cycle for them to be raising, you know, this level of money on stretch. I think we’re starting to see, you know, some real signs of demand and real growth there. So do you have any reactions on that? And what does that portend for?
Bitcoin.
James Van Straten (31:28)
Yeah, think firstly for context, again from a cycle perspective, Mike’s strategy has gone down 82 % and the previous cycle it went down 85%. So that’s a higher low. So I would say the lows are in for Mike’s strategy. And then he came out today with a 22,000 Bitcoin purchase for 1.6 billion, which is the fifth biggest purchase.
ever since he started his strategy, which is incredible. His sixth biggest purchase was also in January. So like he has proved to the market that he can raise well over a billion in a depressed bear market.
So then you had stretch at 1.18 billion and the common stock at 3,400 million. And I think the thing that was so surprising was the common wasn’t hit as hard. And I didn’t think it was that surprising because I think we’re now getting to a point where he’s got to now prove that stretch.
is going to be the Bitcoin accumulator because he can’t just rely on the common and I think moving forward the stretch will be his primary Bitcoin accumulator and the common will be used at more at more opportunistic times.
when MNAV is well above one, where maybe he needs to use it for the USD reserve or those kind of moments. But because stretch won’t affect the common stock share price, it is way more accretive. And that’s the focus. We had the ex-dividend date on Thursday.
it lost par on Friday, it’s still below par today. I would expect it probably to creep back up next couple of days. But I think maybe that dividend will have to go probably to 12%. But it’s hilarious in a way thinking that 12 % is 12 % would be a very high cost of capital for a company. But because he’s raising 1.18 billion,
from stretch and then you do an 11.5 % dividend on 1.18 billion. He can self fund that stretch mechanism through him raising through stretch. So the appetite…
will only be the appetite gets greater the higher the yield he’s not going to reduce that yield but because he can raise so much capital there is no issue with him with these dividend obligations the total dividend obligations just crossed over one billion but he’s literally just raised 1.18 billion in one week on one preferred so
Stephan Livera (34:32)
Yeah, it’s just
mind-blowing the kind of numbers, right? Because as you said, he is able to raise so much that he can just…
Payback, you and I understand like obviously the criticism which I disagree with obviously but some of the the fiat investors side of seeing it as like oh This is like a ponzi or is ponzi adjacent or Like they’re just not understanding what this is like because this is built on Bitcoin and it on obviously like and openly For all of us you have to be bullish on Bitcoin itself, right? You have to think Bitcoin is gonna grow it, you know, call it 25 30 Maybe 40 percent per year over the next let’s say 10 years ish
James Van Straten (34:51)
Yeah.
Stephan Livera (35:10)
and similarly high rate. And also people need to understand, you’ve got to put this into context, stretch is otherwise competing with yield seeking capital that these pools of capital are like trillions of dollars and stretch today is in the ballpark of five billion. So that’s how small it is now versus how big it could get. Now of course, stretch is not the only one, there’s SATA from… ⁓
James Van Straten (35:29)
Yes.
Stephan Livera (35:37)
Strive and you know meta planet is going to do their own one and I’m sure you know other people will do their own versions of it But nevertheless it just shows you just like how? ⁓ Early this is as an overall opportunity And it’s just a matter of more and more people waking up to this opportunity and understanding what’s going on
James Van Straten (35:56)
Yeah, I fully agree. And every week the stuff comes out with this company is more and more incredible. I’ve been a shareholder pretty much since day one because of being in the UK. have, honestly for all of Yeah.
Stephan Livera (36:11)
Right, this SIP thing that you guys in the UK, you can’t buy
Bitcoin ETFs in that, so people were buying MSDR and so on.
James Van Straten (36:17)
Yeah,
there were no Bitcoin ETFs or we got banned from Bitcoin ETNs. So Microsoft was the only play and I’m actually hit. Apparently in April they’re reversing the ETFs again. So we’re kind of banned from ETFs or it’s just impossible to buy them. So I imagine.
There is such a huge pool of capital in London and the UK for Bitcoin that that’s going to go straight back into my extraction which will raise its premium again. And that was one of the main reasons why it kind of contracted from July onwards because the UK’s got their ETFs in August. A bit similar to MetaPlanet I think with Japan getting an ETF or the announcement it added to the contraction.
But yeah, this company will get to a million Bitcoin by the end of the year. I averaged it had to buy 6,000 Bitcoin a week or so. Absolutely nothing if he’s doing these levels ⁓ in these market conditions. But it’s also for me, looking at the convertible notes, that the first one converts in 2028, I think just before the halving. And…
And even though the stock was down 85%, the conversion premium is at $183, the stock’s at 150 now, just below 150 now, the bond’s still trading above par because the investors still value the stock volatility and the equity option. So yeah, this company is just…
Stephan Livera (37:54)
It’s gonna be a monster. It’s just absolutely gonna be massive. And then don’t forget, as Bitcoin price rises, everything changes again. Right now, yeah, people are feeling down. They feel like it’s a bear cycle and whatever. But imagine once Bitcoin gets back above 100K and then it gets to 130, 140, 150. There’s just gonna be so much excitement and attention and all these Bitcoin treasury companies.
James Van Straten (37:56)
Yeah.
Stephan Livera (38:20)
who are doing this and attacking this multi-trillion dollar opportunity. It’s just massive.
James Van Straten (38:26)
Yeah, I don’t mean to say attacking, I think we have to be a bit more conservative against the theatre system, we’ll say.
Stephan Livera (38:33)
Yeah, I mean, look, some people like to use the speculative
attack term like Pierre Richard and others just say, look, we’re just…
You know, we’re just borrowing at this price and we’re getting, we’re buying Bitcoin which is growing at that price, right? Or that rate, let’s say. But yeah, I mean, look, the broad point is just there are these big markets, right? The US high-yield corporate bond market, the US money market funds, that’s, and short-duration cash equivalents, it’s like seven or eight trillion, I’m looking at these numbers, and the broader US corporate bond universe, which is about $11 trillion. And so for all these people, they’re getting paid less than what you would using one of these Bitcoin, you know, stretch-style options.
James Van Straten (38:41)
Yeah.
Yeah.
And what’s really, really interesting is the, ⁓ it’s like a tax deferred structure in America. Yeah. So that adds a couple of percentage points on top because of it’s not, it’s tax efficient. But in the UK again, 21 shares have come out with their product on stretch. And because you’d have to pay income tax and capital gains tax on stretch.
Stephan Livera (39:14)
Right, the R-O-C thing, yeah.
James Van Straten (39:32)
but if you bought it via 21 shares in their wrapper, you only have to pay capital gains. So that’s incredible. And you’re gonna get all these products that are getting built on top of stretch.
and you’re like, okay, where could this go? Because you’ve got all the 2X, 3X volatility plays on the common stock, and then MSTY, MSTX, MSTU, and then all these products are going to come up and stretch. So it’s like it has its own universe within it as well. So the optionality on all these things are just endless. So yeah, it’s just incredible to see. No one’s talking about it.
lot cab fire reporting on it. They’re just absolutely bewildered by what’s even going on here. ⁓ But what I take such huge comfort in is that the company’s done a four year cycle. Like any crypto company that has survived four years is almost bulletproof. Like FTX didn’t survive four years.
So you do have to be put on a pedestal pedestal if you have survived four years as a company in this industry.
Stephan Livera (40:43)
Yeah,
and I mean, I think typically people sort of say like after you’ve been through your own like even for personal individuals, like if you’ve held through multiple bear cycles, you’ve quote unquote earned your stripes and it’s about surviving, right? It’s about making sure that you’re still around to experience the gains of Bitcoin longer term because yes, it can be volatile. Absolutely. Everyone knows that in the short term. But once you’ve been around for multiple cycles,
whether you call them four-year cycles or not, whatever, but once you’ve been through a few bear cycles…
You you’ve been through enough and I think that’s why it’s I think it’s a counterintuitive theme because what people do often like the the bears of Bitcoin will look at one point in time versus another point in time and they and they won’t understand that or they either don’t understand or they understand but they mislead you is they will ignore The gain that you would have got just by DCA right? Like if you were doing DCA DCA DCA all the way down and then by the time Bitcoin gets back up to its all time
James Van Straten (41:16)
Yeah.
Stephan Livera (41:44)
high, now you’re up on all those buyers that were in the bear cycle. so the paradoxically, it’s like the time people come to you interested in buying Bitcoin and doing DCA is in the bull cycle, but it’s actually really crucial that you do it during the bear cycle.
James Van Straten (41:58)
Yeah, yeah, the bear cycle is way more important than the bull cycle. ⁓ And it’s just that volatility is so important. And that’s why when you buy gold or the S &P 500, it’s like the returns are terrible because there’s no vault. And that’s the issue. It’s the volatility that actually gives you those returns. And it doesn’t make any sense until you actually buy it through a bear market. You look at your returns, you’re like, ⁓ now that really does make sense.
Stephan Livera (42:28)
Yeah, because look, naively people can just look back and say, look, you Bitcoin bulls, you’re a bunch of fools because look, the price right now is 73,000 and just look in like 2021, you guys only hit 69k, so you’re barely even up, right? But it just ignores it. In that time, we went down to 15k, we went, like we had all these…
James Van Straten (42:28)
So.
Stephan Livera (42:46)
moves in the price that if you are buying consistently you’re laughing. So I think that’s an important message to take away. But yeah, I think those are the key points I wanted to hit. Any closing thoughts that you want to touch on?
James Van Straten (42:51)
Yeah.
Yeah, well like the hash rate actually is going down about 7-8 % in the next difficulty adjustment. So I don’t know if that’s Iran based. I know Luxor came out with a report saying 8-10 % of the global Bitcoin computing power is located in the electricity markets in the Gulf States. ⁓ So that could be it. ⁓
it has held up extremely well. So maybe it’s starting to be priced that this war is going on and ⁓ people are taking stuff off the network.
Stephan Livera (43:37)
Yeah, could be. mean, I don’t have any special inside there, but yeah, interesting to see.
James Van Straten (43:41)
Sorry.
Stephan Livera (43:46)
Yeah, sure, ⁓ sure. yeah, so I think that’s probably the key things. Like I said, I don’t have a lot to add on the ⁓ mining side of that. ⁓ But I think the broad takeaway for me is really that there are some green shoots here. There is hope that there is, you know, people are stacking and…
James Van Straten (43:47)
Sorry, we’ll cut that bit out.
Stephan Livera (44:11)
We, yes, we’ve taken some price pain. We’ve got maybe a little bit more time pain ahead of us, but this is a great opportunity. If you have income, if you have fiat, if you can be stacking every day, that’s a great time to be doing it. So lastly, where can people find you online if they want to keep up with your analysis?
James Van Straten (44:29)
Yeah, I write and work at Coindesk and then I’m also on Twitter at BTCJVS. Cheers, Stephan.
Stephan Livera (44:35)
Fantastic. James, thanks for joining me today.