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I realize Saylor has to be very intentional in his responses with consistency and clarity. He’s responsible for a lot of capital and as a shareholder I appreciate his intentions here. Had he been more sensitive, I think that would only create more questions. @Danny Knowles did a great job representing how most people are framing questions on the topic of treasury companies. Somebody had to go to bat and that’s the price for great content. Great pod and conversation. Thank you @Danny Knowles
I'm about 1/2 way through and it's a good episode so far. It appears Michael gets a bit defensive about the Bitcoin Treasury topic, but I'm not sure he truly understood your question. I took your question to be: does it make sense for a company that's not profitable and loosing money to be adding Bitcoin to their balance sheet. I think this is a fair question. It appears Michael heard this as an attack on companies adding Bitcoin to their balance sheet. I'm looking forward to listening to the the second 1/2!
You are the big brother that takes the punishment when ALL the kids were acting up. Hard to watch but even harder to actually see the point. We need to take ourselves seriously again and stop virtue signal at what we perceive as the right way to Bitcoin. Too much division lately and we are floundering. We should let DATs or TCs or whatever we are calling them off the hook. We need our friend David Baily back in the ear of those that need our votes for midterms and guarantee Samourai dev Freedom and Self Custody Rights as law. Its our last bargaining chip to play before a possible return to advesarial governance.
Danny and Saylor’s perspectives are both valuable here. Saylor is right that Bitcoiners do too much infighting among ourselves. And that companies are better off saving in Bitcoin than sticking to fiat assets. Danny is right that most plebs are better off buying Bitcoin than betting on the latest Bitcoin treasury co. It’s one thing to have a sizable cold storage stack and dabble a bit in minor treasury company plays. It’s quite another to hold no real corn and leave your fate to these management teams. One is the corporate perspective, the other is the individual perspective. View quoted note β†’
Great job Danny! Companies and individuals should strive to be productive. This is the part Saylor ignores. Selling debt to buy bitcoin is not productive. It’s obvious when taken to the extreme in a world where all companies just issue debt and buy bitcoin. It’s absurd. Yet if all companies strive to be productive in their own way then that makes sense. All treasury companies are garbage. Basically scams where insiders use their influence to acquire more bitcoin than they could otherwise do personally. Saylor pretends that these are real businesses trying to be productive and simply buying bitcoin. They aren’t and he knows it. Strategy’s preferreds do add value to the marketplace so let’s call them the exception.
↩ replying to MrTea
How is it fraud? They lay out their thesis pretty clearly. Once a company has a stack of bitcoin they have different operating models they can move to. Strategy moved to the preferred market because they think they can offer higher yield while being way more collateralized than the standard offerings and therefore out compete the market. So far this thesis is playing out. I don’t own anything besides bitcoin and some stupid shit in my limited 401k for my fiat job, but I don’t begrudge companies from trying to build a treasury of bitcoin.
↩ replying to ihsotas
It probably isn’t fraud by the legal definition. It’s more like a shitcoin. I’m of the belief that companies should do something productive. Eventually they have to or will fail. My issue with most treasury companies is I don’t believe they actually are trying to do anything productive. I suppose they could so I can’t disagree with you on that. I think they’re all engaged in this ledge Ponzi scheme where they want you to buy equity in their company that does nothing and never will. Since they disclose that it’s not legal fraud. But it’s still a misallocation of capital which I can’t support. They should strive to do something productive with their time as we all should. Hodling bitcoin isn’t productive. Saylor knows this because he could use one of his own absurd analogies to deduce it
↩ replying to MrTea
Saylor views most of the S&P and misallocated capital and fraudulent. His point is that most companies are shit, so why not at least be shit with Bitcoin on your balance sheet? I’m a self custody maximalist, but I find the STRC product helpful in that I can keep some funds in essentially a stable coin earning yield. This product wouldn’t exist without a company deciding to accrue Bitcoin. Strategies initial plan was to try to beat stacking sats by accessing deeper credit markets and that worked out pretty well but had a limited shelf life. I think offering a high yield savings account is going to drive a lot of profit and will put strategy into a new class of company over the next 5 years. There is of course going to be the pure grifters looking to take your bitcoin, but I think in general there are ideas being generated that will only be possible for companies with a large stack of bitcoin. Now is the time to get that large stack.
Saylor's answers were all thorough and insightful, just overly aggressive in some cases. I don't think his poor humour in this interview was because he's a shill or has a massive ego, rather a result of him being pissed off for a variety of reasons. He could have kept that in check better. Great work Danny, keep up the great work!
This is awesome and #bitcoin needed this. Reminds me of the old days when we didn’t give a flying shit about the rich and how they play their games. We chose Bitcoin not only to opt out but as revolution, a protest against money printing. Hell yes some have increased their wealth substantially, but don’t let that change you! Turn back on some Rage Against The Machine and β€œFuck you I won’t do what you tell me!”
Saylor seems to be intentionally missing your point Danny. He's saying, all else equal, it's better for a company to have vs. not have Bitcoin (fine, agreed). But your challenge was whether it makes sense that there are so many companies who's only business model is to buy bitcoin when people could just be acquiring actual Bitcoin themselves, and those companies can't get the same leverage/liquidity as MSTR. Totally fair question he could have just tried to answer since, if anything, it could be interpreted as a compliment to Strategy.
↩ replying to Bud
Except they will likely have to sell it back, and some already have to buyback stocks and payoff debt. This can actually cause more downward price pressure. It takes a company say 2 years to buy 5,000 Bitcoin. Positive price pressure for 2 years, but barely noticed in markets. Then boom, suddenly their stock tanks, no positive cash flow, no more equity investors, done. Must sell the Bitcoin,mostly all at once or at least rapidly to cover. Much larger downward price pressure than ever hallened upwards. It's stupid to just buy Bitcoin and keep it on your balance sheet with no cash flow. It's worse for people to invest in this crap.
↩ replying to Bud
1. If they become forced sellers because they're not true hodlers but just grifters trying to get a management fee while the going is good. It's fiat behaviour that gets associated with Bitcoin. 2. All these companies are probably storing their Bitcoin with the same custodian, and they're all much more vulnerable to regulatory risk than an individual. This is added centralisation risk. You can't stop it, but these are fair criticisms. Danny wasn't pushing back on businesses using Bitcoin as a tool - i.e. better cash vehicle while they create value in their chosen markets. He was pushing back against companies doing this as their only activity. Saylor was being a dick - he's smart enought to know the nuanced difference.
I listened. I like your show, but you started the debate by saying, β€œI’ve been critical of Bitcoin treasury companies,” and then spent the rest of the show on your heels saying, β€œI’m not being critical of Bitcoin treasury companies.” Saylor is exactly right on every point he makes. Anyone and any entity who buys Bitcoin helps everyone else who owns Bitcoin, and is to be celebrated. This episode will be a service if it ends this particular form of Bitcoin FUD, because Michael Saylor demolished it. Thanks for your show.
According to Saylor self custody is worth less than 1% of bitcoin's value proposition -- that's the important point for me, as I strongly disagree! Without self custody can be coerced and controlled like everything else. He's a bitcoiner who doesn't consider self custody important, and he's saying that he agrees "99%" with bitcoiners who do, and should not focus on little differences. Self custody is a huge one, bro! He made some points, but he pretends not to understand that: - there is a difference between a regular company buying bitcoin from its operational treasury vs. a "treasury" company buying bitcoin with debt raised from others - there are many entities that can buy bitcoin directly - self custody is important View quoted note β†’
You did well Danny, definitely sone cringe moments - I got the impression he was in a bad mood and was exercising some frustrations. He really could have controlled his temper and been a more humble guest on your podcast... Even if he disagrees with the framing of your questions he didn't need to be quite so scathing, he just came off like a irritable twat at moments. Good on you for keeping your cool
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This was really good! I am sure Danny can take the heat and he handled it so well. He was asking exactly what most people think and Saylor did his usual thing. Talks like these provoke thoughts and introduce new perspectives. I wish there were more episodes like this on all podcasts. Bravo.