BTC Macro, MSTR Outlook, Ex-Fed Insider on Bitcoin | BMTV Oct. 05, 2026

Good morning and happy Monday. Welcome into BMTV. I'm Grace Armington with Sean Hagan. The macro picture is front and center today with the four-decade bull market in bonds facing a major reversal, Sean, and oil adding to the pressure. Absolutely. You know, the macro environment's getting more convoluted and confusing by the day with all those moving parts. But one thing's becoming increasingly clear is that there's no stopping this train. Yep. We got one of the best breaking it down with us in just a few minutes. Lynn Eldon, founder of Lynn Eldon Investment Strategy. Also joining us on the show today, Ryan Van Graak, vice chairman of Coinbase. Jen Meyer, CEO of St. Cloud Financial Credit Union. Dan Kohler, president and founder of ASIC Plug. Charlene Fadirepo, former Fed regulator. And Lance Vitanza, managing director and senior analyst at TD Cohen. But with that, let's get into the headlines. CME Group has suspended plans to launch a 10-barrel crude oil futures contract that would trade around the clock. The exchange says industry participants raised concerns that 24-7 energy trading could introduce additional market risks without further review. CME had designed the product as a regulated alternative to round-the-clock oil contracts on other venues and is calling on the CFTC to ensure consistent standards. The euro fell to a 17-month low against the dollar this morning as concerns over France's budget deficit and last week's bond sell-off raised fears of renewed debt trouble in the eurozone. The Fed's more hawkish stance added support to the dollar, while political uncertainty ahead of France's 2027 election weighed on confidence in its finances. Saudi Aramco CEO Amin Nasser says rebuilding global oil and fuel stockpiles could take up to two years. He estimates refilling those reserves would add two million barrels a day to demand over the next 18 months. The Fed also says the U.S. and United States are expected to close the Strait of Hormuz following the start of the U.S.-Israeli war on Iran. Japanese Bitcoin treasury firm Metaplanet added a net 1,000 Bitcoin in the third quarter, bringing its total holdings to 44,000 as of September 30. The company sold 10,000 Bitcoin and purchased 11,000 during the quarter. Metaplanet says the sale and repurchase demonstrated its ability to turn Bitcoin into cash, aiming to strengthen lender confidence and expand access to financing. Bitcoin's rally toward $86K reflects renewed demand for a hedge against currency debasement, according to Capital.com's Kyle Rhoda. Rhoda links the move to Scott Besson's intervention in treasury markets, arguing investors are turning to Bitcoin for protection against expansive U.S. policy and to diversify their portfolios. Rhoda says the outlook is improving and the cycle lows may already be behind us. Strive CEO Matt Cole and I will see you next week. The company has purchased 2,000 Bitcoin for $169 million, bringing its holdings to over 29,000 Bitcoin. Michael Saylor's strategy added 334 Bitcoin last week and repurchased $176 million of Stretch, its preferred stock, with its total Bitcoin holdings now at 848,000 Bitcoin. Strategy also reporting a $21 billion gain on digital assets in the third quarter. And with that, let's go to the live show. Live markets today are a live Bitcoin price brought to you by Cash App, sitting just under $86K this morning. But of course, the number to watch always, as of recent, is that 10-year treasury yield, remaining near multi-decade highs, despite Friday's weaker jobs report taking some pressure off the Fed. But that 10-year yield sitting at 5.26, down two basis points this morning, the 30-year yield sitting at 5.62. Meanwhile, not much changing in the stock futures. The S&P roughly flat, with the Nasdaq also hovering near the flat line after hitting a record high on Friday. The SPY down 12 basis points since opening at 769.64. The triple Q is down two-tenths of a percentage point at 749.58. Gold catching a bid here. It is up to $4,150, up a quarter of a percentage point on the day. Another asset to watch as swaying higher yields against growing fiscal concerns. And finally, oil, WTI, back around $90 a barrel, down around 1% this morning. And Brent remains just slightly over 100, Sean. Yeah. You know, the market seems to be not as knee-jerky right now. You know, a little bit of stabilization in a couple of places. But I'm not sure how long that's going to last. Obviously, there's a bit of turmoil, confusion. A lot of this is kind of back and forth. Some assets even, you know, maybe you should open longs or shorts, depending on what's tweeted. So very news-driven. But underneath a lot of it is this kind of systematic risk being priced into the market. Yeah. Sometimes can be very reactive out there. So that's what the markets are doing this morning. But let's go bigger picture now. At Bitcoin 2025, Lynn Alden described the U.S. long-term fiscal outlook with a phrase that's since taken on a life of its own. Nothing stops this train. Let's take a listen. There's two main reasons why nothing stops this train. One is math. The way that they've constructed the Ponzi system that I've talked about before, the way that it has to always continue growing to ever not start deleveraging in the crazy way that it would. So that's the system that they've built. And two, the second reason is human nature. None of us want to pay higher taxes. People that are on the receiving side of debt are going to have to pay higher taxes. The receiving side of deficits never want to cut them. Virtually no politician has ever incentivized enough to actually cut deficits during their term. And basically, this represents a flexible ledger. This is the ledger that we all kind of work with in the U.S. and globally. And because it's a flexible ledger, they can always create more units. And therefore, that's the error correction that they keep falling back on over and over again. And that's what contrasts with Bitcoin. Bitcoin is, you know, the complete opposite of Bitcoin. It's the same thing. It's the same thing. It's the same thing. It's the complete opposite of this system in many ways. It's the mirror of the system. Instead of ever increasing units, and indeed ever increasing units that can't even slow down, Bitcoin is absolute scarcity. And instead of opaqueness, it's transparent. And instead of the error correction being able to just print more units, the error correction that happens in Bitcoin is deleveraging can happen, but you can never go after the unit itself. So basically, nothing stops this train. For the next 10 years, we're going to be running, very large fiscal deficits in the U.S., almost regardless of what else happens. There are certain things that can accelerate it a lot. There are certain things that can maybe decelerate it a little bit. Nothing meaningfully. And so the one way to protect yourself from that situation is to own the highest quality scarce assets. And of course, the one we all like here is Bitcoin. Thank you. It's one of the most watched talks in Bitcoin conference history. And Lin Alden joins us now, founder of Lin Alden Investment Strategy. Welcome in, Lin. Happy to be here. Thanks for having me. Yes. Thanks for joining us. So you're famous for the saying, nothing stops this train. For people who somehow aren't familiar with that yet, what is the train? Why can't it stop? And what do you make of the trajectory for its acceleration? So yeah, the train is fiscal deficits, particularly in the U.S. It's originally a reference to Breaking Bad. Basically, it's a train that's going to be in the U.S. and it's going to be in the U.S. Basically, the inability or the unwillingness to stop in this reapplied here. And basically, it's a combination of a couple of things. One is high degrees of political polarization in the U.S. It's very hard to get any sort of meaningful change through. And then the other part is mostly demographics and just decades of accumulated decisions. We've built these entitlement structures that kind of assume that every generation is going to be bigger than the prior one. And now, of course, we have pretty top heavy demographics. We have 40 years of declining interest rates. We have 40 years of declining interest rates that were offsetting ever higher debt loads. But now that we're over 100% of debt to GDP and interest rates, they bounced off zero. They're not falling anymore. Means that interest expense is now really a substantial component of the deficit. So even kind of decisions to trim things here and there have trouble affecting the bigger picture. And so a lot of this is locked in. And it's a macro variable for investors. It's a macro. It matters for obviously politics. It matters for just day to day. It matters for the economy. It matters for just day to day living. But from my perspective, mainly what I do is it's focusing on the investment implications. And, you know, under fiscal dominance, the government spending, you know, it can work against the Fed's efforts to control inflation. What can actually bring prices under control if Washington won't cut the spending? Not a ton. I mean, that's so the kind of the definition of fiscal dominance compared to monetary dominance is that the central bank is kind of in the backseat here. Their tools are primarily based on the money. They're not based on the money. They're based around accelerating or decelerating bank lending, which works when, you know, unusually high rates of bank lending are a major driving force of inflation, like what we saw in the 70s, for example. That's why that particular cure fit that particular problem. But when the government's running 7 percent of GDP deficits and when they have so much accumulated debt that higher interest rates blow out the fiscal deficit more so than they slow down bank lending, their tools just become less effective. It's not that they have no impact, but the impact ends up being mixed compared to just a clean kind of anti-inflation. medicine that it once was when debt levels were lower. So, you know, things like getting oil flowing, you know, can help, you know, get the cost of things down or at least, you know, going up more slowly, you know, trimming parts of the deficit where possible can sometimes address it. But because it's so locked in, it's really not going to stop anytime soon. And kind of part of it is that when a country gets this indebted, it's going to default one way or another. And when they control the units for their own liability, that default is primarily through purchasing power rather than nominally. And so kind of like some degree of inflation into the basin ends up being inevitable because they let debt get to this stage where it's at now. And, you know, you brought up the 70s and, you know, policy of the past kind of makes me think of kind of maybe through the 90s with the IT boom and Besant kind of comparing himself to that. And the AI plays a huge part of that, kind of the core of that. And we see figures like Elon Musk saying we're entering this age of abundance and kind of the popular belief in Silicon Valley seems to be that we're going to have this extreme price deflation. But oftentimes, I think that might be conflated with, you know, monetary or price deflation, sometimes conflated with monetary deflation. You're someone who's thought about this for a long time. And could you help us maybe kind of tease out those differences there and maybe where those differences are going to happen? And maybe where they might be being conflated and where you think the limits of what this AI build out might be able to actually help us solve for? Yeah, absolutely. So one is that also the 90s, in addition to the tech boom, that was also the demographics boom. So peak demographics in the US, meaning kind of like maximum labor force participation was in like 1999 or 2000, right near the peak as well. So that was like multiple factors coming together to create that environment. But focusing on AI as a whole, basically, inflation is a spectrum. So you know, one hand, you have things that are pretty truly scarce, you know, fine art, waterfront property, Bitcoin, then you have things that are like a little bit less scarce, but still quite scarce, like gold, you know, you can make it you can make more of it slowly. You know, high quality houses, energy to a certain extent, you know, they're labor intensive, they're physically constraining in various ways. And then you move across the spectrum, you get the things like grains, textiles, manufactured goods, semiconductors, you know, with the with the, you know, multi decade trend of Moore's law, obviously, sometimes you have near term semiconductor bottlenecks, you know, offshored goods. And over the past several decades, obviously, automation, information technology, offshoring has made us radically better at making a lot of those things, it's easier to make a t shirt or a plastic toy now than it was, you know, 30 years ago. And so that's helped that that long end of kind of abundant things stay cheap, even in the even in face of money printing. And so a lot of the price gains were concentrated in the scarce side of the curve. What AI does is basically targets another side instead of kind of suppressing, you know, blue collar wages and making our manufactured goods more abundant. AI comes in and makes a lot of white collar services just radically more abundant, you know, it costs way less to translate something or edit something, or create, you know, a poster or something like think like there's multiple things that just are way cheaper and more abundant now because of AI. And, you know, ongoing improvement. there and Moore's Law and everything will keep kind of bringing that down to some pretty low level. And so you're, you're you get a it is true that if that technology continues to take off, as many of us expect it will, it'll be a deflationary force on those categories. But it doesn't mean that it slows down money printing. And it doesn't mean that it radically reduces the cost of things in the physical world, or things are just very scarce. And so that those are the assets you want to be long, even as often as possible, you know, you can't do that. And so you can't, you know, even as often as possible, you know, you can't do that. And so you can't do that. And so you can't Other parts do get suppressed. And also, obviously, the more abundance there is, the less we feel inflation. So inflation is still happening in the monetary sense. And how much it impacts the average person will largely depend on abundance. If you have negative abundance, so you have war or you have bottlenecks or constraints or technology stagnation, you feel that money printing more. Whereas if you have some sort of offset, then you generally feel that a little bit less, even though it's still showing up in the scarce end of the goods and services curve. So obviously, high interest rates make America's debt more expensive to finance, but cutting the rates could add to inflation. So what would force the Fed to step in and support the government debt market? And what does that mean for Bitcoin? Well, any sort of acute illiquidity would make the Fed step in. So right now, the bond market, despite yields going up, has not become truly disorderly. It's still a market that's able to be made. Obviously, volatility is higher, but liquidity is still fine. If you have events that are similar to the 2022 UK gilt crisis, so the Bank of England had to cancel a speech about balance sheet reduction and instead do emergency temporary QE to fix their bond market in kind of one of the greatest ironies. And the Fed, in March 2020, during the peak of the COVID lockdown crash, it got so bad, the treasury markets went just illiquid. Just the off-the-run securities literally just kind of broke. And that's where the Fed had to come in and to start buying, you know, with emergency meetings, start buying hundreds of billions of dollars, eventually trillions of bonds. And so, you know, around the margins, if it does get illiquid at some point and just starts to generally break, the Fed has to basically step in. I mean, they can try not to, but then all their other mandates start breaking apart. So there's softer ways they can do. I mean, they have standing facilities ready to provide liquidity. They can potentially ease bank regulations to let banks be able to buy more treasuries, kind of increasing their leverage. Or they can step in and buy them directly. Obviously, that's hard to do narrative-wise, you know, when inflation is above target. So that's kind of one of the hallmarks of later state fiscal dominance is the Fed finding itself increasing its balance sheet despite above target inflation. And even right now, even as they're increasing, they actually still are mildly increasing their balance sheet. They're not buying the long end, but they're still doing this very gradual QE as part of just their view of maintaining ample bank reserves and avoiding some of the liquidity problems that they faced late last year. So gold remains about a quarter below its record intraday high from January. What is your outlook for gold right now? Are you buying more or holding what you have? And why own gold in addition to holding Bitcoin? So I'm a holder here. I've been a long term. I'm a full on both gold and Bitcoin. And, you know, they go up and down at different times, just part of a kind of a balanced portfolio. They kind of serve different purposes for different types of tail risks. You know, I was a lot more bullish on gold. It was like 2000 or less compared to when it briefly touched, as you point out, the intraday's high, somewhere around 5000, corrected down to like 4000 or so. I generally think 4000 is a very reasonable number for gold to be at. Longer term, I'm still bullish on it, but I think it still has some consolidation to do after just how big of a run it did in recent years. And basically, it's a scarce physical asset. It has certain advantages over Bitcoin, has many disadvantages over Bitcoin. It's obviously less mobile. It has less true scarcity and, you know, other divisibility or auditing limitations to it. There are certain segments of the population that like it. There's a, you know, there's a physicality. I think that especially in the world of AI is interesting to people. So I just view it as one of the leading monies out there, one of the leading kind of liquid, you know, bear asset store of value alongside Bitcoin. And, you know, you mentioned that gold and Bitcoin often move separately, even though we're seeing the highest correlation between the two, they still are not on the same page, it seems. And many analysts would have expected Bitcoin to trade down similar to gold with these rising treasury yields. Why do you think Bitcoin may be acting different in this kind of macro environment than other kind of long duration scarce assets like gold? And what do you think would need to happen to sort of drive a move back towards those previous all time highs over 100K? It's a good question. I mean, one is that Bitcoin is a smaller market than gold by about, you know, an order of magnitude and it's more volatile. So it has a somewhat different holder profile. I mean, you know, gold's more held by sovereigns, more held by older investors. It's partially held in the form of jewelry, whereas, you know, Bitcoin is on average could be held. Obviously, there's a lot of institutional holders. There's some sovereign holders on average. The ownership, the retail ownership profile will skew a little bit younger than gold is considered a little bit more risk on in some in some capacity, at least in a portfolio sense. And so this the pricing just kind of works differently. Sometimes they go up, sometimes they go down together and in general fiscal dominance. And so, you know, if you're looking at, you know, the price of a stock, if you're looking at, you know, the price of a share, you're looking at the price of a share, you're looking at the price of a share. Um, uh, and I think it's a combination of liquidity. Uh, I think it's a combination of just, um, you know, the, The chart has come in. First, they saw that, you know, Bitcoin's not going down anymore. So they start to get in. If it starts to build up some momentum, then momentum traders come in. And so, you know, a lot already, like a lot of the fast money's out. It's strongly held. And eventually there are things that can attract fast money back. But I think that the longer term backdrop is just that money supplies around the world are going to keep growing. The bond markets around the world are going to keep growing. Nothing stops those trains. And so there are this kind of like background pressure, this rising tide for the best quality assets, even though just like a rising tide, you have waves that come in and out. So you get, you know, surges in corrections, but you still want to own the highest quality, scarce things. And, you know, obviously Bitcoin is among the best. So we hit on how AI impacts the macro picture earlier. And I know you've talked before about how a peak in AI stocks could boost Bitcoin. What would cause money to rotate out of AI stocks and back into Bitcoin rather than cash or a safer investment? So partially it's a view on a risk on situation. So obviously cash is protective, whereas someone, you know, buying Bitcoin that they perceive as being kind of near the lows and expecting that it could give another multi-year run. So it's often just a counter cyclical approach. People saying, OK, I, you know, I made huge gains on AI. You know, at a certain point, the companies become multi-trillion dollar companies and it's hard for them to keep multiplying and get the same kind of percentage returns that they could when they were smaller. And so when they see Bitcoin, you know, it's sub two trillion market cap and generally, you know, not a ton of fast money in it. There's not traders just like, you know, leveraging, leveraging to the gills on Bitcoin in a similar way that they were kind of ran stocks, for example, during the peak memory, memory stocks. And so it just it just becomes a. Different risk on asset or a different kind of volatile, you know, tech adjacent asset that some investors will find interesting and just be interesting getting into in the counter cyclical sense to be in a less crowded trade. Now, you know, spending time in Egypt means you've experienced firsthand very different monetary systems from the U.S. Has living between the two countries changed the way you think about kind of this broader picture at all? I think it just gives me more more hands on experience. I've been going to Egypt every year since 2019. I live generally for months each year there. I mean, like this currently official inflation, there's 15 percent and no one's talking about it because that's just that's normal. Like, that's the background. You're kind of like how in the U.S. if inflation is two or three percent, not a ton of people are talking about it. That's like 15 percent, 10 to 15 percent in Egypt. And so, I mean, it's you don't have to convince an Egyptian why a store of value is good. You just. Have to maybe sometimes discuss which which stores value. And it's because when you're in a country that doesn't have a robust stock market like the U.S. does for Egyptians, it's generally gold in real estate or even, ironically, dollars. There's some Bitcoin interest, not not a ton on a per capita basis. But basically, like emerging markets in general will generally provide a somewhat more extreme environment of broken money. And so I think that having some experience in both developed and developing. Markets gives someone a kind of a broader perspective on the different ledgers that we have around the world. Lynn, I wanted to get your thoughts on stable coins, because obviously it makes dollars easier to access and move around the world. But does it actually strengthen the dollar? Are stable coins just moving existing dollar demand onto new rails or is it creating new demand? Yeah, it's a good question. I think it's creating some new demand. But that overall demand is. Relatively small compared to existing total demand. And so the effect of strengthening or solidifying the dollar is kind of marginal. There is a report by Citi maybe a year ago or so that kind of looked out a stable coins through 2030 and had like a bull base in their case. I think it's a it was a reasonable report and they they categorize different sources of demand. And some of those, as you point out, are basically existing demand for dollars that is like repurposed. Or some percentage repurposed. And other times it is generally new demand for dollars. Basically, if stable coins can get to places that otherwise physical dollars or bank accounts would have trouble getting, then that can that can represent new demand around the margins. Or if it can solve cross-border payment problems in a way that weren't happening before, it can make various small businesses and things like that hold marginal stable coin balances that they might not have otherwise held in dollars or dollar assets. But, you know, we're talking about a very large monetary base and we're talking about, you know, hundreds of billions of potential demand in the coming years, of which some percentage is new. So these are these are macro scale numbers, but they're not really game changing numbers compared to, you know, two trillion in annual deficits. You know, the existing stock and rate of money supply growth that we currently have. Now, Lynn, we're almost out of time, but I got to ask before you go your thoughts on Japanese yen intervention. Of course, and Scott Besson's comments on being the house and his latest comments clarifying that what he means is that he has this edge. Do you believe Scott Besson does have an edge intervening in this market here? I mean, I think he has an edge. The question is how big of an edge. Basically, between the U.S. and Japan, Iran, actually, especially Japan, but if they're working together, they've got a ton of firepower. You know, Japan is well over a trillion. You know, Japan is well over a trillion dollars worth of reserves. They also, as like a kind of a nuclear option, have their their their giant pension system and they can choose to repatriate some of that to sell some foreign assets and to buy domestic assets. Basically, Japan, even though they have a very high public debt, they've got a very positive net international investment position for their other assets. They've got a current account surplus of basic dividends and interest flowing to them from around the world from all these investments. And so they actually have a ton of firepower. To protect the yen, should they want to. So far, they've been, you know, they when it when it starts to get disorderly weakening, they come in and they they do a jolt to kind of break those that are shorting it on leverage. You know, they kind of slow that down. And I mean, they can keep running that playbook over and over and over for years. It's mostly a choice of how large they do it. And when both Japan and the U.S. generally find that there's a certain line in the sand that they prefer to protect, they could choose to protect that pretty aggressively. You know, not not forever, but the amount of firepower they have to do it is pretty immense. So I wouldn't I wouldn't be too aggressively trading against it. And instead, I mean, I'm long Japanese assets that are not the yen because, I mean, Japanese corporations are structurally short the yen in general. You know, and so, you know, there's this I'm pretty bullish on Japan, even though I'm not particularly a yen bull. I think it's more of a consolidation now with a lot of firepower to kind of. Overmanage it. The one and only Lynn Alden, thanks for joining us. Thank you. All right, let's keep the discussion going on this topic. The recent route in treasuries has the 10 year back at levels we haven't seen since 2002. And it's raising a much bigger question. Is the 40 year bull market in bonds that long ride down from the Volcker era finally over? So, Sean, take us back to where this started, because if you bought bonds in the early 80s and rode interest rates all the way down from there, this was an. Incredible run. Yeah, absolutely. Look, the bond bull market, unfortunately, though, is over. We wrote it down from the Volcker era and we had this good 40 year run. Unfortunately, I wasn't alive for most of it to participate. But now we're seeing a pretty strong reversal. And these these reversals tend to be structural and last some time. You know, in theory, obviously, if a country is run efficiently, you kind of just see it. Always kind of trend down into the right or at least kind of normalize. But we know that the administration's change, policy change, you know, fiscal conservatism changes. And so, you know, right now it looks like we're entering a pretty strong up channel here. Now, you might expect the higher borrowing costs today to force governments to tighten their belts, but not so. You look at the headlines this week, Sean. President Trump is promising five thousand dollar checks to all adults. If Republicans keep. Congress and in Canada, you have Prime Minister Mark Carney promoting another direct payment for groceries and essentials. So the price of borrowing has changed. Why hasn't the political incentive to spend? Because the political incentive is to be reelected. I guess that's that's the simple answer. Look, you know, this is kind of a modern monetary theory. And, you know, Keynesian banking plus, you know, the incentive to. Just win the next election, kind of all thrown into a pot. And this is what you get. You know, we're becoming increasingly populist as a society, you know, both both ends of the spectrum, both major political parties in the US, but all around the world. You know, you have a rise of populism and you have kind of a low willingness to be measured with monetary policy. And so that kind of turns into a tool. And so your finance system gets intertwined more and more. And this is kind of where we end up. And we're already getting a real time example. Of what happens when fiscal concerns collide with a much tougher bond market. I mean, just look at France, and you can see it on the screen here. Its 10-year borrowing cost has gone from around zero just a few years ago to near 5% today. So at what point does a move like this become a fiscal problem in and of itself? Yeah, I mean, France's public spending as a percent of its GDP is becoming a concern. And, you know, public spending is 57% of GDP. Western democracies are getting really heavy-handed with their spending. You know, whether it's, you know, NATO and the EU being concerned with war and expansionism, whether it's just, you know, trade, whether it's trying to, you know, boost GDP, whatever it is, you know, it's a combination of things. We're just spending more and more money that we don't have. And so France is an example of where there kind of isn't really just one major catalyst you can point to and say that was the time, but it's just this kind of systematic. Loss of this erosion of trust over time due to this kind of continuation for willingness to continue to kind of boost that debt to GDP and just spend money that they don't have. Yeah. And if we're making France the warning here, there's already been a cautionary tale. And Lynn Eldon just alluded to it to rewind to Britain in 2022. The conservative trust government announces a major fiscal package bond sell off yield spike. And suddenly a move in the bond market starts breaking things. Walk us through what happened. Yeah. So this is this is a moment where it's not like France. It's it's hey, this was a mismanagement. You can specifically point to, you know, and it's really twofold. There's a primary and then a secondary mechanism that that kicked in, you know, trust is September 2022 tax cut announcement, you know, caused real concerns in the bond market. It spooked investors, you know, tax receipts obviously flow into treasuries. And so if you're cutting. Those tax receipts, what money are you going to use to pay the bonds? And, you know, presumably you're going to have to inflate the monetary supply to pay those bondholders if you pay them. And so it spooked investors and guilt prices tanks and tanked and yield soared. And then it causes this chain reaction where pension funds were basically using this sort of levered strategy and they had to collateralize as as these yields spiked. And so it just kind of added accelerant to the fire. And that's when it kind of turned into this more vicious cycle that you see with that really sharp spike on on the chart. And then obviously you can't kind of just let this run away, of course. And so what do we love in the West is bailouts. And so the Bank of England bought nineteen point three billion pounds of gilts, breaking that spiral and kind of crushing it and bringing that down and kind of being used as like a pressure escape valve. So I think it's an important lesson to learn. You know, we're already maybe. Going the way of France a little bit or a lot, depending on who you ask. And and and now, you know, as we enter election cycles, we're wanting to give out more stimulus and more money, which, you know, and cut tax receipts, which, of course, may lead us down the path of risking a guilt like crisis. Yeah, well, and in England's case, it wasn't just the government having to pay more to borrow was the speed of the move that actually threw. It was the government having to pay more to borrow was the speed of the move that actually threw. Financial stability. Yeah, one hundred percent. You know, it's it's it's something you want to avoid any kind of gross mismanagement like that as a specific catalyst. But, you know, it's more of a cautionary tale. I don't think we're quite there yet, but, you know, something just to to be aware of, you know, you always think that here it's like, you know, yeah, you know, I understand the frog boiling water. I understand things are kind of getting progressively worse. But, you know, there's not going to be kind of this one moment crisis. You almost kind of feel impervious to it. Because, you know, maybe a lot of folks here haven't lived through something like that or at least not knowingly. And so it's just a healthy reminder that that things can go wrong. There can be mismanagement that kind of causes this short term flash. Yeah. Ultimately, Liz Truss was out with speed to just forty nine days as prime minister. So there's a pretty big lesson here. Governments can't ignore the bond market or can't ignore it until they can't. But let's bring it back home now, because U.S. midterms are about four weeks away now. And who controls? Congress obviously changes tax policy, spending priorities, future deficits. But, Sean, does it actually matter who wins? You know, I not not really. You know, obviously, some sides are on the fiscal policy side of things. It doesn't really seem to matter. It seems to be that that no matter who's in office, we just keep blowing out our our deficit and we just can't seem to get spending under control. Yeah. And we actually just got. News overnight internationally just how quickly things can change, because Brazil is showing us that an election can reprice the market. Their equity markets surged overnight 10 percent, I think, after conservative candidate Flavio Bolsonaro's surprise first place finish. It now forces a runoff vote for the presidency. So clearly markets have a political preference. Do you think this could head this could happen with U.S. midterms as Wall Street favoring one party here or you think it's more complicated than that? I think it's more complicated than that. I think that generally they favor the conservative movement just because it tends to be pro growth, business, lower tax. You know, they're, you know, more aligned with the data center build out, for example. So, you know, historically, a kind of a or at least in recent history, a more kind of pro industry, pro growth, pro. Free market capitalism party. And so, yeah, at least in kind of relatively modern political history, Wall Street, I would say certainly skews that direction. All right. And in the meantime, Washington is writing crypto rules without Congress and Coinbase just won approval to run its own clearinghouse here to break it down further. Coinbase Vice Chair Brian Van Graak. Good morning, Ryan. Good morning. Great to be with you today. Yeah. So Coinbase just won approval for its own. Clearinghouse, what does this unlock for Coinbase and the entire industry? Yeah, so very exciting about the recent CFTC approval. And with that, we now have the full set of derivatives, registrations, broker, exchange and clearinghouse. And by bringing it all in-house, we can provide a more streamlined experience for our customers, which ultimately means more access, more optionality, more choice for our customers. And ultimately, we hope the industry. Yeah. And that efficiency is going to be huge now that you can kind of create and settle these these fully collateralized contracts directly. You know, what does that mean for, you know, creative possibilities? What new regulated products do you envision Coinbase will be able to bring to the market here in the near term? So it opens it opens many doors that didn't currently exist. As you noted, sometimes when you don't have that full stack in-house, you have to rely on third parties which can create bottlenecks. And that's why Coinbase is so important. You know, Coinbase is so important to us. It's so important to us for approval and for innovation. And the key here is that innovation now is unbounded. We have that flexibility to figure out what our customers need, what is ultimately best for the market and aren't constrained by third parties and their view of the industry and what's best for our customers. And the SEC just issued some September guidance. I mean, they keep issuing crypto guidance, but, you know, the guidance isn't law. So how much can companies really build on it? And, you know, what happens when new leadership takes over? What would make that confidence last beyond the current SEC leadership? Well, it goes back to the Clarity Act discussion and debate, which is, you know, nothing is more durable than legislation. That's why it was the preferred means in terms of getting us regulatory clarity. But you can still accomplish a lot through rules and regulations and even guidance. It's absolutely true. Guidance can change from administration to administration. But the stickier that guidance, the more that the institutions adopt those practices and customers get accustomed to those capabilities. It's really hard to claw it back. So it's really important that the SEC and the CFTC continue to push out guidance and rule proposals. And it's equally important that the industry embraces those new opportunities and provide customers with more access and more optionality so that they can fully appreciate all that the industry brings. And part of those proposed rules are for how investment advisors and funds safeguard crypto assets. You know, from your perspective, what would change for an advisor who wants to help clients own Bitcoin directly, you know, rather than through an ETF, let's say? Or do you think ETFs are just becoming that default standard and kind of this extra regulation is more for fringe cases? For me, it's a question of both. Both and, not either or. It's about more optionality and more choice because more options is going to bring more access and more adoption of Bitcoin and other cryptocurrencies. And a key step in that direction, as you note, was this Ripple puzzle. And I want to double click on it for a minute because I spent nearly a decade in traditional finance. And I can tell you that institutional capital tends to flow where there are clearer rules. And historically, because we have lacked that regulatory clarity, we have some registered investment advisors and other institutions that have been reluctant to fully embrace new technology. and new asset classes. So what we see here with this proposal is another door opening. It's removing a regulatory hurdle that will have kind of inhibited some parties from participating. And I think it's important to recognize this is simply one of many, one of many recent proposals from the SEC and the CFTC, all of which should help institutions better understand the regulatory ecosystem and feel more comfortable participating and investing in this economy. Speaking of removing hurdles, it seems like the CFTC just removed one as well. Their September 24th update addressed how firms can use tokenized investments and the blockchain for record keeping. What does that do for someone like you and Coinbase? And what does the average customer get out of it? Tokenization represents the biggest upgrade to our financial systems since Wall Street moved from paper to electronic trading. There's nothing modern, about our current financial system where it takes days to settle transactions and the market shut down when people go home for dinner. Crypto and tokenization changed all of that. It allows parties to transact instantaneously, transparently, globally on a 24-7 basis with lower barriers to entry. And I want to flag here that this technology already exists. We at Coinbase deployed an international tokenization hub in Abu Dhabi, which is allowing billions of individuals to get access to the US capital markets for the first time. So the question is not whether tokenization is going to transform our financial system. It's a question of where. And we don't think US investors should be locked out of this innovation, which is why it's great that the CFTC has made their announcement. And the SEC similarly announced the innovation exception, which also gets at tokenization. And we think those are important first steps in opening this door for US investors. And tokenization could let people trade stocks and other assets around the clock. Even US equities, less barrier of entry globally for people to be trading. Presumably a lot of capital has the potential to flow into these markets. Besides just kind of driving deeper liquidity, I'd be really interested to hear your perspective as someone that was formerly at Citadel Securities and now Coinbase. What do you think the major lasting impacts on how these markets operate will be downstream from tokenization truly getting implemented? Well, one of the innovations for blockchain and crypto broadly, and you see it with tokenization, is eliminating unnecessary intermediaries. It is costly. So it's not just access and you're spot on, but it's also cost. It is difficult to have to jump through the intermediary hoops. And it's expensive to jump through those hoops in order to transact in the stock, in the bond market, and as you note, other real world assets like real estate aren't going to be far behind. So if you are an institution or maybe just as importantly, just an individual investor, the idea that you can not just access these markets, but you don't have to jump through those same intermediary hoops is a key innovation because no one believes our securities markets to operate as efficiently as they can be. And no one believes that a framework that was built a century ago is right for the 21st century. And that's why it's not just crypto companies like Coinbase that are embracing tokenization. You see traditional finance seeing where the puck is traveling, seeing that this is the future of finance and trying to partner with crypto companies in order to embrace what this is ultimately going to bring to billions of investors globally. Ryan, for someone who just holds Bitcoin, what is the biggest problem Washington still needs to fix? Wow, what a great question. There are many problems that Washington still needs to fix, and obviously they failed to pass the Clarity Act. I think it's less about fixing the problem now. It's more about accelerating the fix because what we are seeing through the SEC, the CFTC, and even with some legislative proposals with tax and strategic Bitcoin reserve is crypto has become one of the most bipartisan issues in Congress. And people seem to overlook that. But I just could remind your listeners, you had this Congress passed the Genius Act. You had 78 Democrats joining Republicans in the House to pass the House version of the Clarity Act. A crypto tax bill just passed another House committee by a vote of 38 to 5. Economic freedom and opportunity are not partisan concepts. Crypto is not and never should be a bipartisan concept. So I think what matters most is that we continue to build on this momentum and we continue to make sure that people understand the technology and recognize that these concepts, economic freedom, access, democratization of finance, those benefit everyone, whether you're a Democrat, a Republican, or an independent. And Ryan, on that topic of building momentum, Sean Agarwal was on last week, and he mentioned that Coinbase is working with advisors at six GSIBs to discuss increasing Bitcoin, exposure, and allocation there. Has the level of interest surprised you over the past, since the ETFs launched a year or so, two years maybe? Has it surprised you to the upside or the downside or maybe the scale at which these folks and institutions are wanting to get more skin in the game? Or do you think that it's kind of just going as many had planned? Well, as a company that's been a true believer, it's not a surprise when other finally come around to the realization that we have. What I think is, I wouldn't say surprising, but refreshing is over the last few weeks and months, including in the aftermath of the Clarity Act vote, you are seeing an acceleration of institutional adoption of partnerships and of innovation in the space from traditional finance. As you all know, crypto has always been about breaking down barriers. It's not about building them. It's about creating access, creating competition. And one of the things that we've been doing at Coinbase, is bypassing legacy roadblocks by partnering with innovative fintech firms and traditional finance so that they don't have to start from scratch, but we can provide a bridge from the fiat to crypto rails. And so we've recently announced partnerships with StableCore and Move, which is going to bring the digital asset infrastructure to thousands of small and local community banks. And just last week, we announced a partnership with Citi, which is also going to kind of turbocharge efforts in this space and bring digital asset and StableCoin infrastructure to their client base. So what I think is notable is not maybe that they were late to the party, but even with the defeat of the Clarity Act, you are seeing an acceleration of interest in this space because they are seeing what's happening with this administration, with these agencies, and they are seeing the momentum build to finally getting regulatory clarity in this space. Can you talk a little bit more about your partnership with Move? What's that look like for a customer at their local bank? Yeah, so one of the interesting parts of the Clarity Act debate was this idea that community banks were going to be harmed by crypto. In fact, crypto is the solution, not the problem, because small and community banks don't have the budget or the infrastructure to build some of these crypto and technological platforms that their larger bank siblings are able to do. What our Move partnership allows is for local and community banks to offer a broader suite of StableCoin and other infrastructure and abilities without having to build them themselves. It simply expands access and offering to their customers so that they can better compete with the larger banks who would necessarily have a capital advantage over them. Now, Ryan, there's still a lot of hostility in Washington towards this industry, unfortunately. If you had one opportunity to change the minds of this anti-crypto army, as they call themselves, about Bitcoin, what would you want them to understand? What do you think that gap still is? Is it just the result of lobbying or is there a kind of a true kind of conceptual gap? I do think I'm going to be optimistic here. I think it's a conceptual gap. For most people, when they take the time to bring an open mind and understand and learn about Bitcoin and blockchain technology, they tend to move in the right direction. That's why each successive Congress has been more pro-crypto and we're optimistic this next Congress is going to be more pro-crypto, regardless of who ultimately wins a majority of seats in the House or in the Senate. So I think education is a key part of it, but I also think there are important misunderstandings and I'll just give one. There's still a belief, for example, that crypto is a primary tool for illicit finance. But in fact, when you look at the statistics, you're far more likely to engage in illicit transactions using fiat currency than with cryptocurrency. In fact, cryptocurrency, as you all know, is uniquely visible and transparent and law enforcement uses cryptocurrency and the technology behind it to identify bad actors. But if you're not taking the time to look beneath the headline, the salacious headline, and understand the technology, sometimes you're quick to make a judgment. So we're optimistic that education, with more open minds, we will continue to penetrate and expand, you know, both adoption and appreciation for the technology. Ryan Van Graak, Vice Chairman at Coinbase. Really great stuff. Thanks so much for joining us today. Thanks. Take care. Tell us about Block, Sean. Well, you know, Bitcoin was introduced as peer-to-peer electronic cash, but for most people, it's still more familiar as something to hold than something to use. Cash app is an easy way to send money to family and friends. Buying Bitcoin there is the simple next step. From there, you can easily send Bitcoin, pay over Lightning at Square terminals, which we have here, and move Bitcoin into cold storage. All in one place, all in one family. Bitcoin at Block is building the full loop. 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The original Bitcoin-backed lender, no collateral losses, no rehypothecation since 2016. Get your exclusive offer at saltlending.com/bmtv. and their brokerage, right? What's the advantage of custodying their Bitcoin at their credit union? Well, I think there's a ton of advantage, right? ETF is more about price, right? You get to control price, but you're not actually owning the Bitcoin. We're not an omnibus solution. We've created a separate solution, which is our hybrid custody model. We call it the Midas hybrid custody model. That's the architecture that Deland has built. That's patent pending. And so just think of it this way. We have real Bitcoin per member in a multi-sig vault, right? So it's individual ownership. It's not omnibus. You actually are owning and storing it locally at your credit union. And right now your members have to buy Bitcoin on an exchange before moving it over to the vault. What do you think has to change for them to be able to buy it directly from the credit union? And who would that bring into the market that exchanges aren't reaching? Yeah, I think ultimately it'll bring Main Street into the market. And that's really what we've done. Wall Street's going to be fine, right? Wall Street's out there building and they're moving. We saw the opportunity to say, hey, who's going to build for Main Street? We've done that. We've been audited and examined by the NCUA, our regulator. I don't think there's a lot of places that can say that. But ultimately from a buy-sell, that's still coming. We're at a place now, especially with our legislation in Minnesota that we passed from a custody perspective. That's a great state model that we got through earlier this year. So yeah, I do think it opens up the market. And I think it opens up the market. And I think it's going to be great. Customer service, right? So if they have issues, they have someone to call. And that's really what I think our strongest play is, is to safe keep it locally, redeploy those assets locally, and then be your education and bridge and access point to those new money networks. So we will have buy-sell right in our at St. Cloud Financial through our core. Think of it this way. When you open up your online mobile wallet, what you will see is your insured checking accounts, NCUA insured. And then you'll see your Bitcoin vault sitting there right next to it and bridging those two things together. And you mentioned the regulation that got passed in Minnesota recently. There's a lot of maybe fog of war happening with all the regulatory conversations, right? I mean, St. Cloud built and launched your own stable coin pre-clarity. And one of the biggest things we heard about clarity was, you know, if this doesn't pass, it's going to really harm credit unions and regional banks. And so I think it's going to be a really big thing. And I think it's going to be a really big thing. I think it's going to be a really big thing. And kind of the smaller guys and that it's all going to kind of accelerate this roll-up trend happening. But you seem to be kind of a counter example to that. You know, what regulatory hurdles are actually real and exist and are prohibiting you from continuing to innovate versus what do you think might be a bit overstated? Well, I think the first thing is, is it was never really about law. So we built for the examination, right? Washington wasn't telling us to stop. They were telling us to prepare. And I think that's one of the things that we're going to have to do. And I think that's one of the mindset shift that I would ask Main Street, you know, CEOs or boards to think differently about of saying, you know, once everything's figured out, especially in the world where you have a decentralized ledger and payment ecosystems where a centralized ledger is not included, well, that's us. That's our main role here. So we should be paying attention. So establishing ourself as a local place to safekeep, redeploy those assets, and then be the access point to those money networks. Because if we have members who leave my institution in the future through incentivization or as this industry continues to mature, it's going to be very hard and expensive to get them back. Plus, by the way, I ultimately want to continue to serve my Gen Z members. So we built this from the inside out. We build it for our members, for our local community. From a regulatory perspective, we've worked with them for four and a half years, both the State Department of Commerce at the State of Minnesota, as well as the NCUA. And partnering with them through that process, we're all trying to figure this out as we go. There really wasn't ever an examiner who had ever seen Bitcoin. In a core, right, at a financial institution. So we've done that. We've let them come see it. So we took that examination maybe for everybody else. But our goal was never to be out ahead or be reckless. It was really to prepare for the future, work with our regulators, identify how to do this safely and securely. That really protects local FIs and local communities and Main Street financials. Main Street financials have been going away and consolidating for years, 30 years, actually, right? And so as you watch the numbers, there's a huge window. There's about 4,500 credit unions and 4,500 community banks left in the country. I think they're very, very important. As the world becomes more global, there's a ton of opportunity with that global. But if we can bridge that gap and keep those assets local while experiencing the globalization that we're experiencing in our economies, I think that's the best of both worlds. And that's really what we strove to build and what we've done. So we had your colleague Chase Larson on last week, and he was great. He told us you guys are holding over 20 Bitcoin for members. Is that the right number? Yes. Where do you see that number going over the next year? And what's been the response from your members? Well, it's been great. We've actually gone very slow here. We're not a large institution. So we really, again, built this from a safety and soundness. Our members have individual vaults. They ultimately have all of their keys are distributed. So we don't have full control over the Bitcoin. I know that's always the thing of, hey, someone's going to take it or bad actors. So the infrastructure is really, really sound in that way. And the hybrid custody model. So just seeing the response that we've seen now has been outstanding because we haven't tried yet. And we're still building out a lot of infrastructure from the Bitcoin Lightning that will be coming next year for our members. So I'd actually see probably 4Xing in our world without even trying. And as we build out the infrastructure and continue to learn, we'll crawl and then we'll walk and then we'll run. And I ultimately see it being a large deposit asset and liquidity for my institutions. And that's why we built a bridge that has the ability to plug into any DLT network. That gives me the agility to move where my consumers move, move at my pace, not depend on someone else's roadmap or a third party roadmap. I keep the liquidity inside my institution, inside my community. I keep the revenue inside my community and I keep the customer service and the relationship at my point of being number one for my members locally. And those are all important things. And so as the world continues to move, we'll watch regulation. We'll watch how merchants use and what actually establishes itself as a strong payment network for my members. And we'll have the ability to both plug into those networks and then build our product sets surrounding those plugging into those networks with safety and soundness and managing the volatility and all the other things that come with any product that we launch in financial services. Now, you know, you mentioned that you think Bitcoin will be around for a long time. What is it going to take for the credit union itself to own Bitcoin, not just your customers? Well, I think that does involve more legislative clarity, at least nationally, right? Clarity wherever that goes. And, you know, the big banks are still building. I think no matter what happened, I think we saw that on September 15th and the SEC is going to move forward as far as they can from the regulatory powers that they already have in existence. And I think that's going to be a big part of the future of Bitcoin. So we see this as stable coins. We see this as TradFi moving probably over the Fed now. And then we see this as Bitcoin and altcoin as the three categories. And you need to be able to be in all three because they're all different use cases as we move forward. You mentioned our cloud dollar, our stable coin that we built internally. Well, we also have USDC that we are already plugged into. We have the ability to use that stable coin. But we were working with the National Food Co-op, a cooperative who said, you're a cooperative. We're a cooperative. We want to cooperate. We're a stable coin. And so that's when we listen to our members. And that's the intimacy that you really have running a local FI is that we work with our consumers. We listen to them. It's not an all our card on demand, of course not. But understanding what they need, what they want, and having the ability and agility to build that is what Deland QSO has done for us. Yeah, we learned a little bit about Deland last week, the company behind your digital asset technology. What convinced you that was worth investing in? And where does that business go beyond Bitcoin storage? Yeah, it's a great business. Now, they've been a 15-year-old company within credit unions serving core. They're core experts bringing ROI out of your core, whether it be core conversions, mergers, acquisitions, all of those things. So we knew it was a really strong company for a long time with a great reputation. And so seeing this as a auxiliary new kind of business line for them, understanding it, believing we actually started building with them for three years as a customer before we had the opportunity to buy. We had the opportunity to buy and we put a couple other credit unions, Canva, and a couple other credit unions. And we put a couple other credit unions, Canva, out of Denver and Blaze out of the Twin Cities are the main owners of Deland QSO. So it is a cooperative structure. When you think about sovereign wealth, right? I know big corners want to keep their sovereign wealth and hold that asset, but we're also owned by our members and we're an intermediary. And we all know that intermediaries have to take a role here for this to continue to mature and become mainstream. And people have asked me, why did you do this at a credit union? I said, well, why wouldn't I? Actually, we're the first decentralized financial cooperative. I think our members back in the day probably thought, hey, if we pull our money at the postal, where we were the postal workers, where they work, and now we pull it, we become official. Will the government take that away from us? And at the end of the day, I think we've proven that credit unions have been over for around for over 100 years owned by their members, the most sovereign intermediary that exists in the world. And so it was a natural fit for me of saying, hey, how do I do this? How do I do this from a regulatory perspective? And that's it's off balance sheet, it's really allowing my members to use institutional grade custody to safely keep their Bitcoin locally. And when you do that, at the end of the day, if you think about it, they're my members, they own it. It's actually not me borrowing them my institutional grade technology. It's they're using what they already own because they're the owners and they are my boss. And you mentioned how much of this is, you know, member driven by nature, right? Where do you draw that line between, you know, if members are requesting access to certain digital assets, you know, how do you make that decision making process of we can offer this one, we think it's in your best interest not to offer this one in such a member driven environment? I think it's no different than anything else, right? So at the end of the day, member adoption and need and use, right? I'm owned by my members. I build things for my members. I serve at their pleasure, right? For my community, for my members. That's number one. Number two, what is the regulatory or the examined? Will it stand the test of a scrutiny of an examination, right? So where, where is regulation at as it relates to whatever that request might be those those two orders in first. And then at the end of the day, if those two things check the box, if I'm able to use my hybrid custody to safely and manage the risk with inside of my organization, those are really the three boxes that have to get checked for us to launch anything and work with our members. That's no different than in the traditional finance side as well, right? We have to understand where the regulation is, we have to understand the member need, and then we have to manage the risk internally appropriately so that we are protecting our members assets as well. Awesome. You've been studying this since 2012. And I imagine not many credit unions have a leader who has been following this so closely for that long. When you have members who are still a little bit skeptical, maybe about Bitcoin, crypto, digital assets, what do you tell them? That's what that's what our journey has been for the last four and a half years. You know, there is a lot of different, you know, bolt on solutions that have popped up over the last four or five years. Some credit unions have ran at them and we stayed the course. What we really identified back about five years ago was that we had a lot of people who were really interested in the future. And we knew that we had to build for the future. We knew where it was going from vaulting to deposits to lending to exchange. We wanted to do and buy and sell all in our core. We wanted to be able to do that from a coordinated perspective. The advantage of that, right, is that we are still on the same ledger. We have coined a core and correlation is our our core. So our examiners see it on the exact same ledger and they've already looked at that. So there's tons of advantage of taking your trad fi and all the compliance and the data protections that we have on the traditional finance side. And because I'm using my core to plug into these, I'm bringing them with me. And I'm going to talk to you about that. So thank you so much for joining us. I'm going to bring them with me from redundancy to disaster recovery to all the things that people really, really value. And so building your structure that way is really, really important. So you want to follow up on that question. I just lost my train there. So. Oh, well, no, I was just thinking I actually wanted to get your perspective because I'm thinking about St. Cloud specifically. The history of it founded it was the 1920s or 30s. I mean, 1930. Yeah. By postal workers. Now you're talking about the early days of the 20s. I mean, you're talking about the early days of the 20s. I'm assuming they weren't so welcoming toward this. Well, no, they were. It was just earlier, right? I think we're always looking at innovation. I think the biggest thing for education is, is that that's what we stayed the course when all those bolt ons popped up over the last five years. We knew that safekeeping was number one. We knew what we had to build long term, but education was important. So we were a founding member of the Minnesota Crypto Association, a nonprofit that does quarterly trainings now for the last four and a half years and to bring more education, whether we're partnering with St. Cloud State, one of our local universities and doing seminars there, holding quarterly meetings. We also have a entire training module for our staff as well as for our members, including the members who are like, I don't want my money over there. And I think it's really important to remember that side of it. But I think our members and the way that the world continues to move, change is not as unique as it maybe used to be. It's always hard, but change is at the pace of change today and innovation today. Consumers really want it all. And we've been serving them from that perspective for a long time. And so we really haven't got a ton of pushback. It's really more questions and clarity. That's for credit unions. That's for examiners. It's never really been people really against it. They've just been seeing bad headlines for 15 years and they didn't really understand it. I was in the same boat. I didn't really know a ton about it until about 2018 when I really dove into it and started to really learn it. And I actually think that's probably why we built what we built, because I was the skeptic in the room and I was the CEO in the room saying, hey, I don't really care how fast this happens, to what degree it does happen. But I want to know what I'm going to do when my members get there. I want to make sure I protect the primary relationship that I've had for the last 97 years in serving this community. And I ultimately, you know, as a CEO, it feels like since 2014, it's been like death by a thousand cuts to a certain degree. At some point, we have to protect our core business as an industry. We can't continue to outsource. You know, we've worked hard for these relationships and we're really good at it. Nobody protects the consumer. We deal with fraud and elder abuse and all those things in the traditional finance side of the world. We deal with volatility. And really, that's been our message to the legislators to find a way to let us in the game so that we can regulate this industry and we can make it safe for people who want to operate in these worlds. The one thing we know, these rails are not going away. These rails will move money in the future. It's stable coin rails to Bitcoin and Lightning Network. These rails are going to stay. And unless credit unions can custody the underlying assets, safe keep most of these assets locally, and then utilize also stable coins, which is another piece of the sandbox that we'll use for different use cases to serve our members. The reality is, is we don't want to rent somebody else's rails. That's the opportunities for Main Street, right? We at Deland CUSO have built rails that allow you to own your rails. We're a CUSO that comes into your institution. We help convert, leave a AR, IP behind. And so really what we're doing is we're not coming and extracting anything from your institution. We're coming in and trying to empower your institution so you can keep doing the same thing you've done for your members, for your community for the last hundred years as well. Yeah. Well, you know, change is sometimes intimidating for people, but it sounds like you guys are weathering that very well. And it's been a pleasure listening to your insights. So thanks for joining us. Awesome. Thank you so much for having me. Yeah. Jed Meyer, CEO of St. Well, coming up next, Bitcoin's rest of the market is shifting and it's starting to look like a very different cycle. We'll tell you what's changed up next in Chart of the Day. Bitcoin can help diversify how you spend, save and invest in your business, especially when every swipe of a credit card eats away at your bottom line. Most purchases are small, like a bag of produce or a gallon of milk. So credit card fees start to add up fast. But Square, you can now accept Bitcoin with zero payment processing fees, no chargebacks and your instant access to funds. Whether you're aiming for short-term goals or planning for the long haul, you can automatically convert a percentage of your daily card sales into Bitcoin. So if you're looking for a way to build savings in the background, and when tax time comes, you'll get the paperwork you need right where you find your reports and bank statement. Head to squareup.com slash Bitcoin to learn more. Thank you. ♪♪♪ ♪♪♪ So what is Bitcoin moving with right now? Well, for the first time since 2020, its strongest correlation is with gold, not stocks. Sean, walk us through what's changed. Absolutely. So for chart of the day today, we're going to look at Bitcoin correlations. Every online analyst is talking about what Bitcoin is correlated to. So what is Bitcoin actually trading with right now and what does that mean? So if you look at the bottom row, that's right now. As of today, Bitcoin's correlation to the S&P 500 is 0.36, gold 0.53, the 10-year yield a negative 0.31, dollar negative 0.32, the standout being gold. You know, Bitcoin's only been this correlated to gold November 2020 at 0.57, the second. To top row on your chart, Bitcoin was $15,000. Then 12 months later, it was at $67,000 at our top of that cycle. And in gold terms, it went from eight ounces to 37 ounces. Now, last cycle, you know, the starting S&P correlation was 0.55, the highest S&P reading on this entire chart. The 2024 top, the S&P was still the strongest link at 0.4. Gold at that top. It was at just 0.1. So last cycle, Bitcoin traded more like a stock and the result was record high in dollars, but barely a new high in gold. Now, today, for the first time since 2020, gold is the strongest link. The S&P correlation did not disappear, though. It's still at 0.36, but gold has overtaken it. So compared to, you know, every row, the closest match isn't a top. It's 2020. One big difference being the rates. And, of course, we're in a very different environment right now. Now, the 2020 Fed had rates at zero. The 10-year correlation was basically nothing. Today, we are about negative 0.31 correlation there. The most rate sensitive on this chart with the 10-year sitting at 5.28, which is the highest since 2002. So it seems like the takeaway here is Bitcoin is starting to trade less like a risk asset and more, like a market. It's a monetary asset. Yeah. You know, if I'm going to kind of convert this into forward guidance, I would say, you know, first off, correlation does not always mean causation. So this is more of kind of helping to make sense of where we might be. But you're exactly right, Grace. And the setup is what we want to see. Now, hopefully, we get a continuation of these correlation trends and we find ourselves in a cycle more akin to 2021 than 2025. All right. Thank you, Sean. Well, let's bring in our next guest now. Bitcoin miners just had their best month since January, but some big names are leaving for AI. Here to tell us what he's seeing on the ground is Dan Kohler, founder of ASICplug. Hi, Dan. Hey, good morning. Thank you. Yeah, thank you. So we just had Saifedean Amos on the show, and he told us that Bitcoin may have already reached its peak electricity usage. From what you're seeing being boots on the ground, in this industry, do you agree with that and why? You know, that's a great question. It is possible. Now, what we're seeing is a lot more efficient machines coming out with a much higher performance rate and better density. So the amount volumetrically of power required to achieve network hash rate isn't necessarily going to be consistent or growing going forward as you can get 3, 4, 10x the performance with a much lower performance rate. It's going to be more power consumption now than you can, you know, five years ago. So we're seeing significant improvements in that space. And as mentioned, there is a lot of adoption into the AI space as well. So as facilities transition existing large load data centers into AI, you're going to see some of that existing hash rate performance unplug or get, you know, liquidated on the market, which has made it an optimal time for people to get into mining in the bear market. And as we come towards the end of the bear market due to hardware costs, lower infrastructure costs, and as you guys probably understand and recognize, mining is a tax advantaged, discounted way to buy Bitcoin. So we've obviously been seeing a wave of miners shifting power and investment toward AI. When you look at an actual mining facility, what determines whether a miner should make that? And where does Bitcoin mining still have an advantage? Absolutely. So on the advantage point, Bitcoin mining is still the best way to monetize stranded resource and off-grid power. And we're seeing a lot of these large load miners that are transitioning to AI, redeploying their fleets into stranded gas sites, solar implementation sites, hydro dams with excess power, where you maybe don't have a 200 or 500 milliamps. You might have a 200 megawatt facility or campus doing all of your mining, because one centralized location is easy to run your redundant dark fiber and get everything in place that you would need for a hyperscaler. However, when you're looking at the machines itself, that's a sunk cost. They already have expended the capital. So it becomes a play where instead of having one 200 megawatt facility, they maybe pick up 15 or 20 smaller facilities that are stranded gas sites, solar implementation sites, hydro dams with excess power. So it becomes a play where instead of having one 200 megawatt facility, they maybe pick up 15 or 20 smaller facilities that are stranded gas sites, hydro dams with excess power. and you know that's a really interesting point that we often hear from the the um you know maybe lobbying perspective for lack of better terms of you know hey bitcoin miners can stabilize your grid hey it's good for these local jurisdictions um but we don't really hear a lot about what is the impact of that relationship to the bitcoin mining companies and their profitability and their operations could you help us kind of understand the the flip side of that equation you know what does it mean for an operator when they have to you know kind of uh agree to having flexible loads um or kind of down throttle during these conditions absolutely so early on uh a lot of this stemmed out of a a massive winter storm in you know 2021 2022 that devastated texas early on with demand response programs the grid operators were able to uh have fixed power contracts when they would need to shut down they would drop their load and be able to kind of resell that power back a lot of those fixed contracts have completed and now they're in more of a curtailment price-based model so they're not selling their load back they're just voluntarily not taking it now in a lot of these infrastructures so when that is happening um it has pivoted the impact on them a lot of the times it's really just kind of a operating at a loss they they've already got the sunk costs of the equipment the infrastructure the staff on site but they're no longer selling their power on their fixed contract back at market rates they are simply not operating during that time so they're reducing the bills that they're paying but they are not getting the yield during that time so it's had a bit of a pivot and i think that's one of the attractive points of going to an ai infrastructure place where as previously the uh demand response was kind of the cherry on top monetization while ai companies are competing for power not every energy source can support an ai dennis data center so where do you see the biggest opportunity for bitcoin miners to use electricity that other industries just can't reach yeah so a lot of that goes back to the um the off-grid or the non-redundancy type power bitcoin miners they want to be running 24 7 if they can but you can safely shut down a machine on an instant notice and it's not going to be a service level agreement breach whereas an ai data center you have paying customers using high performance compute in your rack space if you don't have power you have a major service level agreement breach bitcoin miners oh it's a bummer you know we we get a little bit less performance this this day but we'll fire up tomorrow so when you talk about needing the ai space you know level two level three data centers with grid connections and battery arrays and backup generators and all of this infrastructure that's hundreds of millions of dollars of capital expense to build these infrastructures out there sometimes billions depending on the size you don't have to do that with a bitcoin mining center and you're going to see as i mentioned more decentralization and spread out and that doesn't even have to be just off-grid you'll see uh places that used to be a welding shop down the road small warehouse that has maybe two megawatts of capable power that's on grid but there's no redundancy there you'll see you know people start to transition their equipment into that space so it's going to get a lot more resilient uh the equipment's out there the manufacturers are still putting new miners out every day and the miners themselves are getting more uh scrappy in where they deploy it and honestly i've seen deployments where it's literally a lean to plywood box with a miner sitting under it so it doesn't get direct rain on it and it's just running outside that works i'm really interested to hear about the product asic plug is selling you have a smaller machine that people can run at home so what does a realistic home mining setup look like now and what can someone expect to get out of it besides the chance of earning bitcoin yeah absolutely so um at asic plug we're we're pretty manufacturing hardware agnostic we'll we'll help people find the best solution for them and i i consult with them on what they want so when it comes to home miners a lot of it's going to depend on your specific infrastructure do you want something to keep your home warm in the winter there's a lot of great options for that uh if you live in texas like i do not a whole lot of uh of use for that excess heat but uh there are a number of home miners that can still be very profitable even at a residential electric rate and it's a really fun learning tool and you get to decentralize the network and just have something tangibly in your hands that is doing all of this work for you so always happy to help consult with consumers we do a lot of enterprise consulting and i do a lot of auditing in that space and you know i own um a software company called farm god that their entire mission is to streamline and optimize the fleet management as well really cool dan thanks for joining us today yeah excellent thanks guys yep ceo and founder of asic plug well bitcoin is valuable because of the ownership control and liquidity it gives you the challenge has always been finding the best solution for your home and finding the best solution for your home and finding ways to make bitcoin more useful without giving up the properties that made you want to own it in the first place and that's what's attractive about verified x the bitcoin custody sponsor of bmtv verified x is designed to let you use bitcoin across things like payments borrowing lending trading treasury management and settlement without requiring you to wrap it into a synthetic asset or hand control over to a third party and importantly for bitcoiners verified x is built around self-custody you maintain control over your money and you don't have to spend a lot of money and you don't have to be in control of your own signing while still being able to access native bitcoin liquidity across programmable financial applications and integrated venues like exchanges the idea is to expand what you can do with bitcoin without compromising what makes bitcoin valuable in the first place keep bitcoin as bitcoin and activate it explore verified x and see how bitcoin can move settle and work across programmable financial networks at verifiedx.io digital assets involve risk learn more before participating iran's top security official is making a rare admission the country's economy is in serious trouble according to iranian state media mosin ranzahi said in a high-level government meeting on saturday that iran is facing one of the hardest stretches in its history the new york times reports that iran's currency has collapsed since the u.s and israel went to war with iran in february and the slide has only sped up since washington tightened sanctions and imposed a naval blockade analysts are saying that blockade has largely cut off iran's oil exports the strain is hitting ordinary iranians with nurses and teachers saying they're quitting because their pay no longer covers the basics meanwhile talks between tehran and washington have stalled and while middle east oil shipments are nearly back to pre-war levels prices and tensions remain high another sign of strain in tehran today iran's oil minister has resigned state media says bosen paknazad stepped down for personal reasons head of the state oil company hamid bovard will take over as acting minister now tehran insists the decision was personal and long in the works but it comes seven months into iran's war with the united states with a u.s naval blockade largely cutting off the oil exports that support iran's economy so sean how much longer can tehran hold out yeah well last week we saw uh basically the the steel manned bullish first bearish case for resolution in iran and now iran really has its back against the wall uh which is something we talked about for for um you know at least a couple weeks here on this show and escalation is really the key risk here oil is reportedly flowing at pre-war levels the free market solved the constraint problem we have the east-west pipeline in saudi arabia um and you know the u.s blockade seems to be working so uh maybe the personal reason the the minister is stepping down is is similar to the nurse and and teachers and and or maybe it's just because he doesn't have a job uh they're not selling oil uh and at the same time the the risk embedded in shipping oil it really has not uh subsided according to research by potten uh and partners vlcc shipping costs from the gulf to the far east are sitting at 1.3 million dollars per day that's approximately 43 times what they were in january again oil can get through but that doesn't mean it's going to be cheap easy or safe for that matter uh you know the price of oil is going to continue uh reflecting this risk but we are seeing it come down substantially uh at the commodity level as as things tend to work their way around that bottleneck that was the straight of our moves right now wti crew down half a percentage point on the day hanging out around the number 90 and brent crude actually up on the day two tenths of a percentage point at 102. well coming up next so you used to regulate banks at the federal reserve now she says africa is bitcoin's greatest proof of concept charlene farirepo joining us next on bmtv bitcoin can help diversify how you spend save and invest in your business especially when every swipe of a credit card eats away at your bottom line let's say you run a local grocery chain most purchases are small like a bag of produce or a gallon of milk so credit card fees start to add up fast but square you can now accept bitcoin with zero 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So if you're looking for a company before, during, and after an issue is found, download BitKey today and use our promo code BMTV to get 10% off the second generation BitKey. This episode is sponsored by BitKey. All right. Thanks, Sean. Well, Sub-Saharan Africa is now the fastest growing crypto region on Earth. And here to explain why is former Fed regulator turned Bitcoin advocate and author of The Bitcoin Leap, Charlene Fadirepo. Welcome in. Thank you so much. I'm happy to be here with you both today. Yes. So let's start with the basics here. We know Bitcoin is often presented as a protection or a hedge against currency debasement. How should someone think about Bitcoin's role in protecting their purchasing power without putting their own financial stability at risk due to the volatility? Well, this is kind of Bitcoin's number one selling point. If you think about, like, let's take it to the United States. We just had our rates go up. The first time the Fed has raised rates in, what? Since 2023. And why did they do that? Because of inflation, right? So the Fed is trying to fight inflation. Bitcoin is the way you can fight inflation for the individual person. Why do we do that? Or how can we do that? Because Bitcoin has a fixed supply rate. And that is how you protect your purchasing power. That happens in the United States. And we're also seeing that in many, many cases in Africa. Now, you mentioned the Fed. And, you know, a lot of us are focused on the Fed's policy and the domestic impacts. But a lot of those policies are focused on the domestic impacts. And I think that's a great question. changes also impact people downstream from the dollar and outside of our nation's borders. You know, how did those decisions affect people in the African countries you've studied? And where can Bitcoin give them more control over their financial future? Well, here's the good news. I mean, I think that we've gotten some really positive across the board regulation in the Bitcoin space that came from the United States. We saw that in July. And I think that, you know, so goes the United States from a regular. From a regulation standpoint, so goes other countries. And so I think what we're seeing is that we're seeing many African central banks look to the United States and being favorable to Bitcoin and from a regulatory standpoint. And that's a positive thing. And we're helpful for that. We're thankful for that. So your book is called The Bitcoin Leap, How Bitcoin is Transforming Africa. Where is that transformation actually happening? Where are the. How is it changing lives? And what do you think the biggest. Yeah. So I think when you think about Africa, you have to look at the numbers first. We've got 1.5 billion people, 54 countries, 3,000 languages, roughly 42 central banks, roughly, you know, 40 or so currencies. So money movement is very expensive. It is slow and it's complex. And it's all of these are the factors that are allowing space for Bitcoin to thrive. So we're seeing merchants using Bitcoin to transform Africa. We're seeing people using Bitcoin to transfer value, export, import, export merchants. We're seeing individual families saving in Bitcoin for college and for day-to-day things. And we're also seeing folks from the diaspora using Bitcoin to transfer money to allow their families to thrive. And I think when it comes to Africa, the biggest selling point is that nearly every African country is dealing with hyperinflation. In the United States, we talk about inflation at five. And, you know, five percent. We want inflation to be two percent. But in Africa, they're dealing with double-digit inflation, 20 percent in Nigeria, you know, 40 percent in Zimbabwe. And what does that mean? That means your money is melting. That means purchasing power is dying every day. That means that no matter what you do, you're fighting a losing battle. And what's so fascinating in many African countries is that, you know, we've had private sector movement. We've had government movement. But it's really been, you know, an on-the-ground groundswell in terms of movement toward Bitcoin because it is a better choice of money for Africa. Now, you mentioned that 20 percent inflation metric in Nigeria. Who ranks third in global crypto adoption and first in direct transactions between, you know, people, peer-to-peer transactions using cryptocurrency in the first half of 2026? Now, is this purely an inflation story or are there other factors playing into this as well that you think may be largely ignored? And when those transactions are happening, are we seeing that as largely stable coins or Bitcoin? So, I think it's a both and. And I think this is the quiet part out loud. When we're talking about Africa, it's a Bitcoin and a stable coin story. And I think that's okay. You know, we're seeing Africans saving their money in Bitcoin, but also using stable coins to spend. That is what's happening. You know, we can argue about that, but it's really about the numbers. And, you know, I think it is a great way for people to push against the broken and fragmented financial system that they have. And you asked one other question, like, what are the other factors? I think that the median age of Africa is a huge piece of the puzzle. The median age of most African countries is 19 years old. The median age of the United States is 39. The median age of the UK is 40, right? So, you've got young, tech-savvy, hungry individuals. And so, you know, we're seeing a lot of people, you know, waiting for their chance, waiting for opportunities. And they've already decided that Bitcoin and stable coins are the way to move toward a better and brighter financial future for Africa. So, while Nigeria is leading the way in crypto adoption, the government did launch its own digital currency and fewer than 1% of people used it. So, why did it flop? And what are Nigerians choosing instead? Thank you for asking this, right? So, you know, the Nigerians, Central Bank, they've been very busy. So, not only did they offer, they created an electronic Central Bank digital currency, they also created their own Central Bank stable coin. But here's the thing. These are just digital versions of a poorly performing currency. And Nigerians know this, and that is why there was poor adoption for the e-Naira, and that's why there's going to be poor adoption for that e-stable coin, right? You know, I think that that is kind of the beauty of this. You know, you don't really even have to teach Bitcoin in Africa. People get it. People get that purchasing power matters. People get that they want to be able to save for the future. They want to be able to import and export goods that retain value. And so, Bitcoin and stable coins just make sense in Africa, and I only expect these markets to continue to grow. So, millions of Africans are already using mobile money without a bank. Why would anyone switch to Bitcoin for something they already trust? So, you brought up a really good point. So, mobile money is great. So, why would you switch to Bitcoin? Well, it just depends on the quality of your currency. So, you might have mobile money, but you might be transacting in a currency that's losing value, you know, year over year, 20%, 30% inflation. But one thing that's really important is that the fact that most African countries, I live in Dakar, Senegal. The Dakar, Senegal has the mobile money penetration rate of like 80% or 90%. That's huge. That's huge and unheard of. Getting people to trade. Transition from physical dollars to mobile money is an incredibly big jump. That last mile from mobile money to Bitcoin, that's the narrow part. And that's what I'm most excited about. Because, again, it's hard for people to actually start to bank on the phone. Nearly every African country is already doing that. They've made that leap. So, the next leap is leaping to a better currency, and that's Bitcoin. And that kind of draws me back to this idea that, you know, different markets are primed for different reasons. And one thing that the U.S. might have to the disadvantage of Bitcoin adoption is relatively the strongest dollar, you know, compared to these other jurisdictions. What do you see outside the U.S. that you think, you know, you'd like to share here to help kind of bring maybe a more well-rounded picture to the U.S. consumer, the U.S. market participant that might kind of challenge their market? PERCEPTION. that might be brought on by that relative strength of their local currency? Well, so I mean, I think that the movement of stablecoins in the world are nearly 99% dollar denominated, right? And so, believe it or not, that is stabilizing the dollar around the world. I think what I want to say to the US consumer is that I think that there's a place for Bitcoin, there's a place for stablecoins as well. Yeah. And your work, you also, your work involves human rights and financial freedom. Are there any maybe personal stories you could share that kind of give the best example of what control over your money really looks like in practice? You know, like, you know, I think that, I think the human rights side is the side of Bitcoin that doesn't get enough, that doesn't get enough money. Yeah. That doesn't get enough focus. You know, there's, I know of a good friend of mine that was actually using Bitcoin to argue or negotiate ransoms for refugees in Eritrea. And so, of course, these bandits weren't necessarily interested in taking any other money, but they were able to, they were able to negotiate that there. They were able to use Bitcoin to negotiate that. And then, then most importantly, those refugees that had to leave, you know, unexpectedly, they were able to save their value in Bitcoin. So, they were able to leave their country and go to another country using Bitcoin. So, there are lots, there are lots of many, many stories of where Bitcoin is allowing people to kind of maintain their sovereignty, to move their wealth across borders, and to just be, and just control their own wealth. And I know you're also the founder of the Satoshi Sister Circle. Can you tell us a little bit about that? Yeah. So, the Satoshi Sister Circle is my, it's my passion project. We are doing the hard work of educating and training African women to take on Bitcoin jobs. We believe Bitcoin is the future of money. And I believe that women are a part of that story. And so, we have a network of about 170 women all around Africa learning about Bitcoin, building on Bitcoin, right? So, working to become Bitcoin developers. So, many of them are starting Bitcoin businesses and Bitcoin communities. There's something really special when a woman learns about Bitcoin because when a woman learns about Bitcoin, a nation can learn about Bitcoin. We're seeing just incredible energy and interest in the Bitcoin space. And, you know, there's no concern about how technical Bitcoin is because, again, in Africa, Bitcoin's utility really leads the learning. And I think, again, if there's something I could leave with your listeners, you know, I think the Bitcoin education story gets very clear. When there's clear utility. And if you are an investor, you should look at what's happening in emerging markets countries like several countries in Africa because they're going to lead the way in terms of Bitcoin. I've said it before. I mean, Africa doesn't need Bitcoin. Bitcoin needs Africa because, you know, it is the brokenness of the financial system in Africa that is really creating this huge utility where Bitcoin is shining. Really great insights, Charlene. Thank you so much. Take care. Two Bitcoin treasury companies, two more purchases this morning. Strategy, the largest corporate holder of Bitcoin, says it bought 334 Bitcoin and Strive, one of the fastest growing treasury companies, added 2000, bringing its total to just over twenty nine thousand Bitcoin. Strive CEO Matt Cole is also urging the industry to take more risk on a post or in a post on X. He argued that treasury companies have become too focused on protecting downfall. And said Strive plans to borrow and issue more preferred stock to buy even more Bitcoin in a bull market. He says speed wins. So, Sean, these are these are two companies buying the same asset, but their stocks telling a very different story this year. Yeah. And also shout out to MetaPlanet, who who bought announced to buy this morning as well. But the story really has been between MSTR and Strive. Over the weekend, there was actually a pretty cool podcast that Matt Cole did with Robin Sayre, where he talks about how this isn't really a competition there. They're in it's in each other's best interest to grow this industry. And that doesn't happen passively. And you have to be active about bringing this apart. But that doesn't mean that the performance will be the same. And there's different stylistic choices and different management choices. And and it's not a winner versus loser thing at all. But each company wants to be the best. And I think that's a best, which is which is good for the industry and can be healthy. And so, you know, they really do have this kind of same underlying principle. They're both treasury company, Bitcoin treasury companies where they're going to issue equity of various types to to buy Bitcoin. Right now, strategy is is still they still have some preferred amplification, but they also have or they largely have preferred amplification. But they still have some convertible notes in other structurings as well, where strive is is purely convertible. I mean, purely preferred equity. And and notably, they're issuing a lot a much larger percentage of pref compared to their balance sheet. So will strategy may have issued more preferreds into the market through STRC and their whole suite of products. Strives is a larger percentage of their total companies kind of construction. And so what's happened is they've increased their amplification compared to the legacy company, which is strategy. Now, you know, this is not to be shocking to really anybody. Right. Usually SEC first first to frame or second entrance tend to kind of outgrow, not outgrow, but outpace on growth. Yeah, I mean, that's true. I mean, that's true. I mean, that's true. I mean, it's it it's it's it's it's it's the the the the incumbent. Now, you know, there's a lot more risk with a smaller company, but there's also a lot more upside. And this is something that the strive team has talked about. And so it's not uncommon that a smaller company in a sector is is the faster horse. And and they're going to continue to grow and probably grow faster. They also have the advantage of of coming to market a bit more cleanly and getting to learn from the example of micro strategy and not having any debt with a clean structure. And so the combination of those things has led to strive being the fastest horse right now. And and strategy has been focusing on retiring those convertibles on strengthening their foundation and their accumulation size is still undisputed. But as as, you know, proportional to their entire balance sheet, it's not the same as what Strive has been able to accomplish. Yeah. And you said what I what I was just about to say, which is that Strive is not actually out executing strategy. It's that it it's more of a function of Strive being the smaller company having a cleaner capital structure to work with. Yeah, well, it's it's a couple of things. I mean, you know, strategy strategy is obviously the pioneer of the industry and the titan of the industry. And when they move, they move in a lot more size because they've they've capitalized to a much higher scale. And I expect their engine to to pick up in efficiency. I think their amplification will go up. As as they get STRC back to par and as they continue to retire more expensive debt. But Strive, when you look at when you look at it at a more of a ratio basis or a percentage basis, you know, I think amplification is that is that good number to kind of look at as well as proportion of prefs issued comparative to the total capitalization of the company and their balance sheet. And and Strive really is outperforming them very much in that regard right now. But again, that outperformance might be virtue of of the fact they were to come to market later than strategy. Learn from strategy. They have no debt. And they were really able to hone in on this preferred equity strategy early on without getting hung up on things that Treasury companies in the past have done. And just the fact that they're a smaller cap company and they don't have to spend a lot of money to be able to do that. And I think that's going to change for for more growth. Well, and you brought up the article that Michael Saylor just released last week. It's titled Why digital credit issuers strengthen one another in case anyone wants to go read it. The first sentence of that article was I want Strive to succeed. Yeah, did not bury the lead. Just put it right there. So if if the real race is not about who's going fastest, what should investors be watching? Look, I mean, it's it's it's an industry story. Both both of these companies, these companies are pioneering something called digital credit. They're they're both coming in and saying, look, you know, I think most of the market understands the Bitcoin Treasury company trade. It's kind of a a short dollar long, scarce asset trade. It's a trade that the economy is going to continue to be more online, more digital, and that Bitcoin has a place there, as well as that the dollar is going to continue to get printed away into the abstract. And on top of that, they said, OK, well, if this is a hard asset and this is the environment we're operating in, why don't we kind of pioneer these perpetual preferreds? And this idea of digital credit. And the way that serious investors that move capital think about these things, they're not necessarily just picking one or the other. In fact, in a perfect world, they'd be buying a blended bucket, a true credit instrument that has these prefs kind of thrown into the bucket together. And so this really is a place where everybody doing this play wins together. And that the deeper that they can scale this and the more success they can show, it's going to be a compounding force to scale adoption, which is to the upfront benefit of all the firms involved in this space. And another interesting twist in the story is that Strive actually owns Strategy Stretch in their most recent filing, or at least the one from July. They reported they have over half a million shares of Stretch at a fair value over $43 million. So, I mean, we've kind of established it's not a competition. They're building the digital credit industry together. Saylor said it's not a competition in his article, so we won't call it that. But if you are comparing the two companies, do you think Bitcoin per share is the better scoreboard than total Bitcoin purchased? I think Bitcoin yield is very important. Yeah, look, I think numbers get difficult to compare. You know, you can't just say, hey, this company that has a market cap, you know, X amount of multiples larger than the other company is able to buy, you know, this many more Bitcoin. I think it's going to come down to efficiency and how they're able to perform on behalf of their shareholders, kind of at share basis. So, you know, take your preferred variation of Bitcoin yield. I think that's going to remain an important metric. And then kind of these valuation numbers are going to be interesting to monitor as well, as well as just kind of cost of capital into the future. And I'm also really interested in observing the continuation of deepening liquidity and expanded daily volumes on these preferred products as well. All right. Well, for more on the topic, let's go to Lance Vitonza, Managing Director and Digital Assets Analyst at TD Cohen. So, Lance, you just visited the Bitcoin Treasuries Conference in New York last week and just a report making the case that Bitcoin is evolving from an asset into a capital markets ecosystem. What is the biggest opportunity taking shape right now? Well, first off, thanks very much for having me. It's a pleasure to be here. Look, I think one of the biggest changes over the last several years is that the conversation has evolved from will institutions participate to how will institutions participate? That doesn't mean every institution is comfortable with Bitcoin today. Far from it. Many investors, we think, remain focused on volatility, custody, cybersecurity, quantum computing concerns or other perceived risks. What's changed is that Bitcoin is increasingly being evaluated within a portfolio construction framework rather than being dismissed outright. The discussion from the institutional community is becoming much more analytical. One thing that still surprises me is how often Bitcoin gets discussed in isolation. Institutional investors don't build portfolios one asset at a time. They evaluate how assets interact with one another. So, the question isn't simply whether Bitcoin is volatile. Of course, it is. The question is whether Bitcoin can improve a portfolio's overall risk-return characteristics when considered alongside other assets. And that was a theme that I heard again and again over the course of that conference, and I found it fascinating. And you also mentioned on this idea of building on an ecosystem. And in the same way that investors aren't just, you know, picking Bitcoin in isolation, they're likely also looking at this suite of products and their respective verticals in combination as well. You know, we're seeing a lot of innovation in these relatively newer Bitcoin verticals. We're seeing these prefs that are being listed. We're seeing some companies launching bonds. You know, these dividend-paying instruments on the pref side, it's becoming this more rounded-out ecosystem that's still very much in its infancies. You know, which of these products are most attractive to you, and where do you think the industry will kind of find the most footing to kind of build out a more robust ecosystem? Well, I would be careful about statements like, this is the best or that is not as good. I think that what's really most important is having choice. You know, and you're absolutely right. I think that there's no question we're seeing different investor groups approach the space through different instruments. And some of these investors want direct Bitcoin exposure. Others prefer operating companies. Others may be more interested in preferred securities or other income-oriented structures. And that's exactly what you see, we believe, in more established sectors. Multiple investor types participating through multiple securities designed to satisfy different objectives. So, it's not which security or which vehicle is best. It's, does this security or does this vehicle enable a broader participation amongst different classes of investors with different objectives and goals? In your conversations with analysts in the sector and in the industry, you know, what are their thoughts on these dividend-paying deferreds, right? It's not something that's paid out from cash flows necessarily. And it's backed by this digital asset called Bitcoin, and they're generating yield for the common shareholders. And it's kind of this long directional bet Bitcoin keeps appreciating. But it does pay this, you know, for STRC, for example, a 12% annual dividend rate. How are analysts thinking about this kind of newly constructed instrument? Well, I think it's very early. And I think that right now, one of the things that we're seeing is that while the universe of investors is certainly expanding, I think that we're still seeing on the institutional side, largely, even the preferred, the so-called digital credit instruments are being largely evaluated by traditional equity portfolio managers. And we think that that is something that is very likely to change over time. I think it's an interesting question, you know, will digital credit ultimately find a broader audience, not only in institutional portfolios, but among institutional portfolios? Will digital credit become the purview of the traditional credit manager? We don't know the answer to that yet. But that's where ultimately, we think the much larger opportunity lies. I mean, if you think about it right now, there's $160 trillion of global credit, right, that's being managed out there. I mean, obviously, we are at a very, very small fraction of that in terms of digital credit. If we can get the traditional credit managers to really embrace digital credit the way that some of us have begun to do so today, then there's obviously a huge opportunity there over time. And Lance, your background includes analyzing companies under financial stress. If Bitcoin went nowhere for the next three years and funding dried up, what is the first thing you'd check to see which treasury companies survive? Well, we've had a chance to look at this over the past, you know, the past year, right, with the shakeout that we've seen. And I think it's a great question, because when we think about the metrics that matter, certainly, and I picked up on the conversation a moment ago, certainly, Bitcoin yield, the ability to grow one's Bitcoin per share over time is ultimately the bottom line test from my standpoint. However, what matters is the company's ability to do that over the longer term, regardless of market conditions, right? So what we saw for the first half of 2025 was that when conditions are good, virtually anybody can step up to the plate and make the strategy work. When conditions are challenging, you need to convince investors that you have a balance sheet that can withstand difficult times, that can have ample liquidity, ample flexibility. So investors are increasingly going to be focused on things like when, if ever, is the next big maturity wall that may be coming due? Does the company have the ability to generate Bitcoin yield, even if its common stock is not trading at a premium to NAV? So these are the types of questions that I think we've seen now answered. At least they're beginning to be answered. And I think we've seen, you know, the company, there have been some companies that have pulled up stakes, and they're no longer Bitcoin treasury companies. They're, you know, they've rebranded themselves as AI. They've, you know, some of them are selling real estate, as far as I can tell, you know. But then there are others that have basically said, hey, no, you know, we are built to last, and we're going to do what we need to do to demonstrate to investors that we have the ability to make it through good times and bad. Yeah. And notably, Strive was able to keep accumulating for a good stretch of this downturn, and got a nice multiple assigned to them by the market as a result. You know, when it comes to the ability to continue to accrue Bitcoin, Bitcoin to shareholders throughout these down stretches, you know, it comes to mind that operating businesses would probably be nice as a valve to help out in that regard. You know, we saw MetaPlanet release a statement today of forward guidance that they plan to allocate at least 10% of their capital moving forward towards accumulating or acquisitions of brokerages and financial companies in the Japanese market. And then, you know, you recently interviewed David Bailey of Nakamoto, whose strategy combines Bitcoin holdings with media, conference, asset management. Do you view the ability to have operating businesses as a net positive towards that kind of resiliency and what you think more analysts and market participants will be looking for? So when we launched broadly on the sector back in April, we identified the synergies that may come from specific types of operating businesses if they are managed effectively as being a very likely strategic differentiator and competitive advantage. And I think we've seen that. We've seen the way that, as an example, Michael Saylor has been able to use his business intelligence software roots to basically create this wonderful analytical dashboard, which now has essentially become industry standard throughout the Bitcoin treasury community. I would argue that that is a direct and very demonstrable synergy between his operating business and his Bitcoin treasury operations. So I think the question is not, does the Bitcoin treasury have an operating business attached? The question is, can we leverage the synergies that may exist between the operating business and the Bitcoin treasury? At a very basic level, the first obvious synergy could just be the cash flow that's being generated by the existing business. If to the extent that you have a traditional operating business that is essentially financing or subsidizing the cost of running your Bitcoin treasury operation, that's a synergy. It's not super sexy, but it's a synergy. I think it gets more interesting when there are opportunities in Bitcoin media or advocacy or consumer or institutional finance and asset management. I think it's a synergy. Those are the type that get my juices flowing a little bit more. But again, the devil is very much in the details. And it's not just a question of, I have a treasury, now I'm going to bolt on an operating business and hope for the best. One story we've been following is the MSCI considering rules that could remove some treasury companies from its stock indexes. If that happens, how could it impact their ability to raise money and keep buying Bitcoin? Well, it's interesting. I actually think that if, if that happens, and I'm not making any prediction as to whether or not it's going to happen, but if it were to happen, I don't think that the fallout would be terribly dramatic. I think that the days of the sector needing index exposure, if that were ever the case, I'm not sure that that's the case today. I think that when we've had conversations with managers of the various potentially affected companies, the guidance that we've received is that we're talking about three percent or less of their shares that are being held by index funds. So worst case scenario, if they had to find a new home for the three percent of their shares that are in these indexes, that doesn't strike me as a cataclysmic event. I think the broader question is really more about what this means from the standpoint of where we are as an industry. And I would say that in my experience, whether you're talking about credit rating agencies or whether you're talking about credit rating agencies, they tend to be followers rather than leaders. They tend to be a good barometer of where the markets are, not where the markets are going. The old joke when I was doing, you mentioned my background in distress securities, the old joke was the rating agencies were always the last to know that a company was in trouble. Distressed guys were already picking over the carcass by the time that S&P would get around to downgrading the company's credit. And I think you're seeing the same thing on the upside with respect to the indices. Fully embrace the public Bitcoin treasury model. By the time the rating agencies fully embrace the digital credit model, it will only be because they have already been broadly adopted by institutions and retail investors. Good point. So one of the presentations at the conference you just attended focused on how chain analysis companies tracking large Bitcoin transfers could result in a large or a loss of privacy for large Bitcoin holders. How does that loss of privacy change how wealthy holders store their Bitcoin? And what can institutions offer that holding it yourself can't? Well, I think the question is not so much about what can people do to protect their holdings. I view that discussion really as what can we do to make sure that the largest institutional trades aren't unduly creating arbitrage opportunities which stand to, weaken the infrastructure for everyone else. In other words, I don't think that this is a question about, hey, we need to guard against some guy's Bitcoin being hacked. I think this is, there's credible evidence, and I'm not certain that this happened, but certainly there's credible evidence to suggest that large sophisticated parties have built business models around basically reading the blockchain to determine when and to what extent large Bitcoin transactions have been occurring. And then they've been able to basically buy and sell Bitcoin ahead of those transactions. And so I think that's a great point. And I think that's a great point. In a way to try to profit from price discrepancies and or to influence the price so that they can conduct arbitrage between spot Bitcoin and ETF prices. Again, I don't have the evidence. I'm not smart enough to know the extent to which that's actually happening. But I know that that was an issue that was talked about broadly. And I think that it really gets to trust in the ecosystem, right? This is not about trust from the standpoint of, I got to make sure that I wasn't hacked. This is about trust. And I think that's making sure that the price action that we are seeing in the marketplace is actually representative of true supply and demand for the underlying Bitcoin. Now, Lance, you mentioned Bitcoin price. And so I can't let you go without getting some expectations from you. Moving forward through the end of 2027, you know, what are your expectations and future outlooks for Bitcoin price performance, as well as some of these treasury companies, like MSTR or Strive or MetaPlanet or Nakamoto? Well, look, I mean, I will start by just saying I'm going to refer to what we've published, which is that by the end of 2027, we have forecast a Bitcoin price of $132,750. And we have that going out to 2029 at $217,500. Now, both of those, that same price, that same price, that same price of Bitcoin, that same price of Bitcoin price deck, reflected a 3Q closing price of $76,235. And we actually closed, obviously, you know, several thousand dollars above that. So I'm not making any forecast change on this interview, but I will just simply point out that we are in a period now where we need to reassess our longer term targets in the light of a of what we've seen, you know, through the end of the third quarter. That's just a factual statement. Now, you know, qualitatively, I will tell you, look, our best guess is that Bitcoin is going to appreciate, you know, somewhere in the high 20 to 30% annual rate. And that's, you know, something we've been very vocal about publicly in all of the research that we've written. So there's certainly nothing new there. The natural, what would naturally fall out of that, of course, would be that companies that are buying a lot of Bitcoin and are doing so on terms that are accretive to their shareholders, whether that's by virtue of taking advantage of premium to NAV when they issue common stock, or whether that's amplification, or the use of other, you know, other financial mechanics, any way that they can do if a company can do that, repeatedly, over time through good cycles and bad, we would expect that they are going to appreciate in value at a multiple, well, at a significant percentage, maybe 50% more than the underlying Bitcoin itself. And that's why we have argued, you know, for, I mean, the better part of the last two years now, that for investors that are interested in Bitcoin exposure, we absolutely believe that they should be considering exposure to a well-run, Bitcoin treasury company. All right. We'll take it. Lance Vitonza, managing director and senior analyst at TD Cohen. Thanks so much for your time today. Thank you. All right. Well, that does it for today's episode of BMTV. We got another full house tomorrow. Surprise. Here's who's joining us. Sam Baker, research analyst at River. Leon Wonkum, author of Digital Real Estate. Christian Corrales, senior director of operations at the Human Rights Foundation. Alex Bloom, CEO of 2Prime. Mark Palmer, senior equity research analyst at Stonex and Logan. Marashami lead analyst at Housing Wire. So throw us a like and subscribe on your way out. Thanks so much for spending your morning with us today. For Sean Hagan, I'm Grace Remington, and this is BMTV.