Transcription
All right, welcome everybody to the Bitcoin Treasuries Roundtable. I'm Tyler Rowe and I am joined by my regular co-panelist here, board director of Bitcoin Strategy at Capital B, Alexandre Laizet. How are you, Alexandre?
Doing great, working on Bitcoin as always.
Love it, love it. And we've got some special guests on the roundtable today. Andrew Webley, the CEO of the SmarterWeb company in the UK. Welcome to the show, Andrew.
Thanks, thanks for having me. Looking forward to it.
Looking forward to it as well. And of course, I've got Jesse Myers, Cresus BTC, who uh my audience will know well from an interview we did last fall. I was introduced to the raving online community of fans that you've built at SmarterWeb. Jesse, welcome to the show.
Thanks for having me.
You got it, you got it. I mean, let's start things off banging. Things have been really moving in the Bitcoin treasury space. And Andrew, I'd like to talk to you first. um So, SmarterWeb Company based in the UK, give us the overview of your company. There's maybe some people in the audience who may not know what you guys are up to, but you guys have recently had up listing, you've been added to important indices, you've been acquiring Bitcoin, acquiring operating companies. Can you run us through what SmarterWeb's been up to?
Yeah, sure. If we start at April last year, which is when we became a public company, it's a business that I set up in 2009, but we became a public company last year. I first invested in Bitcoin almost 10 years ago and I was fortunate to find strategy. And that was my Bitcoin moment when... when I felt that, you know, taking Bitcoin in a public company was great. We didn't have anything in the UK and I looked for a long time to find something and I couldn't. So I decided that I'd list my business on the stock market, which is what we did. Then I met Jesse in the very early days of being a public company and together what we've done is we've tried to, you know, drive the company forward. And I think we've done that reasonably well so far anyway. What we've done is we've got a balance sheet of a little bit less than Alex of Bitcoin. We've uplisted to the London Stock Exchange, which is fantastic. structural moment and when I listed the business originally everyone told me it wouldn't work in the UK and then they told me you couldn't list it on the London Stock Exchange and you know both of those things turned out not to be true. uh And then this week, uh on Monday this week, we joined the FTSE index series so we're the first Bitcoin treasury company in the UK as well as the biggest uh to become part of an index actually in the seas. So it's the FTSE All Share, the FTSE Small Cap. We believe we're well on the path to becoming part of the FTSE 250, which is the next index up. And yeah, we just keep doing our best to try and push the business forward.
That's awesome and really exciting news. You know, it seems like you guys have been really knocking it of the park this year, so to speak. And, and, you know, just, bullish news all around. um Jesse, I mentioned when I interviewed you on treasury orange on the podcast last autumn, I wasn't really prepared for the enthusiastic feedback from the smarter web community. So you guys have been building a rabid community of loyal engaged shareholders out there. ah I think MetaPlanet has been so great at this. Strategy, of course, is kind of the OG of building that online community. But how have you guys been so successful in building your community, and why is that important for the long-term outlook of SmarterWeb?
Yeah, I think that's like a less discussed, less thought about point that's absolutely critical for a Bitcoin treasury company. I think really it starts with Andrew. I think Andrew's intentions... when he took his private business that was at the time 15 years old and made it a public company with an intention to make it a Bitcoin treasure company for UK retail investors. uh Because he was one, he is one. And his mindset was there should be something like this in the UK and it should be run well in the interests of the retail community that are the core support And I think you're right that the meta planet as an example uh has succeeded because they started small, developed that retail community base uh of high conviction, uh very enthusiastic support in Japan and scaled from there. And I think part of what has happened over the last year in before and treasury companies is other companies have tried to go about this a different way. These pipe deals that relied on the idea of we'll give institutional investors a discount upfront, we'll get the money in the door, we'll buy the Bitcoin, and then they'll be able to sell to retail and profit. That's kind of the underlying premise of a pipe deal. And it turns out retail investors don't appreciate that and are savvy, savvy enough to know that they are the exit liquidity. And they don't want to be the exit liquidity. So I think the SmarterWeb's success is starts with how we treat our retail investors and the mindset that Andrew has that it's all about delivering value to them. And I think that really resonates with really any retail investor community, but I think it's also especially authentic. uh, for the UK retail community, because, uh, as I've learned, in the UK, there's, there's quite a history, uh, over the last few decades of kind of scummy deals and, you know, insider dealing among small cap companies in the UK landscape. And so retail investors are wary and they want to be treated well, uh, and they want to trust in a leadership team that has their interests at So, you know, I think that all in all that that's why. you experienced so much passion from the SmarterWeb community because our shareholders have learned to trust Andrew and they have great conviction in his leadership and you know and uh and confidence in his focus on doing right by them. And I think that's really refreshing in the modern era in general. I think it's the basis of our success so far. And I think will be the core of how we continue to scale and grow and build on that successful starting point into the future.
It has been really refreshing to see that. And I think a lot of Bitcoin treasury companies are noticing that. Alexandre, I'll bring you in on this. You've been great at speaking to shareholders, getting out there, educating people not just about Bitcoin, not just about your stock, but about capital markets generally. How important has the outreach to your shareholders been? How important is it, on a daily, weekly, monthly basis, keeping people updated about what's happening in and around the Bitcoin ecosystem?
Well, we've been very fortunate to have since the very beginning as well a very strong shoulder base and uh actually quite uh comparable in size together with SmarterWeb and comparable in strength as well I think and we have a lot of similarities. I think I would like to turn things upside down and say that most importantly, it's the feedback that we receive from the shareholders that is quite important and it's more the capacity to have, uh let's say, a building together of the company basically. and that clarity of the leadership. uh And I think that's something we share as well with the SmarterWeb with very clear objectives and very clear commitment to building the company uh in the interest of uh all shoulders and quite specifically, uh of course, uh and first, the individual shoulders that, of course, invest lives and savings in it. and most importantly that we have in every transaction that we do in our mind how will this be valuable for the individual shareholder that is not following the news every day and trust the company. And I think that's the most important aspect. And I think the most important thing is really in all of this, the Bitcoin per share focus of the company. And with this Bitcoin per share focus, uh as well considering not only the Bitcoin per share in the single operation, but how a transaction can improve the probability of more Bitcoin per share in the future. And that brings in other types of also fiat. uh type of uh elements that you need to take into consideration that were not really considered in the pipe deals, for example. And I think uh in both companies, we've taken those aspects very seriously. And the community in Capital B is one of the strongest. In fact, you know, it's not for uh any reason that, uh it's not for no reason that we've maintained uh quite a good premium overall, even in the bear market. And that's due to a lot of things, but the most important in my view is the overall shareholder alignment and organic growth. uh over time uh that makes it uh possible for a company to strive even in a bear market. uh I think we've seen also, uh you know, when we see the smart web communities and capital B communities sometimes interact as well. I think there is a shared uh positive constructive. behavior towards building those leaders in each jurisdiction. uh And uh it's really amazing to see that we are building the future of Bitcoin adoption in each respective capital markets. and it's much more impact than people think. It's much more Bitcoin adoption than people think. When we say like, you know, it's big news that SmarterWeb is included in the indices. These types of things have massive implications down the line because you cannot see from now, you cannot see everybody that will have a form of Bitcoin exposure, all of the wealth advisors that will now get interested and so on. And it's been also quite important for us when we've been included in life insurance flows with some Tobam funds included in some French life insurance programs and so on. yeah, that's overall that's extremely positive and uh the shareholder community in my view is the foundational component of our companies.
I love that perspective. And I'd like to bring you in on this conversation, Andrew, about listening to that investor feedback and building that community. Of course, we have Michael Saylor, um who's kind of started the Bitcoin Treasury Playbook, and he's shown the ability to be nimble, to be able to pivot. um How important is it, Andrew, to be reactive to... capital market momentum, the &A space, sensitivity to Bitcoin's price, and balance that investor feedback and being able to maybe change course while maintaining that strategy of Bitcoin accumulation.
Yeah, it's mega important. So if you think about the objective of a Bitcoin treasury company or certainly how I view it anyway, it's to increase the Bitcoin per share. And then after that is to increase the size of the Bitcoin stack because scale matters as well, you know. So that's the model. It's pretty simple. But there's lots and lots and lots of different ways that you can achieve those results. And as things change, particularly in our industry more than probably any other industry, you need to change. So this is the great thing about having an engaging community. What you can do is, it's not just the team coming up with ideas. We've got a community of hundreds or thousands of people, dependent on how many people are online on an individual day. And as the people running the company, We can listen to those people, we can interact with those people. And in the nicest possible way, we can take all the best ideas and incorporate them into our plans. So we can change course very, very quickly, which is fantastic. uh And we can also learn from the other companies. That's the great thing about this model as well. So you're learning from your shareholders and you're learning from your peers. So whether it's capital B, meta planet, strategy, we can look at what different people are doing and we can think, well, that's quite good. We'll have that bit. So, you know, I'll give you an example of that. You know, there's certain things that we're thinking at the moment that we had a different opinion three months ago. And, you know, that's absolutely fine. You know, it's our right as, you know, human beings or CEOs or whatever. to change our opinion when the facts change after careful consideration. So I absolutely love our community. I look at the comments almost every day, sometimes intraday, and I often think that's a great way, that's a different thing, or this is something you haven't thought of. Of course, we can only engage in certain ways because there's certain rules when you run a public company, but that's why sometimes people will see something that's probably you know, be mentioned in the community and then they might see it make it into an RNS, for example, an announcement. So yeah, it's brilliant having all of that. You've just got a much wider team effectively all working together for the same end goal.
Yeah, has that been surprising to see, you know, the Bitcoin community and the Bitcoin treasury shareholder community being, you know, I guess being a way to outsource some of this this learning in the way you can uh shift your strategy and respond to those demands under.
Yeah, of course. So for me personally, you know, it's been maybe overwhelming or maybe surprising. I don't know what the word is. You know, when you've got a little business that you've put your life into that you've worked every single day for, you know, over 15 years to try and make successful. And before we were a public company, we were profitable every year. So, you know, it was moderately successful. And then you... you do something because you couldn't find anyone else doing it in the UK. And then people become interested and, you know, we are the, I believe today, we're the 29th biggest public company, Capital B is the 28th biggest public company holding Bitcoin on the balance sheet globally. You know, that's using your data there, Tyler. And yeah, it is surprising in some ways. Maybe when I look back at it now, Maybe it shouldn't be surprising. know, all we're trying to do at the end of the day is we're trying to deliver something that we believe is the best way to run a public company built on the best asset that the world's ever seen. You know, we believe that Bitcoin treasury companies will become the most valuable companies in the world. So, you know, when you view it through that lens, maybe it isn't surprising. But, know, when you work in one of these companies and you're trying to deliver value, you know, every day, move things forward. um You know, it's sort of, you don't always think about it. You know, when we uplisted to the London Stock Exchange in February, you know, we had a pretty intense few days, including the day that we uplisted. And everyone came up to me and they said, wow, this is amazing. You know, all these sorts of things. But when you're in the thick of battle, you know, you don't often look around, if we had time to do that, it would be. more surprising, so a bit rambled, but that's the answer.
Jesse, I'd like to come to you talking about your inclusion in these new indices, the FTSE FTSE indexes, maybe kind of bridging for the UK audience and the US audience who may not be as familiar with some of these global indices. Can you break down why that's important? How it can bring a passive bid to the smarter web stock and maybe even add some legitimacy to the company as it grows?
Yeah, I guess I'll start with sort of a cool outcome of it. You know, as of now, uh SmarterWeb is a part of most pension portfolios in the UK. I probably shouldn't say most, but maybe many, right? Anybody who has exposure to the FTSE All Share Index has some exposure to SmarterWeb and by extension, some exposure to Bitcoin. And that wasn't true a few weeks ago. And now it's true. So that's, you know, a tiny little step for Bitcoin adoption globally, but it matters. And, you know, I've mentioned this a few times elsewhere, but... What we've seen from MetaPlanet in Tokyo is that uh over the lifetime of their Bitcoin treasury strategy, uh MetaPlanet has been 9 % of total returns for the Tokyo Stock Exchange. So if you didn't have exposure to MetaPlanet, you underperformed significantly. that's an example of that's why indices exist, right? Like this is your basket. your weighted average of all the stocks out there, your weighted basket, so that you can perform in line with the overall stock exchange. And we believe that Bitcoin is the best asset in the world. We believe Bitcoin will continue to appreciate it 30 % keger over the coming decade or two. And you know, Over the last, I think it's this, over the last decade, maybe this century. The average return on the London Stock Exchange has been 6 % a year. So, you know, if Bitcoin does what we think it will do, our balance sheet will grow at that rate, plus whatever we can add in terms of Bitcoin per share. We will perform, if those things remain true, that we will perform much better than the rest, know, than the average London Stock Exchange company, and we will become a larger part of the index see uh allocations ah and therefore we will become a larger part of everyone's portfolio in the UK. uh In the same way that MetaPlanet has been 9 % of total returns, it's possible that SmarterWeb could represent a significant percentage of total returns for the London Stock Exchange over the coming decade, let's say. uh Hopefully that's how it plays out. And that's part of how Bitcoin wins. that's the importance of being in these indices is you start to be in everybody's portfolio. You start to be part of the benchmark by which every uh asset manager is going to be measured. So you, you, it flips the default, right? Previously for, you know, for all of Bitcoin's history, you've had to stick your neck out and say, I'm going to add Bitcoin to my portfolio because I have a thesis on it. And I really believe in it. I'm willing to fight for it. And now you need to have a reason to exclude a Bitcoin treasury company from your portfolio if it's in the stock exchange that you measure yourself against. um So that, you know, the default becomes including Bitcoin in your portfolio by way of a Bitcoin treasury company in an index. And I think that's a seismic shift for Bitcoin adoption, you know, by winning, winning by being a part of everybody's portfolio and helping uplift portfolios everywhere.
Yeah, that has been a real powerful unlock to see that Bitcoin is gradually becoming more more part of these, not even gradually, just suddenly becoming part of these portfolios that everyone holds, pension funds, fixed income funds, digital credit's gonna be the backbone of I think a lot of model portfolios in the coming decade. want to pivot to you, Alexandre, and can you run uh through what Capital B has been up to recently? We talked on the podcast with uh Yves Choueifaty last week how you guys are pursuing a potential digital credit strategy down the road, and you've been accumulating Bitcoin. Andrew did a nice shout out to the BitcoinTreasuries.net leaderboard. and said that that's the place where we're tracking how much Bitcoin that each of these public companies have. So can you run through your recent acquisitions and do you feel a little bit of uh a friendly competition between your counterparts in different jurisdictions in adding Bitcoin to your balance sheet?
Yes, of course there is always a friendly competition. In many ways we are not competing, we are on the same team. Because the success of SmarterWeb is also the success of Capital B in many ways. saw recently that H100 eh also uh signed an LOI for the potential acquisition of two private companies that would bring them towards 3500 BTC. That's great news as well. Of course, we want to be ahead and we want to have the most Bitcoin as we all do. uh race we are all in every day. uh But you know, it is much better for the industry to have various types of companies that pursue that objective of Bitcoin accumulation, sometimes in slightly different ways, sometimes in the same ways. uh But that is much better than having only one single company, because that creates a sector that creates an industry. And when you talk to investment banks, when you talk to asset managers, uh they much prefer for their validation of investments to show that yes, there is an industry of companies that exists in that ecosystem and that they can benchmark and so on. And of course, our objective at Capital B uh is to consolidate our leadership over in Europe and uh to do so. If you look at our Bitcoin accumulation over the bear market. Actually, if you look from June, where it started to go down, we have accumulated more than 500, 600 BTC. And so that's quite substantial coming from 40 to 620 to 1,200 and then 2,888 BTC. most importantly, recently we have added a new tool for the company, a new innovation that we discussed last week, the ability to issue the equivalent economically of calls. straight calls, straight call options to have the possibility to acquire more Bitcoin on the balance sheet without any dilution at the time of the deal. And you know, we were talking about the abilities of a company to accumulate more Bitcoin in the bear market. Well, uh nobody thought about that instrument and we just did it. And uh I'm sure there are many other ways that could happen over uh the next months and years. And our objective is to go towards 7,000 to 15,000 BTC over the next one to two years. And that is our core focus. So the competition is accelerating as always. And the anecdote is that, you know, when we launched the strategy, with 15 Bitcoin, were part of the top 30 companies. uh And now we have with all of the new companies that have been created and a lot of the pipes in the US, we have maintained that top 30 and we have even slightly increased. And quite surprisingly, we have recently also increased ranks not because of uh more Bitcoin, sometimes because of companies that have sold Bitcoin. we, you know, this is just starting, but the core focus of our companies on Bitcoin accumulation and very conservative management of the company and so on is important to keep accumulating a lot of Bitcoin, but to manage the company very uh carefully and in a very conservative manner. You've seen strategy with the USD reserve. We as well keep some cash, of course, and some BTC as well as part of our operational reserve. And that is for conservative uh management of our company. I think that laser focus on Bitcoin accumulation and restraining from any type of risks that can arise from shiny objects along the line uh will be also part of the differentiation uh in this place. And our core focus is to become the largest digital credit issuer over in Europe.
Awesome. That's really cool news and a super awesome goal that we're anxious for both of your companies to keep pursuing and continue to have awesome success with. And I'll throw this out here to whoever wants to talk about it on the panel. m Alexandre, you were just talking about a covered call strategy and GameStop's been in the news in the last 24 hours as they release their quarterly earnings. And uh they put essentially their entire Bitcoin stack into a covered call strategy through Coinbase and they had strike prices that were set to expire at the end of this month. I'm not sure of the exact timing yet, just still kind of digesting those details. uh They had a cover call strategy in the $105,000 to $110,000 range on Bitcoin and they earned a few million dollars by putting that entire stack into this strategy. that's a company that's not aggressively expanding their Bitcoin accumulation. I think that's just an example of them putting their current Bitcoin stack to work for some yield. How do you guys, what are your thoughts, I guess, on what GameStop did? um Is that a fit for more Bitcoin treasury companies or are there other ways that you think oh it might be interesting to explore yield generation?
I would like to just to from a differentiation perspective to say that when I said the calls, the great thing about what we did is that we issued the equivalent of calls. on the stock and not on the Bitcoin. So we actually achieved 3 million euros of additional capital on the balance sheet with no share issuance at that time. And we added the MNAV 1.1 floor over time as well. That is uh quite important to maintain the Bitcoin per share accretion. And most importantly, compared with the GameStop strategy, we have not put any Bitcoin at risk. that's the major differentiation. And then I think we need to differentiate between a strategy from gain stop that was not clearly transparently communicated in advance. uh I'm not criticizing, but that's what they did. And at least from a Bitcoin ethical lens and a Bitcoin treasury company transparency principles, I think that the right model to do that type of strategy is the one that MetaPlanet has been doing, being very transparent about the allocations that they would make to that strategy and their quarterly results and so on. But great for GameStop. if they are able to uh add more cash flows. The point is in my view that cash flows are great but over the long run um you know Tesla, uh its data is of one year ago but as of one year ago Tesla was underperforming Bitcoin and they had Bitcoin on the balance sheet. and strategy was largely outperforming Bitcoin. And you can have shorter moments in bear markets where that is inversed, but over the long run, the companies that are more focused on the liability side of the balance sheet in terms of innovations, in my view, will largely outperform. But cash flows are quite important and we see that MetaPlanet is really an example in that perspective and that probably more companies will take some inspiration in some ways, probably.
Yeah, interesting. I'll throw it over to you, Jesse. I was talking with Adrian Morris yesterday on a uh podcast that we released, and we were talking about the potential of Bitcoin yield in the future. Because the Bitcoin treasury space is so nascent my perspective is that uh Bitcoin treasury companies should be definitely very prudent with how they... expose their Bitcoin stack to additional risk and maybe conservative in the way that they manage that risk. How do you view the current landscape of generating yield on Bitcoin for a Bitcoin treasury company and how does SmarterWeb think of that strategically?
Yeah, a few things here. You know, it's interesting to hear that I didn't know that GameStop was doing that. It sort of makes sense for a company in the position they've put themselves in, which is to say that they have Bitcoin on the balance sheet, but they're not really a Bitcoin treasury company. It's just part of what they're holding. uh And it kind of inherent in that they sort of took a step back from pursuing Bitcoin. uh I guess part of that is like they're not that bullish on Bitcoin. And so know, selling covered calls is inherently a willingness to uh take... income today in exchange for potentially having to give up upside on Bitcoin. And that kind of makes sense for a company that's put themselves in that sort of position where it's an asset they can make an additional yield on by potentially selling, potentially having to give up upside on it. But that's not what a Bitcoin treasury company is all about. Shareholders give uh the mandate to Bitcoin treasury companies is to focus on growing Bitcoin ownership, growing Bitcoin per share. And hopefully that means outperforming Bitcoin, right? So you don't want to underperform Bitcoin inherent in that. I think, you know, when everybody's thinking about how do you get yield on your treasury, you know, there's an infinite number of ways you can do that. And and I think that it's kind of easy to lose sight of opportunity cost You know every Bitcoin on your balance sheet can really only be put to work in one way at any given time and So for you know from my point of view I think about it as If you were to put uh Bitcoin on your balance sheet into a Bitcoin yield product, whether that's selling options m on oh Bitcoin covered calls or whatever. um That's one, each Bitcoin there is a Bitcoin you can't use for collateral for something else, whether that's preferred equity instruments or other kinds of debt or anything. So you have to think about it in terms of that. And then you have to weigh, what's the risk that you're taking on through an opaque kind of Bitcoin yield product? And is that in line with shareholder mandate for how this Bitcoin should be deployed? And then, you know, how does this stack against all the other opportunities out there? Because you can really only choose one at a time for how you're deploying your Bitcoin. So that's how that's how we think about it. Of course, this is constantly shifting. You know, I think. It's still sort of early days for mature Bitcoin yield products. um know, whether that's, you know, there's a sort of cottage industry of providers that that offer this as a service, uh but they haven't been around that long. And so, you know, as that track record grows in length, I think, you know, it becomes less risky in terms of how much of a track record they have. um But ultimately, you have to weigh that against what's the highest and best use of this Bitcoin as collateral um and how we could be furthering the Bitcoin treasure company strategy that... that MicroStrategy and MetaPlanet have so well articulated at this point.
Yeah, I love that. That seems to be a really measured uh approach that is open to ways to amplify that balance sheet, but is really paying close mind to protecting that Bitcoin stack. Andrew, I'd like to bring you in and talk about something that happened at Strategy World. So Amy Oldenburg was there from Morgan Stanley, and she said, traditional firms like Morgan Stanley can't just sit. idly buy where the interest in Bitcoin is accelerating. I'm sure they're hearing from their clients that they want Bitcoin exposure, they want in on digital credit. And she said Morgan Stanley can't afford to rent the technology. to say something like that was really bullish to me. She's next to Michael Saylor and Phong Le at a Bitcoin focused event. And I think that's a huge signal of a lot of the pent up demand that's going to be coming from legacy. clients who are with the big banks like Morgan Stanley, JP Morgan, Vanguard, Fidelities have probably all heard the same thing from their clients. uh Was that a signal to you, Andrew, to have a managing director of a big bank talking so bullish at a Bitcoin event?
Well, I actually sat next to her. So it's a pretty big signal. I sat next to quite a few people actually that had similar roles in very, very big banks as well when I was over there. Alex and I spent some time together. Jesse was there. Yeah, I think if you look back maybe a year ago, would you have that attitude from these big, big banks? Probably not. I've been blown away by the conversations that we've been having recently with the support and the attitude of these big banks towards what we're doing and what our peers are doing. Sailor deserves a lot of credit for pulling all these people together for advancing the mission for over five years now. you know what he's doing in terms of product development with the preferreds is mind-blowing really. I think it's easy when Bitcoin's had a slightly tougher year this year, you know, for everyone to forget that. You know, the industry is relatively new, but compared with where it was a year ago, you know, we weren't even a public company a year ago. You know, we listed, I think, 11 months ago. you know, it's changed a lot. And then to think where it's going to be in one year, two years, three years, you know, it's, it's crazy. So yeah, I think it's very important for people to understand, especially coming out of the US, but then with the other banks, you know, from our point of view in the UK, you know, many of them have got shared teams. You know, it's, it's, it's a pretty amazing time to be, you know, either in the space or investing in the space or just following the space.
If I could add on to that a little bit, I think this is one of the things that your typical Bitcoiner isn't aware of. you uh know, we've gotten to talk to a number of institutions that have... that have made a lot of money by helping strategy execute their strategy. This is how finance works, The service providers, the banks, they make money when something sells well, right? And MSTR and the prefs have sold very well. And so, I think people at Morgan Stanley and other service providers, other banks, they have to. embrace it. They have to say, okay, we're making a lot of money here. Clearly, this is good for Morgan Stanley. What else can we do to make more money here? know, this is, we've struck gold here. uh How do we get more out of this? This is clearly a trend. It's not going away. It's been around for five years. They're executing. We don't fully understand it, but we need to position accordingly for, to get more, right? Or cement our market share, perhaps, you know, as a uh leading provider of these services for, you know, digital capital. ah And that means that you know, we're having conversations smarter web gets to benefit from that I'm sure capital B gets to benefit from that. I think any other well-run Bitcoin treasure company gets to benefit from that because These trad fi institutions are paying attention and they want to find you know, the next business for them to participate in and help grow and make money by facilitating that growth. um So I think that that's... it, it, uh really well said. I think Sailor really has done this heavy lifting and I want to bring you back in, Alexandre for your perspective on how that has allowed you to execute your strategy more. Of course, we had the big news this week um of the new 21-21 plan where Saylor's gonna raise another $21 billion of common share ATM, $21 billion of stretch. Those were inevitabilities that were kind of made formal. um just this week. note, it seems like he can just keep adding an extra 21 whenever he wants. I don't know if there's ever gonna be a stop to that. That's all I'll say. tool for sure, using those 2121. Maybe he'll upsize to, in 10 years we'll be talking about the 210, 210 plants, but super exciting. the one quadrillion plan. That will be nice. But how has the heavy lifting that Saylor has done changed how you're able to talk or allowed you to even talk to more banks and more capital allocators um being in charge of a European Bitcoin treasury? And then can you give us some perspective on how important this new capital raise from Saylor through the ATM and stretch has been,
Yes, think, uh well, the work that Michael has been doing and the whole strategy team with the banks and the success that it has had in my view was uh three major consequences. The first one is, of course, the fact that the investment banks are already educated about this and that all of the teams that have been working with strategy uh already know about Bitcoin, Bitcoin per share, Ebnav and all of the digital credit products and so on and that's of course a major benefit. The second major benefit is that when you are over in Europe and you say that you are focused on deploying the strategy playbook over in Europe, uh all of the asset managers uh now know about strategy. They like it or they don't, but they know about it. And the clarity of our strategy uh is a major advantage in that respect because it simplifies a lot the understanding of what the company is doing because of that five-year track record. You are a uh company that is quite new in this strategy. First, now it's already one year and a half, but still in the world of capital markets, it's still young. But you benefit from all of the track record of strategy. And then the third benefit is if you are looking at digital credit for the potential future of the company, then you can also refer to the success. of both, well of course, the convertible notes at the time and now the digital credit products listed such as Trich and that success, the fact that it trades at par, the fact that it trades hundreds of millions of dollars and so on, and the fact that now it outpaces even in some weeks the capital raising from the ATM itself, just um makes it much more easy for institutions to get and to want to replicate that in other types of jurisdictions. And all of these things, in my view, are creating a bullish wave that is completely underestimated for the next uh three years. You know, last year we saw a lot of interest and a lot of upside volatility driven by mostly individual self-directed investors and in my view now during this whole bear market all of the companies that we just mentioned we are putting all of the cables in place with the financial institutions the research reports from the investment banks you know sometimes they are criticized online because You can say, but they publish that report and they say that it is a buy signal at uh each price and so on. But people don't realize that when one specific broker that has access to 10,000 different asset managers publish that report, overnight, those 10,000 asset managers, they now have the right to buy the stock overnight. And so then overnight, the investment bank part of the financial institution now can also much easily uh market the issuance of new securities because a lot of institutions they cannot allocate to a new security unless there is already research being done on the stock and all of these things will compound all together and you cannot see the effects right now in the bear market. because institutions tend to sell when the market goes down and tend to buy when the market goes up. Because they have literally a one month reporting requirement that they cannot lose money over one month basically. So when the market is going to get back up in Bitcoin and we are already seeing that with Bitcoin being up 10 % while gold is down 10%. We see that that consolidation is happening, that rotation is happening. When we get back into a bull market set up over the next year or so, we are going to see things that we have not seen before in terms of flows in the companies, in terms of institutional participation. For example, Amundi already has the largest asset manager in Europe, the equivalent of BlackRock. in Europe based in France has already in the bear market taken positions into Bitcoin related things and strategy. Imagine what will happen when the bull market goes back. And imagine, and that's a consequence that people completely underestimate. Four years ago, all of the investment bank leaders that we were talking with, they were like at the innovation side of the bank. And now, Four years later, they are heading the department. They are the heads of the department. And now, in my view, when Bitcoin goes back towards 100k, 200k, 300k and towards 1 million, those people will run the bank. They will actually run the bank because they will be the heads of the most profitable and the fastest growing departments of the bank because they will be the ones that have been doing the Bitcoin related activities and they will be promoted much more and they will have positions that will enable things that we cannot even imagine today. Imagine from, you know, five years from now, imagine that every CEO of every systemic bank is like Larry Fink promoting Bitcoin on national TV and going on and saying that there is this new ETF to get a location to digital credit and this new ETF to get a location to um different types of Bitcoin treasury companies and so on. That will be completely massive and we will not be even close to the level that we are right now. It will be orders of magnitude different and it will completely change the configuration of the market. When Andrew was saying three years from now, five years from now, We are literally uh one bull market away from escape velocity here.
Absolutely. And I'd be remiss if we didn't mention your chart as always. I got to bring this up whenever I'm talking with you, Jesse. uh Alexandre keeps me really bullish and he gives us a perspective over the next three to five years of digital credit and Bitcoin uh attention exploding. Where do you see a lot of the capital flowing over these next three to five years, maybe in this next bull market flowing into Bitcoin?
Yeah, so that's why I'm so excited about Bitcoin and treasury companies. em You know, Saylor's been using this chart for a handful of years now to tee up the opportunity for Bitcoin. But I didn't really understand why he put it so front and center in his presentations until about a year ago when I realized that, you know, the preferred equities that they're rolling out were designed to tap into the bond market here, the fixed income market and the money market. with stretch, stretches really kind of taps into at both fixed income and money market. um But what a Bitcoin treasure company is, and I have a version of that that I've built out to visually represent this, what a Bitcoin treasury company is, in my metaphoric view here using this chart, is a capital pump that is designed to find capital in these TradFi buckets, equities, bonds, and money. and offer that capital a more compelling value proposition than what it can get with TradFi assets. uh And the Bitcoin treasury company takes that capital and buys Bitcoin with it. um And in return to that capital offers it, know, in the case of stretch, here's your 11.5 % fixed income that's better than anything you can get, risk adjusted in the TradFi uh analog asset. fiat asset, whatever you want to call it, world. um So, you know, where's the money coming from? Well, the entire story of Bitcoin to date has been an osmotic flow of... value from these existing buckets into Bitcoin as people individually learn about Bitcoin, wake up and think, you know, why am I holding all these, you know, 10 year US treasuries? uh I'm probably not even making any money in real terms, given that inflation is probably higher than stated. uh And I should maybe sell some of that bond portfolio and move it into Bitcoin. That's been the entire story of Bitcoin adoption over the last 15 years. And yeah, there we go. And going forward, I think this is a real accelerant. I guess I've described it before. I think this is the plumbing of hyper Bitcoinization. where instead of relying on individuals waking up and realizing, should probably own fewer bonds and more Bitcoin. Now, you don't need those individual moments of realization. Instead, strategy is going out and saying, here's 11.5%. Are you interested in that? ah Within the mindset that you have as a fixed income investor, great, I'll take that capital and I'll buy Bitcoin because I've already done the work on Bitcoin. I already have conviction. And now that capital flows into Bitcoin by way of a Bitcoin treasury company. So I think that's the story for the next 10 or 20 years of how Bitcoin will tap into all of that capital that should be in Bitcoin. My thesis on Bitcoin is that's the place to be, but it's hard to get people to wake up and make that own move on their own part. But that's what a Bitcoin treasury company facilitates. These are the capital pumps that will accelerate the flow of capital out of these, the fixed income money and equities buckets and into Bitcoin.
I love it. Great stuff. And we do have such exciting times ahead. uh know, Bitcoin and it's people, people look back and sometimes uh maybe long, nostalgically for the early days of Bitcoin. But, know, the digital gold rush is, I think, just beginning. And it's super exciting to see what these Bitcoin treasury companies like SmarterWeb, like Capital B, are going to be doing. And I'll leave the last word with you, Andrew. uh Tell us, tell us why you're bullish.
Well, I think the most important thing to say from my own personal perspective is that, you know, this is happening right now. If we look back over the last year and we think about how Bitcoin treasuries companies have changed, you know, we've all been building, you know, our balance sheets on digital capital. So what's going to happen in the, very near future? Well, many of us are going to build out into digital credit, taking Michael Saylor's lead. People will build digital money on top of that. You know, this amplification of the balance sheets is is not only going to amplify all being well our share prices and our individual companies, but it's going to amplify Bitcoin, it's going to amplify the price of Bitcoin, it's going to amplify it beyond what anyone can ever see right now because I don't think the market understands the consequence of the digital credit products and what they will do fueling that capital back into Bitcoin. You know, I would say that the future is very, very exciting, but I'd say that right now is very exciting and the future will be here a lot quicker than most people realise. If you sit down and you do the maths, it will blow your mind.
Very well said. Super exciting times ahead. Thank you so much, Andrew Webley, Jesse Myers of SmarterWeb, and Alexandre Laizet of course, of Capital B. We'll see you next week on the Bitcoin Treasuries .NET Roundtable.