Say hello to Jeff Walton, chief risk officer of Strive, among many other things, a Bitcoin treasury company.
Nice to have you here.
Thanks for having me.
Appreciate it.
Bitcoin pullback.
I talked about it at the top of the broadcast.
Every time I look, it's hovering around 60, 61.
Today it's under 60, 60,000, excuse me.
Healthy reset, something deeper going on here.
Yes, I, you know, I think the fundamentals are still really strong.
We're looking at underwriting Bitcoin to a long term.
Uh, compound annual growth rate right now today, Bitcoin is a few points under the 200 week moving average.
Historically, when Bitcoin is under the 200 week moving average, that's a really.
Good time to think about accumulating as much as you can.
So I'm going to take this in a bit of a different direction because I saw this on Twitter earlier today.
This comes from Dave Portnoy of Barstool Sports.
He said, Tell me why all the people who have always said Bitcoin is a scam and going to zero are wrong, because it seems like it's going to zero.
When people have those concerns, those sorts of questions, what is your response more broadly?
Yes, really, Bitcoin is capital.
What is capital?
Capital has a very loose definition.
I've Operated in the capital markets for the last 11 years.
Uh, my past life I was a reinsurance broker and, you know, worked with managing volatility of insurance company balance sheets.
So what we're doing is we're looking at managing the volatility of our balance sheet and managing, uh, the Bitcoin and how it's, uh, how it's moving into the future.
So really I, I think the fundamental thing that people miss is Bitcoin is capital and that capital can be used in many different ways, uh, whether that be yield generation strategies or. as collateral and that market is continuing to evolve.
Bitcoin is increasingly discussed along things like gold, bonds, and currencies.
What are you seeing in terms of increased institutional adoption and overall is Bitcoin being treated like much more of a legitimate macro asset class?
Yes, I think institutional adoption is still a little bit slow, right?
There's, there's a lot of volatility with the underlying instrument, as we can see.
It's down, you know, 55% from all-time highs, but you know.
Institutionally, the Basel risk framework, there's a 1,250% risk weighting on Bitcoin, meaning banks and insurance companies can't even hold the instrument.
There's no, um, there's no interest in leveraging against the balance sheet.
So as the market continues to evolve and the rules and regulations continue to improve, that should influence more institutional adoption.
In the meantime, we're creating and designing securities for corporations and institutions to get.
Uh, get exposure to the instrument within a lower volatility type wrapper.
I want to ask you about your new product.
How do you pronounce it?
Satatata.
Pardon me.
Most income products, of course, pay monthly.
They pay quarterly.
Seta, you're trying to go about doing it a little bit differently.
How does it pay dividend every business day?
What should people know here?
Yes, we are the first.
First company and this is the first security in capital markets history to pay a daily dividend.
Most companies that or the companies that pay a monthly dividend, there's only 2% of corporations that pay a dividend pay a dividend monthly, and we're now paying it daily.
This is, we're able to do this because we have Bitcoin on our balance sheet.
We have the assets already on our balance sheet, and we are underwriting.
That payment into the future.
So we are underwriting a long term compound annual growth rate of our balance sheet and we're carving off some risk return of the senior security on our balance sheet and giving that back to the senior holders between Bitcoin adoption, tokenization, the general conversation about stablecoin, where does all this go from here, you think?
Yeah, I, I think this continues to evolve, right?
The, the instrument that we've created and strategies created, so our instruments data strategies stretch, these are, these are less than 1 year old.
Uh, you, you, you can't, you can't make a baby in 9 months, right?
So this, this is going to, this is going to evolve as clarity provides a little bit more regulatory clarity on, on the asset in the industry.
Institutions will begin to think about how to utilize this asset, how to, uh, use it as capital and use it as collateral in the future.
I got about 30 seconds left.
What is Strive's thesis that maybe the rest of Wall Street isn't quite getting right right now?
Uh, our, our thesis is, uh, the, the debt problem in America is very difficult to solve, and it, the US debt to GDP is compounding at 3%, 3 to 4% annually.
The US monetary debasement is at 6.7% over the last 50 years in a row.
And our goal is to plug that, uh, plug that problem within financial markets.
Jeff Walton, chief risk officer of Stride, my man, thanks a lot for being here.
Thanks for having me.
