About This Episode
The crew kicks things off with Strategy’s latest moves and what they could mean going forward. They then discuss the milestone of the 20 millionth Bitcoin being mined and what it says about Bitcoin’s supply schedule. The back half shifts to a broader conversation about the speed at which AI is advancing.
In This Episode
- 00:03:50 — Strategy’s Latest
- 00:13:25 — 20 Millionth Bitcoin is Mined
- 00:37:45 — The Speed at Which AI is Advancing
Episode Summary
Key Themes: STRC scaling; digital credit + common equity flywheel; Bitcoin scarcity; product/market fit; private credit stress; AI disruption; mispriced risk.
STRC Scales in a Bear Market
Jeff said Strategy’s $1.28B Bitcoin purchase—funded by MSTR and $377M raised on STRC—shows that digital credit is scaling aggressively even deep in a bear market. He added that STRC’s trading volume massively exceeds traditional bank preferreds (like JPMorgan’s) despite being only 8 months old. Joe noted the importance of STRC holding at or near par through a ~50% Bitcoin drawdown, which was exactly the stress test many doubted it could survive. He added that, by funding the purchase via MSTR and STRC together, Strategy generated a positive BTC yield while maintaining the same level of amplification, thereby not materially increasing risk. Pierre said that assumptions that Strategy’s accumulation model would break in a bear market by struggling to raise capital were put to rest as Strategy is still attracting demand, including via STRC, which was helped by its cash reserve and transparency.
Digital Credit & Common Equity Working Together
Jeff reiterated Joe’s point about amplification/risk remaining unchanged by raising digital credit and common equity together. He said that symbiosis benefits both by preserving credit quality while still accreting to the common. Joe framed it as having two complementary treasury strategies: a “slow money” strategy (maintaining amplified Bitcoin exposure over time via digital credit) and a “fast money” strategy (where common equity raised at a premium can generate BTC yield instantly).
20,000,000th Bitcoin Mined
Pierre commented on the milestone of the 20,000,000th Bitcoin being mined, which is 95% of the total supply. He said that simple supply & demand suggests that less supply will increase price over time, but that cycles are now increasingly shaped by when OGs choose to sell rather than miners adding significant new supply. Joe said that even though the halvings are more significant, reaching 20 million Bitcoin mined was a meaningful milestone that reinforces Bitcoin’s unchangeable scarcity. Jeff emphasized how little only 1 million coins remaining to mine is against a backdrop of significant institutional accumulation by Strategy and BlackRock’s iBit that are approaching holdings of 1 million coins themselves.
Product-Market Fit of Digital Credit
Joe said digital credit is an easier fit than Bitcoin for most corporations that don’t want to hold a volatile, long-duration asset directly, and for most people that just want simple, risk-free income. Jeff used Standard Oil as an analogy for companies like Strategy and Strive that act as a “transformer,” converting a volatile, raw commodity (Bitcoin) into a more consumable product (digital credit). Pierre agreed that most boards are too risk-averse or incentive-misaligned to hold Bitcoin directly, making digital credit easier for firms holding large amounts of cash to hold on their balance sheet. Jeff added that insurance companies may be a natural fit for digital credit because their traditional bond portfolios are increasingly mismatched with inflation and future liabilities.
Private Credit Stress
Jeff pointed to BlackRock halting withdrawals from a private credit fund as a reminder that traditional credit instruments are not as transparent and liquid as investors assume, making them hard to exit at scale, while digital credit is far more transparent, liquid and scalable. He added that as digital credit proves itself, traditional credit’s cost of capital will eventually be repriced. Pierre said that the private credit bubble formed partly because Dodd-Frank pushed risk out of the public banking system, and that it then became momentum-driven and may be nearing its end. He thinks the next iteration of private credit could involve more equity and first-loss capital so that underwriting is more conservative, though a downturn could still cause losses and lead to more money printing.
Bitcoin Stays Scarce Amid AI Deflation & Monetary Inflation
Joe said that as the fiat supply keeps growing while AI simultaneously makes goods and services more abundant, Bitcoin’s absolute scarcity stands out more and its well positioned to appreciate over time. Jeff said AI is advancing so fast that even veteran engineers can’t fully verify what it produces, which he sees as a major shift for white-collar work and potentially influential on Kevin Warsh’s approach to monetary policy. Pierre added that even if AI lowers prices in some areas, the large federal budget still relies on printing money, so major deflation would likely trigger more intervention and money printing.
AI Disruption Will Reshape Corporate America
Joe and Jeff reiterated that AI is advancing so quickly that it will likely disrupt already inefficient white-collar work and make slow-moving mega corporations more vulnerable, even as it creates new forms of gig work and opportunities for leaner businesses. Pierre was a little more optimistic on jobs, saying that AI could create demand for AI implementation and management, but that it will likely still benefit consumers more than shareholders. The group ended the conversation on a note of optimism on both Bitcoin and AI amid uncertainty.
Main Takeaway: Digital credit is proving it can scale and survive the stress of a bear market, while private credit shows signs of stress amid AI-driven uncertainty.