So we joined up with the Trump brothers. Eric Trump joined as a co founder, chief strategy officer. Donald Trum Junior came in as an investor and advisor to really create that distinct American brand in the bitcoin space.
It's interesting sort of where we see bitcoin ad and why billionaire real estate developers seem to be abandoning the real estate and coming over to bitcoin.
It's a heck of a lot less work to accumulate bitcoin than it is to build enormous hotels and golf course developments.
You have President of the Free World, you know, Donald Trump, buying bitcoin and the Trump family buying bitcoin, and then you still have like your cousin down the street telling you it's like a scam.
What bitcoin is offering is a much easier way to store value and store the efforts of your labor into a commodity that, over time is becoming more and more valuable.
How do you approach thinking about building out the infrastructure.
For America with bitcoin mining?
There's really two kinds of infrastructure we're building out. There's the physical infrastructure of the mining, and then there's the financial system infrastructure that you might find with bitcoin treasuries.
What's their experience, like trying to build this infrastructure out right.
Now, this is something that unfortunately.
All right, Matt, I'm excited to dig into this day. Thanks for taking the time to come and speak to me.
Great to be here. Excited for the discussion.
Yeah, I mean, we were just talking about Texas and Austin, which obviously you're headquartered there. Sort of like the bitcoin mining capital of the world, I guess, but I want to I want to kind of get understanding from you, sort of how you're looking at the world right now. It's pretty interesting what's happening from a macro standpoint. JP Morgan is talking about this debasement trade golden bitcoin. Then we have this renewed interest in building the infrastructure of
the United States with bitcoin mining obviously. Then there's this whole sort of new trend of companies buying bitcoin of the balance sheet and treasury. So there's a lot of fun stuff I want to cover with you. But let's just talk about for a second. Since we were just talking about Texas, why are you in Austin. Why are all the bitcoin miners in Austin or in Texas? What's going on there?
It's a great question. So I've been in Austin now actually for five six years now, pre pre bitcoin mining. Actually I moved here initially I helped build COVID testing infrastructure for this state government. So we were doing at the time, my partners and I a bunch of COVID laboratory work, building big, heavy infrastructure to help support country
and need. And yeah, I realized how much I love the dynamism here, the ability to build, the ability to grow, the responsiveness of the government to making sure that private enterprise can thrive. And so when the opportunity came to build large scale bitcoin infrastructure with at the time US Bitcoin Corp, it was a chance to seize the moment and repeat a lot of that same playbook that we'd crafted for a healthcare and apply that to heavy in for a four bitcoin so hut eight. Our sister company
is actually headquartered in Miami. So in many ways, there are two crypto capitals in the United States. Of the New Cities, there's a there's a Miami style, a bit of the sizzle, and then of course you've got Texas which.
Is as well. One is crypto and one's bitcoin.
Are I think you're exactly right. I think I think Texas is the bigcoin.
Help.
Yeah, okay, So you mentioned the sister company, HUT eight, so you're a spin off of HUT eight. I thought HUT eight was a Canadian company, right.
So why don't we rewind the clock a little bit?
So?
US Bitcoin Corp. Was a company founded in twenty twenty. I was the chief commercial officer there. With my partners Mike and Asher, we grew US Bitcoin Corp. To become one of the largest private bitcoin mining companies in the United States. Several years later, we decided to merge that company into HUT eight. It was a great partnership. The HUT eight team, which was Canadian, had a great bitcoin hoddle,
which is over a billion dollars worth a bitcoin. Still have that on the balance sheet, great cabern markets, good brand name, and a really exciting partner for what we were able to bring operationally. So we merged with them and what at the time was one of the largest mergers in the history of cryptel And in that merger, we reflagged the company to an American company and moved the headquarters from up north in Toronto down to sunny Miami, Florida.
Okay, okay, okay, So I wondered about that. Was that right around the same time I believe I saw announcements, you got some of the one of the Trumps, I believe on board.
That's exactly right. So fast forward a bit. We'd already merged USBGC into hot Eate and created sort of a more key publicly traded bitcoin and energy infrastructure company. But as the old expression goes, there's really only two businesses in this world. There's bundling and there's unbundling. And the time had come to unbundle a lot of this bigcoin emphasis into a pure play brand that became American Bitcoin. So we joined up with the Trump brothers. Eric Trump
joined as a co founder chief strategy officer. Donald Trum Junior came in as an investor and advisor to really create that distinct American brand in the bitcoin space.
Got it? Got it?
Do you still have the mining facilities up in Canada or have they all been also moved down to the United States.
We have moved the majority of our hash rate to the United States. There's so much opportunity to grow here. I think that the Canadian enterprise, it's good. It's been a nice in many ways. They've joked that it's our fifty first state, so we appreciate that hash rate. But we've really been growing our operations here, especially in Texas as we chase great opportunities and sort of fresh builds for the American Bitcoin team.
Yeah, now let's talk about sort of this environment, this macro environment that we're in right now with bitcoin. I kind of said earlier in the sort of that intro lead up that JP Morgan just sort of came out with what they're calling the debasement trade, and they're saying what sort of bitcoiners have been talking about for ten years, that governm's always going to debase the currency, so we
should buy hard assets, gold and bitcoin. But I think it's interesting specifically for you because you've brought two of the Trump sons on to your company, and it's interesting sort of where we see bitcoin ad and why billionaire real estate developers seem to be abandoning the real estate and coming over to bitcoin, which I think is pretty interesting.
I think people should be paying attention to.
Oh, you're exactly right, So bitcoin is this really attractive store value. So a lot of folks are appealed. Real estate has a lot of appeal for folks if you think about storing value and it's their nest egg, and people are investing in their house and maybe some rental properties. What bitcoin is offering is a much easier way to store value and store the efforts of your labor into a commodity that over time is becoming more and more valuable.
So as people get excited about buying real estate, a lot of them are realizing that whole on this might actually make more sense as of bitcoin trade. And so it's no surprise to me that a family that's so steep in real estate development would see dpeel of what we're doing. It's a heck of a lot less work to accumulate bitcoin that it is to build enormous hotels and golf course developments. Now, building a bitcoin mine is
quite a lot of work. So we're still putting in the effort putting steel in the ground, but it's a different sort of mission with a different sort of output.
Right. But they've been getting involved in all types of bitcoin businesses, so from bitcoin treasury companies, bitcoin mining companies, you know, bitcoin exchange, right, so almost like spreading their tentacles. And as I said, I think I think it's worth noting, and that's why I wanted to bring it up. You know, you still have interesting enough right where at this time where you have Larry Fink, head of black Rock, the largest asset manager in the world, saying to buy a bitcoin.
Paul Tudor Jones has been all over the news for years and now this week again about buying bitcoin, and you have you know, President of the Free World, you know, Donald Trump buying bitcoin and the Trump family buying bitcoin. And then you still have like your cousin down the street telling you it's like a scam.
Yeah, there's an old quote where the Gibson about how the future is here. It's just not evenly distributed, and we're starting to see that happening in real time. I remember five, six, seventy to ten years ago trying to explain to folks about Bigcoin as an inflation hedge, but that was not really getting a lot of attraction. People would patiently tell me, you know, Matt, we don't really have that. Inflation's calibrated two percent a year. We've kind
of solved for that here in the United States. What's really the appeal to any sort of inflation hedge and then now here you and I talking about debasement in real time, and it's suddenly that inflation hedge is looking pretty compelling.
Yeah, well, I mean, sure, what's wrong with two percent inflation? Well, other than losing ten percent of your wealth every five years, I mean, sure, nothing. I guess I would rather not lose ten percent of my purchasing power every five years.
But maybe I'm just maybe I'm simple minded. I don't know.
And of course it's not two percent. I look at inflation as the rate of that monetary debasement, right, And so you can look at the money supply. The USM two supply has increased by fifty percent in the last really forty percent in the last five years. And how much is gas up, and how much are homes up, and how much is stake up?
And how much is gold up?
And right, everything's up forty fifty percent, right, So I think that's the real number. But I think it's I think it's exciting not just for the debasement trade, the store value, but now all the businesses, all the industry being built out, and you talk about building infrastructure. So right now it seems like the Trump administration is really focused on making America great again, making America investable again, making America build again, and so building out the infrastructure
is a big piece of that. How do you approach thinking about building out the infrastructure for America with bigcoin mining.
In America, there's really two kinds of infrastructure we're building out. There's the physical infrastructure of the mining and then there's the financial system infrastructure that you might find with bigcoin treasuries. So the Trump administration has actually been fantastic for both of those. So to the mining side of the business, we have a pro energy government. We've got folks that understand that we need more energy and we need it now.
We need generative capacity, we need better transmission lines, we need more sophisticated forms of off taking. We need to be able to trade around peaks. These are all things that bigcoiners and bigcoin miners have been swimming for years. So having an administration that's genuinely bullish on the electron it's good for us and good for what we want to deal on the power side. On the treasury side, there's a whole host of financial infrastructure that's also getting
built out in real time. Earlier this year we saw the Genius Act get through the government. That was a fantastic piece of legislature. There's a few more market structure bills that are in the works. These to me are seminal texts. These are the sorts of laws that they're going to look back on the way that oftentimes securities lawyers look back on the nineteen thirties as the cornerstones of what created the American financial system. We're doing that over, but we're doing on a blockchain.
Yeah, some of the things I saw Trump doing in some of the executive orders that he put through in these initiatives that he started this year was also in part of trying to really kind of reindustrialize the United States, was to peel back a lot of the yellow tape, the red tape that sort of bogs all of this growth down. Experienced that I mean, as any of that helped you, what's their experience like trying to build this infrastructure out right now?
So if you look at past administrations, we'd same as everyone else. We're dealing with the fairly hostile environment. And it came to opening things like bank accounts. You would be one day doing business, in the next day being told that you frankly weren't welcome and your money was stuck, and so we were somewhat victims of our own financial system as Americans. This is something that fortunately has really stopped that operation showpoint era is over, and we're better
forward as a country. So those permittings and that chokehold that they had on the ins and out points of crypto were pretty serious and things that really slowed down the ability to build this industry here in the United States, And now that that's been rectified, we're obviously seeing so many of the jobs and so much of that energy coming back stateside.
Yeah, so when you think about I mean just a couple of things that we framed up already, I mean from the debasement, trade people waking up to that, the Trump administration, the Trump family getting into bitcoin, which is obviously a big signal. I think they probably know some things we don't have access to, so probably pretty bullish on its own. You look at the political headwinds that have turned into tailwinds now and are lifting this space up.
So I'm curious from that macro standpoint, we look at a bunch of different factors, like what is your like, what are you looking at bitcoin. What do you sort of think is this bull case scenario. What are you expecting over the next five ten years?
Bigcoing on for is the average American this off ramp from the FIAD debasement situation that really before there was no good outcome. Your options were other FIAD currencies, real estate, as we've discussed, you could buy some shiny rocks. You know, Gold's been on a bit of a tear itself. Yeah, there's really nothing great about that is when it comes to a good store value in something that has a
compelling use case or financial future for the country. I'm happy that the gold folks are feeling vindicated, but gold, to me is not an optimistic trade that is investing in this sort of pre monetary system as an escape from modern day society. And look, well, I'm glad folks have found a story value that works for them. Bitcoin offers all that and more and more and more people are seeing the value of having their money or their their hardware stored in something that has that fungibility, that
ease of transferability, that verification on the blockchain. There's a lot of value add to bitcoin above and beyond what the goal or the gold premium would be for stoare value, and that's something that I only think is going to increase.
Yeah, So when you think about, you know, mining bitcoin, how do you approach the actual bitcoin that have been mined. So I'm just curious like what your strategy is. Is it like we're selling this for revenue cover our costs or do you have some sort of strategy maybe with your shareholders a capital that you've raised that allows you to hold it for the long term or are you sort of more like opportunistic and maybe you'll sort of
like buy and hold around cycles. I'm just kind of curious what your viewpoint is on that.
American Bitcoin benefits from having that mining business pretty big twenty five eggs as today, scaling from there, and also a treasury component. So we haven't sold a single satoshi since we all this to the company in April. To your point around financial structure, we actually have access to a multi billion dollar at the market offering vehicle that we're able to use strategically to raise money to buy
more bitcoin to cover some of these expenses. So we really haven't dipped into the till when it comes towards liquidating satosis and paying for things, and that's not something that we foresee doing for us. Bitcoin is the end all bl is what we're really geared towards accumulating, and as we think about our north star of bitcoin per share, I'm not really interested in things that would reduce the bitcoin per share that I can then offer my shareholders.
So then your publicly traded a bitcoin mining company is quite a bit different than what you might see with others Mara or Riot or something like that. Whereas they're mining bitcoin, they're selling the bitcoin. Maybe some of it they keep, but your policy is to get more bitcoin, whether you mine it or you buy it.
Our attitude is that investors in a bitcoin mining or a bitcoin treasury company really want one thing, which is maximum bitcoin. So oftentimes I really refer to American Bitcoin as a bitcoin accumulator for that reason, we're accumulating bitcoin. It's that sym well, some of our they may want to sell, or they're trying to be strategic and trade around it. My version of strategy is dollar cost averaging into the hors asset on Earth. I'm not really interested
in selling. I think that the energy arbitrage aspect is interesting, but for me, that's just one part of the operational discipline to grow your stack. So I'm very mindful of things like s and a very mindful of the cost of power per month, curtailment, trading energy, things like that, but really only in so far as it allows me to hoddle as much bitcoin as possible.
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I mean, that's pretty interesting because as far as I'm aware, I mean, all of the public trade bitcoin miners are more like gold mining producers, if you will, right, So they get in the raw asset, they kind of do what they do, you know, do with it and then and then they sell it back into the market. So the bitcoin miners bring it in, they bring the bitcoin in existence, they sell the bitcoin back into the market.
But your bitcoin mining company is not that your bitcoin mining is your Your bitcoin mining is part of a bigger strategy correc of a bitcoin accumulation engine and the bitcoin. The bitcoin mining is one component of that business, but the overall strategy of the over riding business is to accumulate bitcoin.
Well put, for us, the bitcoin mining is a way to accumulate at a discount. I want as much bitcoin as possible, as fast as possible. If there's a means for me to get it at a fifty percent discount, I'm going to do that as long as I can, as fast as I can. And that's what mining represents to us. It's this way for us to turn energy
a bitcoin we can go buy spot. So the things the treasury companies are doing, preferreds and converts and atfs, these are all great financial instruments and each has its own place. But to my knowledge, the only way to accumulate any bitcoin at a structural discount is to mine. So we struck the ground and we've been building big minds.
Yeah, that's interesting. Now what are you seeing right now in the performance of of the discount I should say the discount to mining bitcoin because a lot of people would look at some of these bitcoin mining companies, the public ones, and I mean actually the last couple of months, the stock's been doing pretty well on most of these publicly traded bitcoin minors. But for the most part, you know, last couple of years that hasn't really been performing that well.
It looks like their costs are so high it's not that profitable for the mining bitcoin. What is the profitability like to mine bitcoin right now?
So when it comes to the profitability of mining bitcoin, I would really pull American Bitcoin out from our peer group. And here's why. If you were starting a brand new bitcoin company today, a new bitcoin mine specifically, you're really wanting to really buy only one thing, which is the machines, substations, transformers, electrical gear, concrete, all of that. The return of capital, a return on invested capital, I should say, is not
that compelling. It's really going to come down to the machines and being asset light and then also having as few staff as possible that are pulling away from that expenditure onto the eggsash. So when we were putting together the American Bitcoin model to begin this year, we thought we were almost reimagining what a successful bitcoin mining company would look like. So for a peers to your point, there's somewhat of a net drag. They have a lot
of full time employees, there's very high overhead costs. They're not really watching construction costs the way we had but we were able to divide our core competency into the mining side, where we own the machines that's American Bitcoin,
and then the building and development, which HUT does. And unlike other miners where they either need to vertically integrate fully in their own business and then they're paying all the costs of everything all the time, or they're working with the hosting provider, in which case someone else is trying to charge the margin. We've got a nicely aligned relationship. It's not antagonistic, it's cooperative. HUT wants us to grow where their customer first resort when it comes to bitcoin.
They would love to see us take one, three, five, ten gigawatts of bitcoin mining off take. And for us, we see HUT as a great partner. That's a team that's already proven that that they can build these massive facilities. And HUT eight is not really looking to get bitcoin returns. They want energy development returns, they want energy infrastructure returns, and that suits us just fine on the bitcoin side.
Got it.
So you're leveraging HUT to then sort of host and run that for you, so then you don't have all that initial capex investment. That to your point creates that drag and it's so hard to get back to a profitable state from you can buy the machines, deploy the machines, have them running without having to invest that, and then just give a small percentage of the revenue back towards HUT to help them offset their capex investment.
Precisely, My goal here is what they call lemonade, stand economics energy and has your go in bigcoin comes out. We hold a bitcoin. Not really interested in complicating that with a lot of other construction calls and things like that. It should be very streamlined, and that's just the way I like it.
Yeah, I just I just recorded a video. It hasn't hit my YouTube channel yet, but talking about Trump's one big beautiful bill and the bonus and accelerated depreciation that got renewed thankfully, and how you can take one hundred percent deppreciation in year one, and how a bitcoin minor.
Is a computer equipment that depreciates.
Over a five year period and so you can buy that bitcoin minor excel the depreciation for year one and it works out pretty amazing to write off that taxable income. And of course I talked about doing that and through like a hosted minor. Most people, I mean, especially be in California. I can't run a minor at my house. My power is way too expensive for that. But from a personal standpoint, when I do the math, I mean,
it looks very attractive. I'm assuming you're just doing the same at massive scale.
That's well point for us. The bonus appreciation is one technique or one allowance from the government among a host of changes that we've seen we hope to see that make our industry much much happier here in the United States. The bonus depreciation for us, it's good. I'm pro any policy recommendation that's going to bring the jobs and hash rate here to the United States. The depreciation, whether it's for a hosted peer of ours or for ourselves. To me,
this is fantastic. I'd just much rather a hash rate be here in this jurisdiction than overseas in some autocratic country. And yeah, the bonus appreciation is a good part of that.
Yeah.
Now, when I think about bitcoin treasury companies, we talked already about the goal of trying to get more bitcoin, right, increase the bitcoin per share that they have. You mentioned that mining bitcoin's only a way to get discounted bitcoin, especially compared to like doing preferreds or something like that. Maybe I mean they're they're going to pay out of ten percent of that they keep they keep the spread.
I guess they ARBA charge on that.
But I'm I guess I'm curious, Like when I think about bitcoin treasury companies running a business alongside of it. Typically I think of that that treasury company deploying capital into a working business as a less efficient way to spend the capital.
Most businesses don't.
Do a fifty percent profit margin, and so to beat the hurdle rate of just buying bitcoin, it seems like I'm destroying capital by putting in any business, not just a bitcoin mining business, but any business.
I mean, no business is doing a fifty percent profit margin.
So I'm curious how you look at that, Like, I have money came in, Should I buy bitcoin or should I buy more bitcoin miners? And which one is actually more creative to my business?
This is something that we think about every day in America bitcoin. Where to put that dollar for the marginal boost in hoddle. Sometimes it will be miners and sometimes it will be spot. It's really going to depend on quarter to quarter, week to week, where's hash price at today? Where our energy costs today? If I spend Fiat dollars to buy those miners, am I going to earn back or mind back more bitcoin relative to what I could buy today. It's actually a dynamic calculation. So there have
been periods where we bought Spot. So we did a large minor purchase earlier this year. That was we believe in net a creative and strategy to us, but we'd also explore Spot buying. We've participated in the markets in that front as well. It is certainly a quarter to quarter thing, and you'll actually see as we grow involve as a company, you'll see us doing one or the other and that will give you some sort of indicators
to where we see the pub going. For us, the key thing on buying machines is to not get you fork, don't chase. That applies to buy Spot and applies to
buying machines. We want to make sure that we're not putting money into large orders when we believe there's going to be a cheaper machine opportunity on the horizon, better hash rate, etc. You saw a market increase in efficiency over the past two years we kept our powder dry at us Biccoin Corporate and Hot eight, and then now with American Bitcoin, we've put the machines into play here
that are really future proofd for that next having. And so if we're gonna think about the having, and by the way, it's maybe in two and a half, you know, three years or so, I'm already still thinking about how are we going to make sure that our mining business can weather that storm. You really do have to be very thoughtful about where you'rechoosing to deploy capital. One thing
that you mentioned is putting money into other businesses. I would stress that at American Bitcoin, we're really only interested in companies that are on the Bitcoin standard. I don't know how to run those other kinds of companies. I mean, there are aspects of them that I think could be net a creative. I would certainly look at any deal that would bring more bitcoin to our balance sheet, but it really needs to be part of our core thesis.
I wouldn't want to limit myself, but I also want to make sure that I'm not spending a lot of time, in a lot of brain calories on something that is not really related to over core competency. When I was a consultant banded company. It was a line you'd always use about the importance of profiting from the core. And for us, the core is bitcoin, whether that's bitcoin mining, whether it's
the treasury strategy work, and some harnsing that volatility. Let's let's stick to what we're good at and be very thoughtful about expansion.
Yeah, I mean it say, you know, stay within your core competency is what Warren Buffett would call his deal box, right swinging at the ones I know that are going to have a high chance of completion.
That makes sense.
And I was just saying in general, just in business in general, is very rare to find any business, whether I'm a Bitcoin standard or not, that's going to have a fifty percent return.
Agree, So that that's kind of where I put the hurdle rate for bitcoin.
So it's like, huh, if it can't get And even if you bought a business that's twenty five percent, I mean, I guess technically that's still a creative, it's just less accretive. And so I guess is what you're saying, if I'm repeating it back to you, is that every time you look to deploy new capital, you're just sort of looking at those and deciding which one is gonna be the most accretive for the business, and you make your decision and based off of that.
Correct, we are looking for things that are the most recreative in bitcoin terms. Again, for us, the north start here is bitcoin per share. So if I look at these deals and I think, hey, this is going to result more bitcoin, then we started out with I'm interested. But to your point, that's a very high hurdle. There's not a lot of businesses that have that bitcoin trajectory. And you know what if that means that we stick to bitcoin, I'm cool with that.
Yeah.
So you're acquiring bitcoin, you're building bitcoin, you're mining bitcoin, you're build up that bitcoin base. What is then the next stage of the business. So you build up your bitcoin base and then what you mentioned, some of the bigcoin treasury companies are doing preferreds or some other types of securitized instruments on top of the bitcoin sort of what's the strategy that you have or you see forward.
There is a layer in fact beyond that one. So our business actually has three layers. Layer one is the bitcoin mining. That's our core competency. That's effectively accumulating bitcoin into fifty percent gross margin. Layer two, that's the treasury strategy. You've seen some of our peers using all sorts of financial techniques. We're aware of them. We are strategically doing what we want to do grow a bitcoin stack through
the capital market side as well. But there's actually a third layer of this business, which is what we call ecosystem amplification. And there's really two ways I would position us for that. One is the American Bitcoin brand and getting out there and getting known as a brand that is geared towards pure play Bitcoin accumulation is somewhat of
a joke. Someone was telling me that when you search stocks, they can be alphabetical, and there are times where we search bitcoin and ABTC is above BTC, which sounds great to me. But we are offering folks that that bitcoin accumulation product that the market doesn't really have in the way that we offer are. There are ETFs that have one to once and that's that's going well for the black Rocks of the world, et cetera. There are financial
strategy companies. I mean, obviously micro strategy or not just strategy has pioneered a lot of those techniques. There are the miners, but for us, it's about taking the best parts of each. We want to be asset light like we believe the best miners are. We also want to be thoughtful about liquidity and volume like the best treasury companies. But this third level, this ecosystem play. That is where over the coming quarters I would like to spend more of my time. That is, what does an ecosystem on
the Bitcoin standard look like? Because bitcoin is to our earlier conversation, it's not gold. It's better than gold, it's different than gold. There is a lot of capital tied up in bitcoin. What are the things that we can be doing as a Bitcoin Standard company to support that growth? Is it financial services? Is it consumer facing products? Is it related to putting things at to bitcoin l twos
or do we want to start getting into swaps? What are the things we can do to get people using the bitcoin ecosystem Because all of that activity is net a creative to bitcoin, both in the abstract sense but also in terms of transaction fees, which routes right back to our mining business. So we're really trying to build a virtuous cycle here of mining and then treasury and then ecosystem, and collectively you've got a pretty unique accumulator among all these bitcoin companies.
Governments will never stop printing money, So inflation it's not going away. Now. If your money is not earning at least ten percent the year, you're losing purchasing power. Now, that's why I talk about bitcoin. It's the number one way to beat inflation and secure your future. And the question I get asked almost every day is where do you buy your bitcoin?
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own your money, and your money starts with bitcoin. When you think about the ecosystem part, is that like is that like, you know, maybe like a venture capital hold, old company private equity play where you're investing in supporting in scaling your said earlier, bundling unbundling businesses that support
the bigcoin ecosystem. Or is it more like you said financial services, where it's like, well, now we have this bitcoin on our balance sheet, how can we mobilize the bitcoin the balance sheet to get it to create yield?
Is it both or is it one or the other? I would argue the best of both. Right now, we're not looking at venture investments per se. I am, however, looking at things that could create operational streams of bitcoin.
So if there are opportunities for us to advance bitcoin to a group, or work with a group, or take a stake in a group and build their base, and that brings a stream of Satoshi's back to us, ideally there are already a bitcoin native business, or they're a business where I can quickly get them onto the Bitcoin standard that to me is really exciting has not yet been tried. What can we do to get more copanies
in the bitcoin universe working together collaboratively. Folks basically were building these products, and they say that first time founders are very obsessed with product and second time founders are obsessed with distribution. After US Bitcoin Corp. Now I've got American Bitcoin into American Bitcoin, I'm very very interested in distribution, which is, how do we get all of these cool technologies, all of these interesting layer one, layer two solutions or
bigcoin of products. How do we get those in the hands of the users? Because that's something that, frankly, if you look at the wider crypto ecosystem, was always a complaint. There were two questions I would get at these conferences. One is where the institutions and then the other, more perfect question is where exactly are the users of all of this stuff that's being built. My attitude is that American Bitcoin is that the next of both the institutions
are coming. They want bitcoin exposure. We're starting to see it, whether it's sovereign wealth funds, family offices, the big wealth managements, the ras. They are getting onto a bitcoin trade. Though, whether it's spot or through an ETF for working with an accumulator like us. The institutions are coming, the users are also starting income. They might not even know with stable coins and things like that that they're using a blockchain,
but the users are starting to appear as well. And so if we can find a way to take the benefits of both of these two incoming secular trends to the bitcoin world, it's going to be very beneficial to American bitcoin.
Yeah.
Yeah, I've been deploying venture capital into the bitcoin space now five six years. I'm a partner at the Bitcoin Opportunity Fund, and so we invest through the entire bitcoin ecosystem and.
We've we've had some really good, really good plays.
We tend to typically do things that are a little bit further stage, not early venture, but a little bit further along already kind of prove it out. But I kind of got to this point, you know, the last couple of years, where it's like we need less bitcoin products and more bitcoin in everyday products, right to like really really push that use case right and one to
the point that you just made one. I think it was just yesterday, Morgan Stanley sent out messages to their clients telling them they're going to start bringing in I think both bitcoin and ethereum for people in their in their Morgan stand account. So the rias the financial advisors, they're pushing that down.
That's pretty that's pretty powerful.
And then I think it just us last week, right, we've seen Jack Dorsey announce with Square quite a few things that they've integrated right into Square for the merchants to start putting some of accept bitcoin at no fee, be able to take a percentage of whatever they bring in, and whatever they want to set to go directly into bitcoin. And so we're seeing those things play out in real time. It's it's pretty exciting.
I think it's tremendously exciting. Timing is everything, right. We're hitting a point where the public not only is interested in bitcoin, but they're getting off of zero and they're showing up, and we need to make sure that there's the infrastructure to support them, whether that is financial products. Like you're describing more of this consumer work. I think the way you put it is so eloquent that we need we need more Bitcoin in everyday products or products
that day day users have. I think we're about to see that shift coming the coming quarters, and American bitcoin is going to be.
Part of that.
Yeah, Now you mentioned earlier like when you think about buying the bitcoin minors and making sure that the machines will last long.
Enough to get to the next halving.
So the bitcoin having cycle is something that in the bitcoin space we've talked about consistently about every four years, or not even really about like almost like clockwork. It seems like we have, you know, a peak and then a trial, and at that time the amount of new bitcoin be in mind every day gets cut in half. And a lot of people have said that that supply demand imbalance or shock or shift is sort of what creates these highs and lows in that bitcoin space or
in that cycle. There's a growing narrative that I tend to agree with that the four year cycle is basically dead and maybe the four year cycle was always a meme and it wasn't really about the four year cycle.
What's your take on that?
Well, Look, I think doing four year cycles on an asset that's not even twenty years old is a little bit aggressive, and certainly they don't have enough data points correct.
There have not been enough four year cycles to declare a four year cycle with any degree of empirical certainty, if I could be so humble as to say that, you know, there's something called hyperstition, which is when people believe something new existing, and the four year cycle is one of those phenomenon that where when you think about emission schedules and you think about the role that miners
playing the ecosystem, et cetera. There has been a grain of truth to it historically, and folks believing in the four year cycle likely precipitated more of a four year cycle. That being said, Bitcoin has had so many new adoptees and new investors and fresh eyes on it these days that I'm not sure people are as immersed in the lore of things like the four year cycle the way
they would have been in past bitcoin bull runs. So when you lose that shared belief among the new investors, coupled with the fact that miners now are only accounting for four hundred and fifty bitcoin per day at the current emission schedule, it does take a little bit of the machine off the four year hypothesis. So I'm inclined to agree with you that while it was perhaps a helpful heuristic historically, while we are on a run. I think that part of the industry maturing is that we
may be moving into a ten year supercycle. We don't know yet, it's too early to tell, but the composition of investors is certainly changing in a way that's probably making it a little less predictable than it used to be.
I think to the point you made, I think is very accurate, where people believing it to be so sort of almost then reinforces it to be so. And I see it all over people ask me all the time. I see it online. A lot of people think that they should not be buying right now, or they should even start selling right now because we're at the peak of the cycle, as if like it's just going to
happen on that day. And so to your point, that's sort of like this self fulfilling prophecy, like they're not buying or they're actually selling right now because November is always the peak every year, November, eighteen months after the having, and that could sort of force a sell off even if the sell off wasn't coming right. So that's certainly there now when the HAVING supply gets cut in half to your point, four um and fifty, it's not that much.
The supply demand and balance is.
So great, you know, between ETFs and treasury companies, institutions, it's somewhere it ranges five and ten times more demand than the new supply is being created. So you cut the supply in half, it's inconsequential. So for the average hoddler who's thinking about the price of bitcoin, maybe that kind of goes away. And I would argue that it's the global liquidity cycle that's in the driver's seat here,
that's the dog wagging the tail. And obviously, when we had the last peak of November twenty twenty one, we were in a different world. We had just seen record inflation. Jerome Powell came out in November announced he was going to start hiking rates, and the hike rates at the fastest rate hiking cycle in history. And today he's not hiking rates. He just announced he's just start cutting rates. So it's like we're completely different. And so for the
average hoddler, maybe the price stays up the same. But from a bitcoin minor perspective, you do have to be prepared for the for the emission as you call it, or the new inflation rate to be cut in half.
Yes, yes, so it's interesting that you bring an M two in Monteary supply as well as the FED rates. The FED rates are interesting from minders because again we build heavy infrastructure, so of course we're very mindful of debt and things like that. We we do pay some of our bills obviously in FIAT, and so we're very codis where FIAT is trading in what direction it's it's heading. The market is already a wash in capital, and so adding ray cuts is going to exacerbate that. Realistically, it's
this seems to be consensus. We'll see where that capital goes. It's been an interesting time because you've seen almost this U shape where I can't recall a period of time where gold is hitting all time highs and so is quantum. You know, this is an interesting bar Barbelle. You're you're you're seeing these flight quasi flight to safety ideas that are that are going to all time highs. You're seeing bitcoin here in ALTIMEI goldenre in all time high, silver,
all time high, et cetera. But then you're seeing quantum up, seeing flying cars absolutely ripping. You know, the the the the fringe risk on tech and the risk off assets everything is rising, which makes you wonder, to the point you've been making, if in it's just the dollar falling and we're really just seeing the impact of the basement. Because although bitcoin is an all time highs in dollar terms, bitcoin is not yet an ult time high in gold terms.
And I remember going on some media tours maybe three or four months ago, and some interviewers were new to bitcoin would ask me, you know, Matt, where where do you see this going? And I like using gold as a metric. I think bitcoin I can extoll the values of bigcoin is being far more useful than that gold is. But it's a nice benchmark. Gold at the time was at twenty one trillion and we were at two trillion, and it seemed like a nice ten x. Gold today
is around twenty seven trillion. Yeah, so we keep chasing this this high. So I guess that creates more of a headroom for for for bigger there's more, there's more room to advance to compare to the big brother of gold. Is that trad store value there. But time will tell to your point, if these if these cuts precipitate more of an uptick, or if people start realizing to your point that maybe we have at a peak.
Yeah, but how are you, as a bitcoin minor planning for the new supply of bitcoin being cut in half? I mean does I mean theoretically, I would just think back of the n appt in math that the price of bitcoin has to double if the supply gets cut in half for you to stay at the same profit margin.
There's no proverb that you can't control the win, but you can adjust your sales. So as we look at the having coming up in two and a half, three years, right, still always out, it's still always out. We'll be here before you know it. But we're already being cognitive. How do you adjust your sales? So, as we think about where we would choose to deploy capital, knowing that it would take some time to get the sites up and running, shorten the runway pre having, we need to be very
thoughtful about those expenses even today. These decisions made today will have decisions for quarters to come. So we're very aware of that and I already factor that into some of our CAPEX discussions. We have a roadmap to get to fifty plus eggs ASH if we so choose. That being said, as we look at the opportunity to just buy spot that could be compelling as well, so we're
constantly balancing the buying spot versus buying minor trade. The other bit of the why buy miner's trade that I think is relevant to your question is the last having, the literal day of the Having, by the way, was our best ever revenue day, for my best ever, we had transaction fees five six seven times what we were making in terms of the block subsidy. That to me was a four shock. So as they think about the next HAVING, I don't know yet what that transaction fee
volume will look like. But not only do I anticipate that Bitcoin will have doubled by the next having, even if we go through some sort of mini winter, I think the next HAVING is a pretty appropriate time for that doubling effect. You're also going to hopefully see an uptake in that transaction fee volume as well, so there'd be a double whaman. There's the need to get simply appreciation on the underlying asset, but if we can get any kind of increased velocity in the usage or the
utility of bitcoin itself, that actually rewrates the model. So rather than us sitting here and conjecturing about a four to fifty decline mathematically to two twenty five, just constantly getting machetied every four years. We start to wonder about what does it mean to own the future of what's effectively the swift network on Bitcoin, and what is the value accrule that a bitcoin minor or someone with massive amounts of hash rate would get from that network.
Yeah, speaking of fees from the network, I believe today, well, I don't know when this recording is going to go out, So at the time of this recording, we had the V thirty get pushed through from bitcoin Core. Great, and that increases the well at you know, the op size got put in as a template standard default, I should say, which has a lot of people on both sides of the aisle. It seems like one of the reasons they did that would pete to help miners create more fees.
What's your view on that whole debate.
You're making this stute observation, which is that with the adoption of this upgrade, miners do win. There is a likelihood that the transaction fear just the the amount of things that are described on the blockchain will increase. As miners we are almost a service provider or infrastructure. People want to go on the toll road. It's not my
business to ask where they're coming, where they're going. It's my job to process those transactions and really keep the toll road or that works safe so for us and secure so for us. I take a macro view that there are lots of developers on both sides of this situation. I see the merits to wanting to really restrict what bigcoin is for. But at the same time, I think a big part of the crypto libertarian ethos is letting people do what they want to do if they're willing
to pay for it. And so if people want to really take advantage of these adjustments that have just been made by the upgrade, we're going to support. Where the community is is indicating that it wants to go again. Miners, you need to remember, are very conservative. So for us, the most important thing is that the blockchain stays up, stay secure, is defensible against any sort of fifty one
percent attack. We think while we think spam is a problem, I think an even greater problem would be anything that we kind of jeopardize the blockchain itself. And unless we see increased transaction fee volume over the long term, that security budget is going to get a little bit tricky. So Net I'm open to the increase that we've just seen. Yeah, yeah, I mean unless it unless it hurts it long term. But you know, I do think that knots coming out. Although I'm not really.
A fan of either.
I wish we could sort of stay where we were, but I think it is a healthy free market action.
Well, let's try an alternative.
It is you.
You remind me of something, which is that you know, governments hate competing. They hate it when you go when you get a driver's license in California and I live and get a driver's license in Texas, those departments and motor vehicles are not are not competing really, which is why the experience is not always the best. The only place where governments historically have competed or the economics, and
then their defense budget and their defense industrial complex. And so what's been interesting about this from a bitcoin perspective is that your point, a little bit of competition in jets, a bit of rigor. So I'm glad that these discussions are being had. I'm glad that there's a debate back and forth. To your point, changes can be made they could be reversed or retracted if it was being seen as jeopardizing the ecosystem. You really want to avoid a monoculture.
That is somewhat of what we're trying to escape is this hegemony right, of this inability to get out of the Fiata basement situation. And so part of that is offering a competitive alternative, and for things like knots as an example, if they're willing to present an alternative, if people want to vote with their feet, we'll channel er inner cryptolibertarian and we'll see.
What they do.
Yeah, I've heard of a third one trying to get some legs under it, being run by a nonprofit that would run a third option that'd be more of like an ossified code base, and it would only implement extremely urgent critical patches and it would not do any improvements. So yeah, I'm all for the competition. That seems to be where I would lean like, let's not try to make things better. That's what Sailor has been talking about the best way to ruin something to try to improve it.
So how about we just if there's a critical patch, we can put that in. Otherwise, let's just leave it as is. I think layer two should figure out how to move around Layer one, not the other way around.
I like that. I like that a lot.
Man, we covered a lot of good ground. I think that's a pretty good spot for us to stop. Do you have any big announcement you want to make anything people should be watching out for, paying attention to what's happening this year.
Sure. So, look, it's a big year for American Bitcoin. We launched April first, we went public September third. That was a splash, but it was just the beginning for us. We're going to put in some really exciting quarters here now of growth. That was not a finish line, it was a starter pistol. So now we're out there. We're growing our layer one that's the mining, We're growing our layer two that's the treasury, and soon we'll be announcing
how we're growing our layer three, that's our ecosystem. So there is a lot to come. So I advise folks to keep an eye for the American Bitcoin story because there's quite a lot ahead.
Got it.
We'll make sure to link all that down on the show notes down below so everyone can follow along on Twitter and on their website. Now, with that we'll ahead and wrap it up. Thanks so much, up, thank you, Mark,