In this episode, Stephan Livera and Jad Mubaslat discuss the emerging trend of Bitcoin treasury companies, exploring the potential risks and rewards associated with investing in these entities. Jad expresses skepticism about the sustainability of these companies, particularly regarding their cash flow and financial engineering strategies. The conversation delves into the implications of convertible notes versus preferred shares, tax considerations, and the historical context of financial bubbles. Ultimately, both acknowledge the importance of self-custodying Bitcoin while considering the role of treasury companies in the evolving financial landscape.
Takeaways
🔸Jad Mubaslat expresses skepticism about Bitcoin treasury companies.
🔸The lack of cash flow in many treasury companies raises concerns.
🔸Convertible notes and preferred shares have different implications for investors.
🔸Tax implications can affect the market value of treasury companies.
🔸Market dynamics may lead to a winner-takes-most scenario in different jurisdictions.
🔸Historical financial trends provide context for current treasury company dynamics.
🔸Regulatory changes could impact the future of Bitcoin treasury companies.
🔸Investors should be cautious about the risks associated with treasury companies.
🔸Self-custodying Bitcoin is emphasized as a priority for investors.
🔸The conversation highlights the importance of understanding financial structures.
Timestamps:
(00:00) - Intro
(01:08) - Who is Jad Mubaslat?
(03:30) - Jad’s skepticism towards Bitcoin Treasury Companies
(08:39) - Who gets rekt?; mNAV compression
(13:02) - Sponsors
(14:55) - Convertible notes vs Preferred shares; Tax implications for investors
(21:42) - Strategy’s preferred share offerings; Risk-adjusted investment scenarios
(31:54) - Will BTCTCs continue to exist?
(34:24) - Will regulatory frameworks make it easier for BTCTCs to thrive?
(38:48) - What does the future look like for BTCTCs?
(43:23) - ‘Winner takes most’ & the end game for BTCTCs
(49:22) - Comparing Bitcoin Treasury Companies with the stock bubble of 1920s
(1:00:04) - Closing thoughts
Links:
Sponsors:
CoinKite.com (code LIVERA)
Stephan Livera links:
Follow me on X: @stephanlivera