Well,

what about the Bitcoin Act? The idea that we might either reprice the gold that we own and then use that to purchase Bitcoin, sell some of our gold to buy Bitcoin. Do you think that that's possible?

I think it's possible, but unlikely with the current Congress. We may need one more cycle to, you know, get lawmakers from both parties on board, which is what it takes to get most legislation through Congress. The

gold bugs are so interesting. Sometimes I do shows and it'll be for an investing audience that has a lot of gold bugs and they are so negative about Bitcoin

still.

And it's sad to me because I feel like the principles and the values behind gold are so similar to Bitcoin. But when someone comes to you and they're new and maybe they see the value of something like gold, but they just don't understand Bitcoin, how do you explain the value proposition and why people should start to have at least like a 1% allocation? Yeah.

Well, I have to constantly remind myself that Bitcoin is not an asset that is most appropriate to American people, frankly. We all have five different credit cards, 10 different payments apps. There's many ways for me to send you money. It's not technically peer-to but you'll receive it right away. And our institutions are trustworthy relative to many of the institutions around the world. So Bitcoin can be a hedge against the government either devaluing or seizing your money. And it's most appropriate for the billion or so citizens of the world who live in countries where inflation is greater than 10%. And when you look at surveys of consumer optimism to Bitcoin, you see that the most optimistic countries are young emerging markets like Turkey, the Philippines, Vietnam, and the most pessimistic countries are France, Germany, Japan, right? So it's not only EM versus DM, but it's also demographics, right? The optimistic countries tend to be young and the pessimistic countries tend to be old. So yeah, we think of it as a demographic play geared to EM where fiat country currencies are even less trustworthy than the US dollar. And so while the ETFs unlocked the speculative utility, the way for Americans, developed market investors to get exposure to that asset, it's not really the full utility. And you have to go overseas and talk to some of these regular people. That's how I first got my conviction was through individual conversations with taxi drivers, basically, who said that they're into this asset. And I was working on Wall Street at the time and I came back and told the trading desk and they're like, that's a contrarian indicator. You sell when the taxi driver is bullish. And I didn't take that advice. I thought, this is actually the anti-fed money. It's not going to be something that is initially blessed from institutions who have a lot to lose. It's going to be a retail asset. So I took the other side of that trade, thank God.

Wow. Well, and so you're really passionate about the emerging markets. You specifically recently did the report on El Salvador. Can you talk a little bit about that? I've had the chance to visit myself and I saw actually a mix of two worlds. When you go to Bitcoin Beach in El Zante, it seemed like everyone was embracing Bitcoin. But in San Salvador, it was a mixed bag. I met people who were very skeptical and very worried. And when they received the Chivo wallets and their Bitcoin, they converted it right away to fiat. So it mixed. But what are you seeing and what do you want people to know about the future of El Salvador? Yeah.

I think that there are a couple dozen countries in the world that had to abandon their own currency. In the case of El Salvador, they had a civil war. It was a highly inflationary environment, and they lost control of their own currency and had to dollarize. There's a number of countries like that around the world. Many of them have borrowed billions of dollars from the IMF and are having a hard time repaying it. At any given point, about 5% of global GDP, countries representing 5% of global GDP are in some type of default versus the IMF. And what happens is the IMF comes in, they're like, hey, you know that loan that you can't repay? Well, we'd be happy to extend it, but you have to satisfy the following conditions. And often those conditions include tax hikes right so imagine that you're president in one of these countries and you have to sell to your citizens that some foreign you know institution controlled by the US is telling you to raise taxes it creates a uncomfortable political dynamic it often emboldens the opposition and to either threaten to adopt Bitcoin or actually to adopt Bitcoin in the case of El Salvador, that reintroduces some negotiating leverage for these countries. And I think it can restore sovereignty and make regular people more optimistic about their own country. So that's what we noticed in El Salvador. And actually, of the three countries this year who are newly mining Bitcoin using government energy, essentially, Argentina, Ethiopia, and Kenya, all three have IMF programs that are either in default or in jeopardy of being defaulted. So that's where we think that the adoption is most likely. I've been visiting El Salvador for four years now since they adopted Bitcoin as legal tender and have been pretty impressed at the adoption. So about 8% of El Salvadoran citizens have used Bitcoin for payments. That

seems low.

It seems kind of low, but I think it's reasonable. For a country where the average person is making $10, $20 a day, and they're basically eating what they earn every year, every day, It's not their primary – they're not primarily motivated by savings. So, and we've done a lot of conversations with taxi drivers and I heard great optimism about the Bukele administration, about the ability to have your kids play soccer at night without being hustled for protection payments. And I heard a lot of optimism that even though Bitcoin might not be the currency of today, it's a symbol that the government is being forward looking about what the technologies of the future may be. Yeah,

for sure. I heard the very same. But isn't it an IMF stipulation that they can't use Bitcoin? Because I thought that currently El Salvador actually needs to tap in and get a little bit more money and they might have to change their tender laws to essentially say that businesses can't, they don't have to accept Bitcoin, but they can if they want to. Did something like that happen?

Yeah. So there was a news story this week that El Salvador will change the requirement that all merchants accept Bitcoin. That requirement was always kind of fuzzy anyway. So it only applied to big businesses, not to small stores because it's hard to make a mom and pop bodega accept Bitcoin against their will. And there's actually other examples of this around the world. Like the Canadian dollar is legal tender in Canada, but you can't go in and buy something with $10,000 in cash. The merchant is allowed to not accept that. And there's other cases of that as well in some of the British overseas territories. So I think it's, you know, Bukele's trying to thread the needle here, get access to financing, keep the legal tender, but remove some of the more onerous kind of enforcement provisions. So I still think that having met him in the last couple of weeks, he is very committed to Bitcoin. And I think that there's actually a lot of people who will be happy about this move because for freedom loving Bitcoiners, they didn't love the idea that a merchant would be required to accept Bitcoin. Yeah. I

love when they post the wallet and how much it's appreciated for El Salvador because he was so early. Circling back to the West, I want to talk a little bit more about what institutions are doing. And lately, I'm sure people that are watching this or listening have seen announcement after announcement of companies buying more Bitcoin or issuing convertible debt, just all these unique strategies, ATM offerings to just buy more Bitcoin. And now the miners are even doing that. I want to get your reaction first to that?

Well, MicroStrategy is the pioneer here. And what Michael Saylor discovered and profited from was the conviction that portfolio managers in the convertible bond universe want exposure to Bitcoin. reaction first to that. So that's really the niche that he's going after, is that there's a whole asset class of convertible bonds. These are typically quite sleepy fixed income instruments. And now microstrategy convertible bonds represent 5% of the iShares BlackRock convertible bond ETF. So, you know, portfolio managers look for performance. If there's something that's working, they want exposure to it. And these microstrategy converts are finding great demand. There may be a time when the alternative becomes true. If every company in the world starts issuing convertible bonds and buying Bitcoin with the proceeds, eventually there would be too much supply and the model would flip. But we're still so early in the adoption cycle that for now, these issues are finding strong demand. And when you look at the universe of Bitcoin miners, US listed Bitcoin miners now control about 30% of the total Bitcoin hash rate. That's quite a large number. It's grown up from say 20% over the last couple of years because the publicly traded Bitcoin miners have access to cheaper capital than private companies. And one of the ways that they raise that capital, some of it is through share sales, and then some of it is through these convertible debt or other debt issues. So during the bear market or during like the first half of this year when Bitcoin market was more trending between, say, March and September, the Bitcoin miners that outperformed were the ones that were pivoting to AI. The Core Scientific, TerraWolf, Iris Energy, they're sitting on large electricity capacity and they're finding bids from hyperscalers, AI companies, GPU cluster companies to buy some of that electricity capacity upfront. Not only that, but also fund the CapEx to install GPUs. The revenue per megawatt is much higher for that model for the Bitcoin miners. So a number of them pivoted some portion of their capacity. The stock market loves it because it's a more predictable revenue stream. So it brings down their cost of capital and those stocks really outperformed from say March to September. Once Bitcoin started to take off, then the market is looking for pure plays or leveraged plays. And so the companies, the Bitcoin miners that were less aggressive about pivoting, like Marathon, who doesn't love the AI model as much as some of the peers, they double down on this hodling strategy. And when Bitcoin's going parabolic, that is what's going to outperform. So kind of too early to say over the cycle, which is going to be the more profitable model. That's why we're running diversified portfolios like our DAPP ETF, which holds companies that are pure plays in Bitcoin and digital assets. So MicroStrategy is one of the largest holdings. Coinbase is one of the largest holdings, but we basically have all the Bitcoin miners. And past performance, no guarantee of future, et cetera, but that funds now outperform Bitcoin for the last two years. So in the upcycle, I think you need a combination of the hodlers and the more conservative miners.