00:00Explain the value proposition of a digital asset treasury company in December of 2025 after we've seen a reckoning with a lot of these companies.
00:10People questioning what kind of value they really offer when the underlying asset is declining and the stocks can't get much headwind or can't make much headwind.
00:20Yeah, thanks for having me.
00:22So there's a difference between, I would say, a well-run digital asset treasury company and what you saw in the influx, which is a lot of companies that put Bitcoin or any other digital asset on their balance sheet with no plans or differentiation.
00:37And so for Strive, what we wanted to do was really build a Bitcoin treasury company that will perform over the long run like Amplified Bitcoin.
00:45And so we did that by launching a preferred equity SEDA.
00:49We were the second issuer after strategy.
00:51We're the first issuer to have no debt on our balance sheet.
00:54And I think the strategy is working.
00:56It's very volatile.
00:57You can easily point to the high in our stock price or any other ones and call the question.
01:02But since we've announced the strategy on May 6th, we've actually outperformed Bitcoin by over 34 percent.
01:08Our current MNAV is 1.23 percent.
01:10And that's because the market understands the strategy and the differentiation.
01:14And it's still very early in the days of Bitcoin treasury companies.
01:18I think you're still going to see them evolve.
01:19You're going to see the business models evolve.
01:21But we definitely have come down from the highs as a sector.
01:24I have to wonder, you know, whether the market needs this many digital asset treasury companies.
01:30Of course, strategy is the most famous.
01:33You have your shop as well.
01:34And we have a lot of other similar types of firms out there basically offering very similar services.
01:42And I wonder, you know, whether you see any sort of industry consolidation coming, especially if we continue to see crypto behave the way it has over the past few months.
01:50You're definitely starting to see consolidation.
01:53So Strive was the first Bitcoin treasury company to announce a merger with the proposed acquisition of Semler Scientific.
02:01And Semler, for those that don't know, was the second U.S. company after strategy to become a Bitcoin treasury company.
02:07And so I would agree with your assessment, Katie, that there are too many digital asset treasury companies today with no differentiation.
02:14I think over time you'll start to see more sophisticated strategies emerge.
02:19And I think you'll actually see a growth in digital asset and specifically Bitcoin treasury companies with specific differentiations.
02:27But I think this current version, I think, lacks sufficient differentiation.
02:31And that's why you're seeing a lot of them trade below the value of the Bitcoin themselves.
02:35Matt, last week we spoke with Jack Maulers.
02:39He's the 21 Capital CEO.
02:41And he spoke about how he thinks there are ways that investors should have more exposure to Bitcoin.
02:47Take a listen.
02:48My general opinion is I think these indexes should optimize to get Bitcoin exposure somehow.
02:54I think it's very important that the passive investor has access to the best performing asset in human history,
03:00the best performing asset over the last 15 years, and now one of the largest assets in the world at $1.8 trillion.
03:07That's the size of these big, you know, MAG-7 tech companies.
03:11So I think that passive investors should have access to it.
03:15And he's referring, of course, to index compilers like MSCI, which has brought up the possibility of perhaps not including companies that are not operating companies and just hold Bitcoin as kind of an investment.
03:27You've pushed back against that idea.
03:30State your case for why you think digital asset treasury companies should be included in the MSCI indexes.
03:37There's multiple reasons.
03:38But what I think is the most important reason is that it's not the job of an index provider like MSCI to pick and choose winners.
03:46And Bitcoin treasury companies, if run well, like Strive, I'm sure 21 will be the same, like Strategy, are operating companies.
03:53We have products.
03:54We have services.
03:55We're a structured finance company.
03:57So as an example, SEDA is structured finance.
03:59It's a product out into the market.
04:02As Katie knows, we've known in the old version of Strive, Strive is also an asset manager.
04:08We have 13 ETFs that trade on the New York Stock Fund.
04:11Funny enough, we use Bloomberg for our indexes, and Bloomberg actually includes strategy in them.
04:17They have not excluded them, and it's been to the benefit of Bloomberg index holders.
04:24And I think the first principle here is like Jack Bogle.
04:28You want to own the market.
04:30You don't want to exclude funds.
04:32And, yes, I agree with Jack on maximizing Bitcoin exposure.
04:36But the role of a passive index funds is not to take a view.
04:38It's allow innovation to occur and let winners occur where winners are.
04:42And I think that MSCI is probably concerned with how much success strategies had and what that means for the percentage of holdings in their index.
04:49But I don't think that's a valid reason to exclude them.
04:53Well, just to be clear, MSCI's reasoning was that, you know, these look more like investment funds than they do operating companies.
05:00You're, of course, pushing back on that.
05:01But you did bring up something that I did want to ask you, Matt.
05:04I know you and Strive primarily first as an ETF issuer.
05:08As you mentioned, you've transitioned the company, you know, over the past couple of years.
05:12So are you done with the ETF business at this point, or how does it fit into Strive overall?
05:19Yeah, we're still an ETF business.
05:21We're an asset manager first.
05:22And so we offer products out into the market.
05:25And so for us, the core principle here is that we want to maximize value.
05:30We push funds and companies in our indexes to maximize value.
05:34We at Strive are also focused on maximizing value.
05:37And part of the early days of Strive was really pushing back on the ESG movement.
05:41And I think our conclusion there is that we kind of won that mission, and we won it very quickly.
05:46And so to maximize value, we put ourselves on the Bitcoin standard.
05:50And we also think that that is an opportunity for companies within our index ETFs to actually maximize value as well.
05:58So we still are doing it.
05:59But for Strive shareholders, the primary return will be from our Bitcoin operations.
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