# Ethereum Infrastructure, EU Regulation, and Treasury Strategy

**Podcast:** The Milk Road Show
**Published:** 2026-06-29

## Transcript

Ethereum is going to be a trillion-dollar market cap asset much sooner than people realize because the total addressable market and the huge amount of demand that capital has for an alternative that is credibly neutral and censorship-resistant, open, permissionless, and secure is huge.
What's up, everybody?
It's LGDUCET here, and welcome to The Milk Road Show, the daily crypto show that is waiting and almost kind of hoping for an AI crash.
We just want to be right about something during this bear market.
Actually, I hope that doesn't happen.
I hope it just rotates slowly.
Anyways, today is June 29th, 2026.
Did you know that 80% of the crypto companies are about to be kicked out of Europe?
I just found this out like five minutes ago, and apparently it's kind of good news for Ethereum.
John's on the show.
He's going to explain that one to me and also go over the digital credit capital framework, which is Michael Saylor's latest tool to kind of manage the somewhat seemingly mess that strategy is in right now as Bitcoin prices kind of wavered and sort of their stock prices.
And before we start, I just want to point out that we made 12...
trades last week.
Not me personally, but our analysts in Milk Road Pro, they went off.
I thought it was going to be a quiet week after the week before they did one trade total, but they went absolutely berserk.
They bought things like healthcare stocks, software stocks, even more of those AI bottleneck stocks and all that after buying Micron Nebbius Bloom Energy way back in March and making tons of profit on it.
They are not done yet.
If you want to see what they're buying next, it's just a dollar to get it at Milk Road Pro.
And yes, John actually bought something last week as well.
Today's episode is brought to you by BitGet, stocks 2.0, worth real liquidity, real dividends.
John, what's going on, man?
Happy Monday.
Happy Monday, LG.
That was quite an introduction, so thank you for that.
I'm ready, man.
I'm ready to finish the first half of this year, okay?
Like, we're at the end here.
H2 will hopefully be better, even if it's worse at first.
But I'm excited to get into the second half of the year.
Yeah, me too.
I think there's a lot of things to be bullish on.
There's a lot of news in crypto today.
And yeah, I'm just I'm really excited about what the second half of the year is going to bring.
Well, the first thing I talk about is something, it's not that sad.
It's really not that bad.
I'm not going anywhere.
But this is my last week doing the crypto podcast, okay?
I've been here since October.
I'm not going anywhere.
I'm still Milk Road.
Just fucking relax for a second, okay?
I'll still be here on Mondays.
John, we're still going to do our episodes on Mondays, you and me.
So I'm going to quiz you on what's going on in the market because I still love crypto.
I'm still going to be doing that.
But I'm going to be moving more to the AI side right after I said I hope it all crashes.
That's what I'm going to be focusing on.
We're going to do more episodes there.
We've been doing a lot more deep dives with our analysts with Mel.
Calvin and Vincent, and we've been kind of like quizzing them on a lot of the stock picks that they like.
I'm going to focus there.
John is going to be here with you guys every day.
He's going to be doing a lot more of our guest interviews, probably doing some deep dives of his own as well.
So you might see me back to interview John on some of those.
He's going to continue on with our excellent guests, our great experts.
And I just want to say thanks for welcoming me into your earbuds on your commute or your gym time.
or late night when you can't sleep and you're listening to crypto falling, crypto crashing.
It's been a great time.
I'm sure I'll still fill in for John once in a while.
Like I said, I'll still be here Mondays.
But John, you're the man now, dog.
This is your show from here on out.
That is a very old and very ad for reference.
But yeah, LG, I'm really excited to be doing more crypto episodes.
And I'm looking forward to seeing what you're going to be doing on the AI channel.
And just there's so much going on, so much changing.
One of the things I love about Milk Road is that we are really great about staying current with what's going on and adapting.
And I think a lot of other channels or content creators struggle to pivot, to adapt, to grow and to expand.
But I've loved that about Milk Road ever since I've joined.
And so I'm really excited about all of this.
It's going to be really good.
Guys, listen, we are at a very crucial point in time right now.
AI stocks have ripped.
They're going to keep ripping.
Our analysts on the AI side are up like literally 100% or more on quite a few calls.
And crypto is about to boom again, or at least it feels that way.
If you want all the insight on what we're buying, what our analysts are doing, what's on their watch list, all of that is in Milk Road Pro.
So join at the link below.
That's it.
Yeah.
And crypto will flourish again.
It will do incredibly well.
Like you come on every week with us on these Monday shows and give us a lot of reasons to be bullish.
A lot of our guests give us really good reasons to be bullish.
long-term, even if there's some short-term technical TA that kind of gives you a more bearish outlook.
Crypto will always be there for me.
This is how I got my start in this industry in finance.
I was in film before, so totally different.
It'll always be there for me.
I'll still be listening to all the shows, but I think you're right.
I think Milk Road, and kudos to Colin J.
who really led us in adapting to what's happening.
Like crypto is going to be in this bear for however long, hopefully not much longer, but there's a lot going on across the aisle.
Maybe it will rotate one day.
Maybe it won't.
On that show, on the AI show, we have talked about crypto a lot too.
That's the thing for anybody that listens.
We do a lot of our guests there who are people who are not crypto people at all.
They're like, listen, I'm bullish on agentic payments on chain.
I'm bullish on stable coins.
I'm bullish on Bitcoin, Ethereum, and Solana.
There's still a lot of crypto is a big.
bullish part of AI.
I think there are very few AI people who are bearish on crypto.
They see it as a huge part of this big future that's coming.
So I invite you guys to come listen to that.
We've been doing...
maybe three episodes a week for the last couple of weeks.
We're going to be ramping that up through the summer.
So come check it out.
You'll hear from Melvin, Vincent.
You'll hear from Kyle, maybe even Martin sometimes.
John, maybe we'll get you on there.
If you ever buy an AI thing, maybe we'll get you on there.
But we have a lot of great guests coming up as well.
A lot of good analysts and experts.
And let's call them visionaries.
So very keen for you guys to come over and listen.
Like I said, crypto's time is coming again soon.
There was no question there.
That was just me.
I only speak for about 3% of these episodes.
So this means just upping the counter just one last time as I go out.
John, let's get right into it.
So there's a lot to talk about, which is great.
You know, usually on these shows on Mondays, we have to talk about war or just macro and stuff like that.
But we actually have real good crypto news to go over.
You were telling me before we started recording about MICA, which is kind of a new regulation going down in the EU that is starting this week.
I guess going to basically remove a lot of crypto companies out of your like, like, give me a one on one on that, man, because I actually I actually have no idea what's going on.
Yeah.
So this is one of the things that's actually been causing me a lot of concern regarding the Clarity Act, which is that it can be used as sort of a Trojan horse.
If you get legislation passed on the books, a hostile administration can use that just as aggressively.
as a constructive administration can use it to help your industry.
A hostile administration can use it as a weapon against you.
So it can be a bit of a Trojan horse.
I think this is something that a lot of critics of the Clarity Act have said, that the longer that this bill has gestated in Congress, the more the banks have sort of gerrymandered and tortured the language around what's in the bill to make this less of a bill to help the digital asset industry and more of one to protect the incumbent's trad fi and banking system.
So I think that's just like, you know, it's not a direct answer to your question, but it's something.
that's been worrying me.
MICA, M-I-C-A, MICA bill, was something that passed through the European Union I think over a year ago at this point, but it had within it a period.
of time for transition.
What that means is that there were a lot of different businesses that were doing business in digital assets in crypto in the European Union.
And once this framework came out, this was passed, kind of like it's not their version of the Clarity Act, but it's like a big comprehensive legal and regulatory framework for digital assets in the European Union across all of those jurisdictions.
But the transitional period that the bill...
The law allocated expires on July 1st of 2026.
And what happened just a few weeks ago was that there was an announcement saying that, hey, we're not going to extend that deadline and we're not going to be granting any exemptions or extensions or anything like that to people who don't have a fully compliant license under the MECA law.
You have to either wind down your operations or migrate your clients out offshore or to another platform that does have a compliant license in place.
The difficulty there is that there's something like 1,200 or so firms that are operating in the European Union right now in this industry, and only around a couple hundred of them, like 250 or so, something like that.
I can't remember off the top of my head, but that's how many people actually have these licenses.
The rest of them don't, so they're going to have to cease operations, wind them down, migrate their clients offshore.
And so it's effectively what it's doing is saying like, okay, look, we gave you what you wanted.
Here's your… big framework of legislation that regulates your industry and says how to compliantly do business in the European Union.
You have this window of time to comply.
The regulatory process for getting those licenses approved has been so lengthy that most people, like 80% of the companies that are trying to operate in this industry in the European Union have not been able to do so.
And then they said, we're not going to give you an extension and we're not going to give you an exemption.
I don't know if this is out of date by the time of recording, but that was the lay of the land about a week ago, a week and a half ago when I wrote my wartime Ethereum situational awareness article talking about this.
Other people have talked about it too, but...
That was the lay of the land for a while there.
And I think that the reason why this is so important is that it shows that just because you get a piece of legislation through doesn't necessarily mean it's great for the industry.
It doesn't mean the crypto is out of the woods.
There are still a lot of major powerful players in government and in industry who are opposed to a lot of the things that the digital asset industry is trying to do because it threatens their incumbent control and power.
And so I think, you know, there's a lot of ways to look at this.
It's like who's doing what and why and blah, blah, blah.
And maybe they should have had the licenses sooner, et cetera.
But the end result is that a lot of the digital asset industry in two days is going to be forced out of the European Union.
And, you know, I mean, we can take this conversation wherever you want to from there.
But that's sort of what's going on and why it's so concerning and why I think this is why I wrote.
wartime Ethereum situational awareness, there are so many things that are happening right now in crypto that people are just not paying attention to, but they are hugely important and they're laying the foundations for a long time to come in terms of what this industry looks like, what the opportunities look like.
And I think there's just a lot to be paying attention and digesting right now.
So which companies have to leave Europe?
Do we know?
Do you know?
The ones that are operating in the European Union jurisdiction without a fully MICA compliant license.
Got it.
Okay.
So whoever doesn't, okay.
Okay.
So whoever's not following.
It's like a thousand companies.
Holy shit.
But why haven't these companies adapted?
Because it's been, like you're saying, this passed like a year ago.
Yeah.
Well, there's a long process to get that compliance.
A lot of them submitted their applications or in the pipeline of some form or another, but just haven't been able to get over the finish line with that.
And you can speculate about what the cause is for that.
I don't want to go making allegations or anything.
Far be it for me.
But the circumstances as of a week ago was that if you don't have the license, you can't continue operations until you do get the license, and they're not going to give any exemptions or extensions.
That was the latest I heard.
Now, this could have changed as of the time of recording, but that was what I heard most recently.
And do you see this?
I mean, I feel like I know the answer.
But is this being seen as like regulatory overreach?
Like, is that how MICA has been kind of viewed?
Because I just feel like we haven't really talked about it on the show.
Nobody's brought it up, but it does seem pretty significant because Europe, the EU is a huge market.
It is a huge market.
It's a huge jurisdiction.
I think that it kind of is par for the course in terms of Europe's approach to regulation.
They seem to be happy to regulate something out of existence if it gives them more control over it.
I think that – look, here's my read of this situation from a more macro perspective of what's going on as opposed to just zeroing in on the MICA bill because I think that Europe… You could make the argument that they were trying to avail themselves of regulatory arbitrage.
What does that mean?
That means that because Gary Gensler and the government of the United States had sort of had this regulatory ambiguity around digital assets, bringing forth the Michael legislation was a way to give clarity for how to operate in the European Union to attract businesses to come into the European Union to do business there.
Now it seems like what's happened is because the United States has started to catch up and because we've had the Genius Act, which has made stablecoins compliant with US law… There's been this global proliferation of digital assets and US dollar-denominated digital assets and particularly stablecoins.
I think what the European Union is concerned about is capital flight.
So along with this clampdown on regulation on MICA, they also passed a bill again a week ago out of their European Union – I can't remember the name of it – one of the committees of the European Union legislative body.
To move forward with a central bank digital currency, a digital euro.
So what they're trying to do, I think, is push out people who are giving off ramps or exit ramps from European Union assets or the euro.
And at the same time, move to launch a central bank digital currency competitor to US dollar denominated stable coins.
The goal here overall, I think, is to keep capital and investment that is in Europe.
in europe and you can call it capital controls you can call it whatever you want regulatory overreach whatever phrase you want to use the goal here i think for europe is to protect and defend their capital you know michael michael howell's substack in his book is called capital wars all of these major entities and regulatory jurisdictions the european union japan china the united states etc they're all in some way fighting over control of capital and trying to take capital from one another the united states has been very effective with dollar denominated stable coins our government has been very vocal about talking about how they think there'll be trillions of dollars of USD stable coins.
So Europe, I think, is responding to that in different ways at different times as the game theory and the strategy calculus changes for them.
But that's what I think this is.
It's not just an isolated thing.
It's part of a larger strategy I think Europe is trying to deploy to retain capital and to...
fight these capital wars.
Nobody in crypto is really aware of this.
Some of the macro guys are following this, like Brent Johnson and his dollar milk theory about how the stablecoins are sucking capital about other jurisdictions.
He's been following this, but a lot of crypto native people are just not really paying attention to this right now.
Yeah, why not?
Because it involves paying attention to something that's boring in a bear market and it's just not a sexy issue right now, but this is the larger macro fight that's happening.
Yeah, but people are, I mean, I guess people pay attention to the Clarity Act, but I guess it's more local, right?
So that's something that's more relevant.
And I guess the US is a bigger market than the EU.
Yeah, for sure.
But I also don't think that people are paying attention to the Clarity Act right now.
It's languished for like two years trying to get through and it doesn't seem like it's going to make it now.
It might be dead in the water.
Like people are mostly tuned out from almost everything related to crypto.
So why is this bullish for ETH?
So this is why I wrote situational awareness, wartime Ethereum situational awareness.
It's on my X, Bitcoin Jesus ETH or wartime Ethereum ETH, whichever one you can find me on there.
But the reason I wrote this article is I call it situational awareness.
People need to know what's going on because there's a larger calculus here.
As we see sort of like all these different movements from governments, from corporations, from industry players to… fight against digital assets to clamp down on things and i think that the you know the export control that the united states leveraged over anthropics fable five and their mythos model is another example of this a regulatory jurisdiction clamping down on control to protect its itself to protect its power to keep its control over these systems concentrated in its own hands as that starts to happen this is just a thing from philosophy people don't notice the limits of their own freedom or their own liberty until they run up against the limits of them Once they find those limits and those constraints, then they begin to look for alternatives to free themselves of those constraints.
This is a lot like what happened when the US kicked Russia off of the Swiss system.
Then you saw China and other BRICS players start to move towards Enbridge, start to move towards a gold-denominated-backed system.
So once you run up against these limits of power… And these institutions have power, but they haven't chose to use it.
Once they begin to use it and they show a willingness to use it, then I think you see people start looking for an alternative.
The reason why I think that benefits Ethereum is that Ethereum is trying very hard to offer the world exactly that alternative, a global, decentralized, credibly neutral, censorship-resistant, open, permissionless, secure, scalable infrastructure upon which to build financial, economic, monetary, and governmental infrastructure for everybody.
And it's not… something that somebody can take away from you or kick you off of.
So that is what I think we're seeing.
Abishal Garg articulated this on the Empire podcast.
And then Eric Voorhees, when he was talking about Venice and his decentralized AI project, he said that it wasn't even a choice.
Ethereum was the obvious solution.
So I think that this is the longer term thesis here on Ethereum.
Ethereum is going to be a trillion dollar market cap asset much sooner than people realize because the total addressable market and the huge amount of demand that capital has for a alternative that is incredibly neutral and censorship resistant open permissionless and secure is huge and so i think that that is what ethereum is playing for that's hundreds of trillions of dollars of potential market opportunity there and ethereum is the front runner and you know taking a shot on goal in terms of winning that opportunity everyone's tokenizing stocks these days but almost nobody's doing it right thin liquidity prices that drift from the real thing dividends that just vanish bit get stocks 2.0 is different real NASDAQ and New York Stock Exchange depth through licensed brokers.
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Okay, so you're basically telling me, I'm just going to try and summarize this from my point of view.
Governments are, starting to clamp down as basically the digital economy takes off, right?
And by digital economy, I mean digital tools, like things like Mythos, everything from Mythos, which is now Fable, like super smart anthropic tools, AI tools that can destroy industries overnight.
Let's say that there's the potential of that kind of stuff, right?
Totally annihilate SaaS and be the strongest computer virus ever, break into every system, every bank, whatever.
Everything from that all the way to people really taking custody of their money, taking it like we don't need EU anymore.
We don't need US dollar anymore.
We can have our own economies.
We don't need to use central banks.
So everything, all that is kind of like this is like the digital world that we're entering.
And all these moves are governments trying to get a handle on that.
And the result as they do that and they...
impose these regulations on a lot of the major players who have been building this and those major players like comply right like anthropic is and they're kind of in a weird spot where they do comply and don't comply but they're kind of in this push and pull something that is decentralized and secure permissionless like ethereum is well positioned to be the alternative my question for you john is who's using that alternative because To me, most of finance inevitably is regulatory compliant, right?
So that's what I'm saying is that I think I understand why you're bullish, but are there enough people who are willing to buck the trend and go essentially against these world governments to drive that much value to Ethereum?
Yeah, so this is a great question, and I think this is exactly why ETH Labs has been formed.
There's a quote from Vitalik Buterin.
He said that principles don't change the world until people benefit from them.
And I think that's exactly what we need to see happen, and that's what ETH Labs has been organized to do.
They have a two- to three-year run rate in terms of the funding they've already secured.
They have some of the densest concentration of talent in terms of research and development in the entire digital asset ecosystem, but specifically from Ethereum.
And they have formed this organization.
specifically so that Ethereum and ETH, the asset, can play to win.
So they're going to go out into the marketplace and say, what are the friction points?
Where are the hurdles to adoption?
What is stopping you from using this?
How can we continue to add value here?
At the same time, ETH, the Ethereum Foundation, is focusing on delivering those sensors of precision qualities and protocols and moving forward with a lot of these major updates.
based roll-ups to bring a lot more volume onto the L1 as opposed to the L2s, the Ethereum Economic Zones to reunite the fragmented L2s.
And the liquidity and capital there, there's privacy coming natively to the L1 of Ethereum, which is going to be a huge unlock for institutional adoption.
And there's just so much more happening.
Glampsterdam is going to be one of the biggest changes and upgrades and utility unlocks for Ethereum since the merge when they switched from proof of work to proof of stake.
So all this is happening at the same time.
And this is why, again, situational awareness, you need to see both the market opportunity that's there that we just described, but then how Ethereum is best positioned to play to win that market.
share, capture that market share and to win that value and offer that to the market and all the things that they're doing rapidly to pivot, to create these different organizations to achieve these different objectives and be able to say in a credibly neutral way, hey, we're offering this to the market and then go out and win that market share, tell that story, build those products, bring in the users, bring in the capital and drive that value to eat the asset.
So this is one of the reasons why I've been so excited and like hopping up and down trying to get people to notice this because.
Everyone is talking about semiconductors and silicone, and there's a lot of important things to pay attention to that are going on in other parts of the market.
However, I think that there is a multi-hundred trillion dollar addressable market in digital assets that we're playing for and it is still up for grabs.
I think it's a really exciting time and a great opportunity.
This is the time to lock in and to pay attention to this and not after everybody's already figured this out.
But I do think that the market is starting to figure it out.
Ethereum is figuring it out.
That's why you're seeing these new labs.
That's why you're seeing this funding.
And the funding source, it's coming primarily from the DATs, which now have a combined total of about 7% of Ethereum's total supply.
And that's throwing off between $400 million and $500 million a year of staking revenue.
They have a fiduciary obligation to their shareholders to reinvest.
that capital in a way that supports their aligned incentives with the growth of Ethereum, the asset, Ethereum, the network and their businesses.
So I think this is all just really working as it's supposed to.
And Ethereum has been responsive to market pressures and demands.
I'm really excited to see where this goes.
But it's a, you know, Ethereum is a trillion dollar asset trading at 100 billion or so.
And that to me is an incredible opportunity that I think is just important to pay attention to.
So I've been writing these wartime Ethereum essays to try to explain this to people and to make it clear so they can understand.
it in a way that isn't so vague or wishy-washy, but more concrete and specific.
What's the bear case for all this?
The bear case for all this is that tokenization happens, real-world assets come on chain, and that they go on to permissioned systems that are owned by legacy players.
And instead of creating an open, public, global, decentralized, centrally persistent, secure system...
like Ethereum, like a Bitcoin, like something else like that, all of it just becomes co-opted.
And all we've done in this industry is forge the chains of our own enslavement.
And given our overlords and masters in these major corporations and the polit bureaus of the world, the centralized governing apparatus of all these different institutions and central banks, we've given them tools to extend their surveillance and capital controls over us, over our freedom and over our lives and force us to rent back.
our own lives from them.
So there is definitely a bear case here.
Again, that is a big reason to pay attention as well, because your capital is how you vote in the system.
Where you are deploying your capital is not just a place to get returns anymore.
It's also a way for you to vote for the systems, the future that you want to live in, and to articulate that thesis directly into the market with your capital.
So I think that that's an important thing to consider as well.
It's not just about who's giving you what percentage of returns or yield, but you're also voting for a system of operation for the next century of finance.
And there's going to be a very long and acute, protracted, drawn-out battle over this ownership of this market share because these are – we're talking about a quadrillion dollars of value of assets globally and many multiple trillion dollars of daily volume.
There are a lot of incumbents who want to keep – control of that and get more control over that.
And so this is not going to be an easy battle to win.
But I think that the need is there.
The demand is there.
The awareness is growing.
And so I think that Ethereum is well positioned to compete in that space.
Why is this?
Why do you portray this as so much of a battle?
Because it is.
It's what a market is.
You're competing.
It's competition, right?
And, you know, it doesn't have to be war exactly, but.
It feels like wartime Ethereum is more than like, hey, guys, let's go compete and all play to win.
And I hope both sides have fun.
I do want Ethereum to win.
I do want Ethereum to win because I think it is a better solution than a lot of these alternatives and a lot of these legacy systems.
But I'm not by any means an Ethereum maxi, right?
I think that there are a lot of other solutions to the blockchain trilemma that have been proposed and that have been built in other public blockchain ecosystems.
perfectly happy to support one of them if they end up being the winning solution.
But I think it's also a question of, you know, the market is the one that decides this, not me or, you know, the founders of other projects.
And the market right now is telling you that Ethereum is where the bulk of the capital is.
And so they have the best positioned to win.
That can obviously change.
But it is a competition.
Ethereum has got a lot of competition from...
other crypto projects from legacy systems, from nation states, governments, corporations.
And so it's going to be, it's a fight to see who can capture and protect that market share.
Is Ethereum winning?
I think it is right now.
Yes, I think Ethereum is winning.
And I think that's the interesting thing about this is that by every metric except price, and this is true across the digital asset space, but by every metric except price, you are seeing digital assets winning and Ethereum winning specifically.
There's all-time highs in transaction volume.
There's more staking, more yield.
Ethereum is going into the staking contract than ever before.
We're seeing new adoption, innovation in digital assets in ETH projects like Uniswap.
Athena, like Chainlink, Aave, many others, Sky, right?
They're all continuing to grow, get better, get more adoption, offer more value to the market.
And so I think that there's a lot of room to say that, yes, Ethereum is winning, but digital assets overall are winning.
John, I want to kind of wrap this part up because I do want to understand Saylor's latest kind of ploy to save strategy.
I guess...
I guess this is a topic you'll continue to cover, right?
Because this is kind of your second essay that you've written on X.
It's drawing a lot of attention.
I think a lot of people are into this.
So I guess this is a rhetoric or perhaps a passion piece that we'll continue to see from you.
So I guess if people want to follow that, you can check out John on X, Bitcoin Jesus.
is his handle or just look up John Gillen.
All right.
With an E, with an E, not an A for anybody who's confused about that part, especially some people at milk road don't really understand that vowel in your name, but thank you, John, for your thoughts.
We'll wrap it.
We'll wrap that part there.
I do want to understand the sailor stuff.
So please explain to me in the most basic way, because I feel like I often ask people on the show to explain.
I had to understand Stretch a couple months ago, and now there's this new thing that we previewed in the intro, which is the digital credit capital framework that Michael Saylor is launching today.
And he's also raised like a billion dollars again.
Tell me more, John.
Yeah, so what Saylor's doing here is to try to address some pretty clear feedback he's gotten from the market about concerns over his company and his products, and he's trying to make sure that he's able to meet those demands and quell those concerns.
And I think he's done a pretty good job here, but again, the market will be the one who decides this.
But basically, there's several legs to this stool.
The biggest thing is that he's bolstered his USD, his dollar-denominated reserves, to I think about – $2.55 billion of cash that he just has on the balance sheet right now.
And he's going to be able to use that for a couple of things.
One of the things that he's announced in this is an STRC buyback program and an MSTR buyback program.
So he's saying that I have the capital on hand to deploy to support these products and to prop up their valuations in the market.
But he's not committed to do that.
He's just given himself the flexibility to do that.
And then he's also announced a BTC liquidity program, which earmarks, I think, 2.5% of his Bitcoin, somewhere around like $1.15 billion worth of Bitcoin.
that he can sell if he needs to, to raise additional liquidity.
So what he's trying to do here, and he also said for the STRC product, I have enough cash on hand to fully fund that for 17 months.
And he made a commitment to keep at least 12 months of fully funding for that on hand.
And then he raised the dividend that from 11 and a half percent to 12% as well, to make it more attractive to the market, to bring in more demand.
So what he's doing here is a couple of things.
He's given himself a lot of cash on hand.
He said that I can buy back STRC or MSTR if I need to to keep supporting the price there.
And he said I will sell Bitcoin if I need to in order to continue to support that.
Not a ton of his Bitcoin, but he's able to sell now – I think it's like 21,000, something like that, coins to raise more capital to continue to support these assets if he needs to because his company, his stockholders do need to come first.
And so that's how he's prioritizing this.
Now, what he's not doing is market selling.
a billion dollars of Bitcoin, right?
He has raised cash on hand to support these products.
So really what it is, is a framework where he's just given himself the maximum number of flexible options that he can go to in order to continue to support these products and to continue to accumulate Bitcoin and to sort of like encourage market faith in STRC and in MSTR and what he's doing.
So that's kind of the overview of it here.
I may have left out a couple of pieces, but the biggest thing is like, he's got a big pile of cash.
He's raised the dividend on a stretch.
He said, I will buy back MSTR and STRC if I need to support them, and I will sell some Bitcoin if I need even more liquidity from there.
So that's kind of what he's laid out there.
Sorry, can you reiterate for me?
How did he raise that extra money?
By selling more MSTR stock, right?
Right, yes, exactly.
Why does it feel so much like it's just somebody?
like plugging holes in, in like plugging a bunch of leaks constantly, but plugging them with material that has been used to plug other leaks.
You know what I mean?
Like, I don't know.
I'm sure there's a much better analogy for that, but why does it, is that what it is basically?
So this is a subject of much debate.
A lot of people have made this observation that this feels like.
Ponzi-esque as I've ever heard it described.
Because what you just said is basically a Ponzi scheme, right?
Like you're using funds you took in from here to put funds over there and it's like you're just taking it from the right hand and giving it to the left.
I don't think that's exactly how I would describe this.
I think it's really a – all of finance is in some way a risk mitigation distribution.
It's all about risk and revenue.
It's fear versus greed.
So you're taking risk now in exchange for revenue later, and that's kind of what he's doing.
He's just created a machine to do that in the form of his company, and he's doing that through Bitcoin as his reserve asset.
All this does depend on the assumption, though, that Bitcoin continues to function well as a reserve asset and as digital capital, as he says, and continues to accrue value, which means that the dollar continues to lose value.
So there's a lot of assumptions kind of baked into this.
But really what it comes down to is just a way of taking risk and volatility and turning that into revenue today in exchange for.
you know, him taking the risk on Bitcoin for you.
There are covered calls, products coming out from BlackRock and from Goldman Sachs that are effectively doing not the same thing by any means, but a similar sort of an idea of taking cash today in exchange for giving yield and income to whoever's holding that product.
But the, you know, the flip side of it is that BlackRock, Goldman Sachs, whoever's holding the Bitcoin gets the appreciation of the asset now.
So it's kind of like, hey, I'll pay you today because I think this will be worth more tomorrow.
And if you want that income today, you're willing to take the income today and let Michael Saylor, BlackRock, Goldman, whoever have the upside, the appreciation tomorrow.
That's the trade that they're making.
That's the bet.
Obviously, there's more to the covered call strategy than just what Saylor's doing, but it's not quite as simple as a Ponzi.
It's just using...
high financial engineering basically to offer the market an interesting kind of product.
So a super Ponzi basically.
Yes, right.
Yeah, sure.
Why not?
We'll call it that.
Not financial advice.
No allegations.
Don't sue us.
I'm not saying it's Ponzi.
No, no, no.
We're not saying that.
We're just playing around.
Everybody relax, Sailor.
Don't come stab us or anything like that.
But I will say, would he show that picture of that spaceship?
with like Bitcoin yield and like, I don't know if you've seen this before, but that when I saw him do that in a presentation, I was like, oh man, that's, oh, cool.
No comment.
That one video where they're all dancing was weird.
Yeah.
And usually cringy too.
Yeah.
And yeah.
And his weird AI videos and stuff like that.
It's just never really, especially when it's like the, the, you know, he hasn't like, would you say that sailor has won yet?
with strategy you know what i mean but that's what i mean is like usually you see that kind of stuff with people that's like listen proven track record success i've been doing well for a long time not somebody that it's like a kind of a lot of people like the sentiment kind of sees it as like this guy's this guy's just just barely hanging on i mean he's got over 800 000 bitcoin so in that sense he's he's won i guess but his stock is also down something like 80 actually this is an interesting thing I don't know if this is still true this morning, but I saw this weekend for the first time, I believe, in the history of strategy operating as a digital asset treasury company or a Bitcoin treasury company.
The market capitalization of the Bitcoin that they hold exceeded the market capitalization of the company, of MSTR's common stock, which means that the market is basically saying like we have so little confidence in strategy that… We don't even think it's worth the amount of Bitcoin that they're holding.
So that's either a market opportunity or this is, I think, what he's trying to address.
The reason for this new framework is to try to address some of these fears.
But I think that's just a great indication of where we are and how you measure success.
He's got 800,000 Bitcoin, but he's also got the market telling him that your stock's down almost 90%, 80%, something like that.
So I don't know.
I don't think it's clear yet if he's won or not.
I think we're still figuring that out.
Yeah, like that stock, the strategy stock is just cratering back down to that level, to that first big pump back in early 2024, right?
So it's really like the market is really, and even, yeah, today is green, but I don't, I mean, you're more the expert here and other people have a lot of opinions too, but even this latest thing feels like it's going to be a short-term green shoot.
Maybe.
I don't know.
We had a good conversation about Stretch with the Bitwise guys last week as well about it.
So if you guys want to check back to last week's episode with Bitwise, they had some good thoughts on it as well.
And it looks like STRC is doing well, like Stretch, right?
It looks like it's at least popped back.
So that's working to prop it back up.
But it does feel to me, John, and maybe you can kind of share your thoughts there as well, and I've expressed this a few times on the show, probably with you as well, is that at least from my perspective, doing the show all the time, which I won't be anymore, is that this is really kind of the big kahuna hanging over the market at this time.
right is like and there's a lot of other things right there's there's all these other factors there's clarity act there's midterms there's rates there's ai rotation trade um there's a million things there's there's there's general regulation even like you're saying right with micah coming kind of you know coming into effect this week um but in in the current term at least in the narratives that we follow um and even just the general you know economics of this whole beast of bitcoin and the companies attached to it this feels like it's the thing that people are watching and they're unsure how it resolves or how you get clarity on what happens with this, whether it's good or bad.
And I feel like that's kind of the big thing that until any of those other things come to pass and they have their own timelines, this is what's being focused on.
This is why I'm so excited about digital assets right now because there is this sort of Damocles, which I think is a nothing burger.
Saylor is fine.
He's going to be fine.
His products will be fine.
This is all going to be fine.
But at the same time, you're right.
It is scaring the market, and it is giving people pause about buying Bitcoin with some people I think because there's a risk that he could sell up to a billion dollars of Bitcoin.
To me, this is a hugely exciting opportunity to accumulate some of these Apex assets at a time when everyone's too afraid to touch them.
And it's like that meme, you know, when Bitcoin's at all time highs, everybody lines up to buy it.
When it's actually at a good entry price, nobody wants to touch it.
And this is why I'm excited.
This is why I'm buying.
I've still got bids set.
I'm hoping for some continued softness from Bitcoin's price here so that I can accumulate even more.
And I'm just going to keep deploying capital into this while everyone is wrong and overlooking this huge opportunity.
So I view that as a gift, right?
Like Saylor himself says volatility is a gift to the faithful.
This overhang, this fear that is coming to the markets about whether or not this 800,000 Bitcoin holding whale is going to have to puke his coins is a huge opportunity because he's just going to continue to accumulate and so am I.
So I think that for people who have that longer term view are willing to hold through a summer of FUD, I think you're going to be very handsome and reward on the other side of this if you're able to take advantage of this opportunity.
So is that that's your view then is that, you know, your current timeline, you shared this with us before you feel like we're in this chop in this FUD, in this weakness, let's call it through the summer going into Q4.
Until some sort of, yeah, until some sort of exogenous catalyst comes like if Trump comes out and signs clarity and says, I'm personally buying 10,000.
Trillion Bitcoin, right?
Like something like that.
Like there could be something, an exogenous catalyst that sort of flips this around.
Until then, though, I think everybody, the consensus on this is that the four-year cycle is playing out and that it'll start to bottom in like September, October, and we'll be back to a bull run after that.
I think because that is the consensus that everyone… You know, that's the consensus view everyone's taking that won't play out.
And I think we'll see a version of what we saw last time, which is that, you know, once those ETF products got approved, we started to see people front running the halving.
We saw a new all time high before the halving that had never happened before.
I think we'll see more front running this time because people are going to realize, hey, the fundamentals have never been stronger.
There's this broad, secular, institutional bull run in digital assets.
Bitcoin and Ethereum are hilariously undervalued.
Let's get a position now while no one's looking.
The more that starts to.
catch on, the more the price will respond, the more price responds, the more it's like a reflexive thing.
And so I think we will see a return to some strength from digital assets prior to when everyone expects it to bottom, particularly because everybody expects it to bottom at the same time.
Is that a too broad of a consensus?
Yes, I think it's everybody is like dead certain that, oh, I will buy the bottom of Bitcoin in October.
It's like, no, you won't.
You won't do that.
You might buy it, but you won't do that.
I wonder about that.
I wonder, you know, my theory on that, John, and I'll wrap it up after that, too, is, you know, you had this this anti consensus move in Q4 because we all said, hey, listen, Q4, that's prime time, baby.
It's going to pop off.
Here we go.
You know, and it was it was the total opposite.
And that was the only leading factor so far has been, OK, somebody blew up.
There's liquidity issues, finance for your cycle intact.
Right.
And now so now so now the consensus is that the broad consensus is wrong.
So now if the broad consensus is that there's this beautiful, perfect bottom in Q4, we all pile in and we're off to the races from there.
Everybody's saying, well, that's too much consensus, just like last time.
But I think that the consensus, the fact that the anti consensus move is now the part that is too much consensus.
You know, what's more consensus?
the bottom in Q4 or the part where that the general that type of consensus is wrong.
You know what I mean?
That's that's kind of what I'm painting is like who's more wrong the anti consensus.
That's how it worked last time or the the anti consensus original part.
I'm just saying the same word over and over anyways.
That's that's kind of what I'm waiting for.
All time high on the use of consensus.
I don't know which way that's going to resolve, but I know this.
I'm going to have more Bitcoin than everyone else when we get there.
So that's what I'm looking forward to.
Yeah, I don't really care which way that breaks as long as I am able to get the positions that I want.
It's kind of immaterial.
And John, always on the prowl for a deal in crypto.
And maybe you'll get another one this week.
John, thank you for all your thoughts, man.
And thanks, everybody, for listening.
I'll be back here on Mondays with John.
And I'll do a few more shows this week as well.
But from there.
Starting next week, you'll be in the hands, the wonderful hands of Mr.
Wartime Ethereum here as we ride out the tough summer and look to beautiful Q4.
Thanks, LG.
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