Speaker 1: Just having this very strong belief in what crypto and
Speaker 1: blockchain technology will become, and it will take a long time,
Speaker 1: but it will eventually become ubiquitous.
Speaker 2: You know.
Speaker 1: For us, it was like the right choice and basically
Speaker 1: looking at it as like our best risk adjusted return
Speaker 1: opportunity out there. You can not only make sure you
Speaker 1: can survive but also thrive in the tougher times as well.
Speaker 3: Does it make sense to eventually explore doing a basket
Speaker 3: of these assets, like maybe you hold Bitcoin with Solana
Speaker 3: or maybe Bitcoin, ETHERM and Solona.
Speaker 1: Right for us, we're all in on Solana. We do
Speaker 1: think that it is then will be the leading smart
Speaker 1: contract or high performance blockchain.
Speaker 3: This episode is brought to you by Uphold, which is
Speaker 3: a great crypto platform that makes it easy to buy, sell,
Speaker 3: and stake crypto assets. Uphold has over three hundred plus cryptocurrencies,
Speaker 3: including Bitcoin in all the top all coins, and they
Speaker 3: offer a crypto staking on over ninety crypto assets. I've
Speaker 3: been a user of the platform for many years. They
Speaker 3: are safe and reliable, they don't commingle or lend out
Speaker 3: your crypto funds, and they are one hundred percent reserve.
Speaker 3: You can review their transparency report. Uphold also offers an
Speaker 3: amazing rewards program where you can earn up the five
Speaker 3: point two five percent on stable coins. This rewards program
Speaker 3: also allows you to get twenty four hour early access
Speaker 3: to new tokens that they list, and to participate, you
Speaker 3: just simply have to open the app once per month,
Speaker 3: deposit fifty dollars once per month, and trade fifty dollars
Speaker 3: once per month. And the stable coins that they support
Speaker 3: includes Ripples, r l USD. You can earn up the
Speaker 3: five percent on that stable coin and five point two
Speaker 3: five percent on USBC. So if you'd like to learn
Speaker 3: more about Uphold and all the great services they offer,
Speaker 3: visit the link in the description. Hey, folks, welcome into
Speaker 3: the Thinking Crypto podcast. I'm your host, Tony Edward and
Speaker 3: joining me is Brian Rudik, who is the chief strategy
Speaker 3: Officer at UPEXI. Ryan, great to have you.
Speaker 2: Thanks so much for having me. Really appreciate it.
Speaker 3: Yeah, Brian, I'm excited to chat with you. UPEXI was
Speaker 3: one of the first publicly traded companies with a Salona
Speaker 3: Treasury strategy, so I want to dive into the details
Speaker 3: there and learn more. But let's kick it off with
Speaker 3: your background. Tell us about where you're from and what's
Speaker 3: your professional background.
Speaker 2: Yes, appreciate that. Yes.
Speaker 1: Brian Ruddick, chief strategy officer at Upexy, originally from Northeast Ohio.
Speaker 1: You grew up in the Cleveland area, went to school
Speaker 1: in North Carolina, grad school in Chicago, spent time in
Speaker 1: San Francisco in New York. But I spent most of
Speaker 1: my career in traditional finance. I was managing a book
Speaker 1: of bank stocks, always in this long short construct for
Speaker 1: funds like Citadel, Ballyasne, Millennium, and it was really there
Speaker 1: where some of the banks that I covered that were
Speaker 1: the crypto fiat on off ramps like Signature and Silvergate
Speaker 1: kind of pushed me down the crypto rabbit hole. Decided
Speaker 1: that there are so many wonderful use cases and benefits
Speaker 1: that this technology can bring that it will take some time,
Speaker 1: but it will be ubiquitous eventually. Want to be a
Speaker 1: part of it full time. So I moved in early
Speaker 1: twenty twenty one over to GSR, which is one of
Speaker 1: the largest firms a crypto been around for over a decade.
Speaker 1: They are the largest digital asset market maker, and I
Speaker 1: led their research function for four and a half years
Speaker 1: until I moved over to UPEXI to become their chief
Speaker 1: strategy officer.
Speaker 3: That's interesting because you know, you mentioned your backgrounds in
Speaker 3: TRADFI dealing with stocks and so forth and those type
Speaker 3: of assets, but now you have this convergence of crypto
Speaker 3: and publicly traded company and the crypto impacts as stock price.
Speaker 3: So it's kind of like the merging of these two worlds.
Speaker 3: What's that like for you? It's like you get to
Speaker 3: do your kind of your old job a bit, but
Speaker 3: also new things.
Speaker 1: It's been awesome. I've enjoyed every second of it. Yeah,
Speaker 1: I really think that this kind of hits on exactly
Speaker 1: my skill set and expertise. And I say that because
Speaker 1: Digira sid treasury companies are literally just banks, and so
Speaker 1: I think it's enabled us to really internalize and understand
Speaker 1: where all these great benefits come from. So if you
Speaker 1: think about micro strategy, it's literally been the best performing
Speaker 1: stock since August twenty twenty when it turned on it's
Speaker 1: bitcoin treasury strategy. It's more than tripled the return of
Speaker 1: bitcoin and it's been barely leveraged, so there has to
Speaker 1: be some value creation there, and so really comes from
Speaker 1: what I would call capital Marcus arbitrage. When they are
Speaker 1: issuing equity at two times book or two times NAV,
Speaker 1: they're essentially selling a dollar for two or buying bitcoin
Speaker 1: half off. It's how they've created twenty six billion worth
Speaker 1: of free bitcoin over the last six quarters for shareholders.
Speaker 1: And we can get into the math. I can give
Speaker 1: you an example. But the other way that I think
Speaker 1: about it is banks essentially borrow money from depositors, They
Speaker 1: pay an interest rate on that, and then they lend
Speaker 1: it to borrowers they pay, then they earn a higher
Speaker 1: yield on that, so they earn spread income, which is
Speaker 1: the difference between the yield on loans and their cost
Speaker 1: to deposits. And then the market will essentially is a simplification,
Speaker 1: but present value all of that future spread income added
Speaker 1: to the current book value, and then banks will trade
Speaker 1: above book. And we're the exact same way. Actually, so
Speaker 1: we borrow funds or raise funds from the capital markets,
Speaker 1: we invest into Salana. We are in the spread between
Speaker 1: the return on soul and our cost to capital. The
Speaker 1: market will then present value all that spread added to
Speaker 1: our NAV, and then that'll work out to something that is,
Speaker 1: you know, above one which we can then monetize for
Speaker 1: the benefit of shareholders.
Speaker 3: You know, I've never heard anyone categorize it as a bank,
Speaker 3: that these digital acid treasury companies are banks. And it's
Speaker 3: fascinating you the way you broke it down, because you
Speaker 3: are operating like a bank, even though it's you know,
Speaker 3: it's not fiat per se. It's you're using crypto assets.
Speaker 3: And you know, I want to break design in Layman's
Speaker 3: terms because there's still a lot of people who this
Speaker 3: concept is still foreign to them, Like why does holding
Speaker 3: a crypto asset increase the stock price? Is it simply
Speaker 3: that this asset continues to appreciate in value, and that's
Speaker 3: what's driving the volatility, is driving all this.
Speaker 1: So there's a couple of ways I could think of it.
Speaker 1: So I would say that didrasset treasury companies can and
Speaker 1: should trade it a premium to underlying NAB when the
Speaker 1: market has strong expectations of forward DIGITRA set returns. And
Speaker 1: so from my first example, you know, if they think
Speaker 1: that the return on the diditra asset will outpace the
Speaker 1: cost of capital, that company will earn spread every year
Speaker 1: and that will be added to the NAB and then
Speaker 1: that'll cause you to trade at this premium. Another way
Speaker 1: you could think about it is like folks just want
Speaker 1: to access crypto in the form of a familiar equity security.
Speaker 1: You saw that with Gray Scales g sol closed end
Speaker 1: Salona Trust. It routinely traded at a five hundred percent
Speaker 1: plus premium, and that was simply because folks wanted to
Speaker 1: access Solana in their SWAB account. And then the last
Speaker 1: reason I'd say is folks want access to these different
Speaker 1: value ACRUL mechanisms that you can't get with owning the
Speaker 1: tokens natively or in alternative instruments like an ETF. And
Speaker 1: these are things that dats can uniquely do. So you know,
Speaker 1: this is issuing equity above book, which is by definition
Speaker 1: a creative. This is things like staking or running validators
Speaker 1: to where you can earn additional commissions. And this is
Speaker 1: things like buying lock tokens at this discount for built
Speaker 1: in games for shareholders, and so add all that up
Speaker 1: and folks are willing to pay a premium. I've got
Speaker 1: other examples that can kind of explain this numerically, but
Speaker 1: I know that was a lot, so I'll stop there.
Speaker 3: No, that's great and Thank you for doing that, because
Speaker 3: I think it's important for folks that wrap their heads
Speaker 3: around this. I think there's still a lot of skeptics
Speaker 3: and there are people who just once again the education barrier.
Speaker 3: They just need to understand all these different moving parts
Speaker 3: and components and how it's playing out of why this
Speaker 3: is happening right the so what question is answered? So
Speaker 3: tell us about you PEXI, the history of the company
Speaker 3: and why it decided to make this move to have
Speaker 3: Solana as a treasury asset.
Speaker 1: Yes, so, Upexy is and was a consumer brands company,
Speaker 1: so it owns different consumer brands that it sells either
Speaker 1: direct to consumer or via Amazon. It was making and
Speaker 1: continues to make, roughly fifteen million in annually recurring revenue.
Speaker 1: It's roughly break even. And then candidly, I think Upexy
Speaker 1: was trying to figure out how to increase its growth opportunities.
Speaker 1: And before I'd even met UPEXI, they had announced back
Speaker 1: in February that they wanted to establish this crypto treasury.
Speaker 2: And while I was.
Speaker 1: At GSR, I was talking to our founder Chris and
Speaker 1: basically telling him we should try to create the micro
Speaker 1: strategy of Solana really wasn't rocket science, so you could
Speaker 1: just see all the value that micro Strategy had created
Speaker 1: and all of their wild success. And then sol Strategies,
Speaker 1: which is up in Canada's trading at five times it's
Speaker 1: nav and so having this background in equities is basically like,
Speaker 1: if micro Strategy is trading at two times, Soul Strategies
Speaker 1: is trading at five times, I've got reasons why a
Speaker 1: smaller company in one underpinned by a smaller token with
Speaker 1: these additional value accrul mechanisms should trade it a premium
Speaker 1: to something like micro Strategy. There's no reason why if
Speaker 1: we figured out how to create one, then we shouldn't
Speaker 1: trade at this premium valuation as well. And so at
Speaker 1: GSR we contacted investment bankers. They introduced us to UPEXI.
Speaker 1: Upexy was already going down this route, as I mentioned,
Speaker 1: And then it just made sense while I was at GSR,
Speaker 1: for GSR and for me to lead that investment in
Speaker 1: that one hundred million dollar pipe, which was actually the
Speaker 1: first large scale pipe for an old coin treasury company.
Speaker 1: And what I'd say is when we did it like
Speaker 1: that one hundred million was eye popping and kind of
Speaker 1: gave everybody the blueprint and It was really difficult to
Speaker 1: get to that one hundred million because like it was untested,
Speaker 1: and then as folks saw that, hey, this actually works,
Speaker 1: there is a reason why these companies should trade above
Speaker 1: book value, and people became more educated. You've seen like
Speaker 1: over one hundred of these now. But that was essentially
Speaker 1: how Upexy kind of pivoted into digital assets, and then
Speaker 1: from there it just made sense for me to join
Speaker 1: Upexy and continue to push on this with our management team.
Speaker 2: Oh.
Speaker 3: Absolutely, how much Solana are you currently holding and how
Speaker 3: much capital have you raised to purchase Alana?
Speaker 2: Yeah, we raised.
Speaker 1: One hundred million in their initial pipe essentially, and then
Speaker 1: we raised an additional two hundred million subsequent to that.
Speaker 1: Fifty million was in equity. One hundred and fifty million
Speaker 1: was in this very innovative in kind convertible note where
Speaker 1: there is actually very little risk for the investor or
Speaker 1: for the company because all the soul that is contributed
Speaker 1: as consideration for that's held in this triparty agreement, at
Speaker 1: this triparty arrangement, at this qualified custodian. So if at
Speaker 1: the end of the two years the investor hasn't converted
Speaker 1: to Upexy equity, they literally just get their soul backs,
Speaker 1: so they're basically in the same spot, but they have
Speaker 1: this essentrally free option to convert to upexy equity, which
Speaker 1: they would do if they were much better off.
Speaker 2: And so we've raised three.
Speaker 1: Hundred million, We've seen some appreciation in the price of soul,
Speaker 1: and we've been buying a lot of lock sool at
Speaker 1: this roughly mid teens discount, and so we own two
Speaker 1: million soul roughly right now, and the current market value
Speaker 1: is roughly three hundred and seventy five million, and that
Speaker 1: comes from both soul price appreciation and then that discount
Speaker 1: as well.
Speaker 3: Mentioned a qualified custodian, Are you able to tell us
Speaker 3: WHOI custodian is.
Speaker 1: I'm not sure if we've publicly well, we have disclosed
Speaker 1: Bitgo as one of ours. We put out a pressure release,
Speaker 1: and then we've got a couple others. We diversify amongst
Speaker 1: them for best operational practices, and I don't think that
Speaker 1: we've publicly disclosed it. And so just as public company
Speaker 1: that they could can't say.
Speaker 3: Oh got it. Okay, Now, this is a foll up
Speaker 3: question to maybe something I asked you earlier, and that
Speaker 3: is why crypto and not real estate. Why not gold?
Speaker 3: Is it because crypto has a much higher upside and
Speaker 3: because it's still a young asset class. Is that kind
Speaker 3: of the ethos of why crypto? Yeah, So, in my view,
Speaker 3: there's all these really wonderful use cases and benefits that
Speaker 3: you get with crypto that you don't get with other technologies.
Speaker 3: These are things like the removal of intermediaries that did
Speaker 3: like the democratization of value exchange, and new constructs around ownership,
Speaker 3: governance and business models. And it's such an nascent technology
Speaker 3: that anytime that you're this early, there's going to be
Speaker 3: a lot of volatility and speculation around what this could become.
Speaker 3: But actually, if you look at the underlying fundamentals, if
Speaker 3: you look at like crypto users or number of developers
Speaker 3: or number of transactions, like all this stuff is up
Speaker 3: into the right and so we're just looking at that
Speaker 3: and at the end of the day, like valuations and
Speaker 3: values will follow fundamentals, and just having this very strong
Speaker 3: belief in what crypto and blockchain technology will become and
Speaker 3: it will take a long time, but it will eventually
Speaker 3: become ubiquitous. You know, for us, it was like the
Speaker 3: right choice and basically looking at it as like our
Speaker 3: best risk adjusted return opportunity out there, Oh for sure.
Speaker 3: And so what do you think the timeline might be?
Speaker 3: This is a hard question for the lifespan of this strategy,
Speaker 3: because eventually there's going to be more liquidity. These assets
Speaker 3: are going to be less volatile. You mentioned, they'll become
Speaker 3: ubiquitous where they're everywhere and everybody can access it. So
Speaker 3: do I necessarily need to go buy upexy stock fifteen
Speaker 3: years from now, just as an example, I don't know this.
Speaker 3: Once again, this is a very different asset class in
Speaker 3: a sense that many of it of the supply is hardcap,
Speaker 3: it's globally distributed to you have liquidity coming in from
Speaker 3: all parts of the world. So what is like your
Speaker 3: time span or timeline for the you know, for this
Speaker 3: strategy so to speak.
Speaker 1: Yeah, I think it remains to be seen. But what
Speaker 1: I note is like a lot of this is predicated
Speaker 1: on any treasury company. So a couple things first is, uh,
Speaker 1: when analyzing any treasury company, the biggest determinant of how
Speaker 1: they'll do is the token that they're underpinned by. And
Speaker 1: so for us, we feel very strongly that Solana is
Speaker 1: likely the endgame winning high performance blockchain. You know, you
Speaker 1: have to not only be sure that the token will
Speaker 1: be around in five years, where most all coins really aren't,
Speaker 1: but also that it will do well. And so for
Speaker 1: one like we feel very fortunate to be underpinned by Solana,
Speaker 1: and that was an intentional choice on our part. The
Speaker 1: second thing is a big key piece that the business
Speaker 1: model is predicated on is trading at this premium to book.
Speaker 1: And so in my mind when you ask like when
Speaker 1: will the part stop, it's like when these companies stop
Speaker 1: trading at a premium, I would actually argue that you
Speaker 1: can and should trade at a premium like we're talking
Speaker 1: about during times when folks like forward view of crypto
Speaker 1: is positive, and then when folks think that you're not
Speaker 1: going to out earn your cost to capital, you should
Speaker 1: trade it a discount. And it just turned to micro strategy,
Speaker 1: and you know, you can, man, you can measure the
Speaker 1: efficacy of their treasury operations by looking at in their
Speaker 1: increase in bitcoin per share. And so twenty twenty four
Speaker 1: it increased seventy three percent, twenty twenty one it was
Speaker 1: something like fifty percent, and then then two bear markets
Speaker 1: still increased but was more like mid single digits. So
Speaker 1: all that's to say is I would argue that the
Speaker 1: model can and likely will go on pause during the
Speaker 1: inevitable bear markets, but then you can really you know,
Speaker 1: will eventually return to this bull market and then you know,
Speaker 1: it's likely that what we've seen in the past with
Speaker 1: micro strategy is like the companies will then return to
Speaker 1: that premium multip which you can then monetize for shareholders.
Speaker 2: So kind of remains to be seen.
Speaker 1: Will EBB and flow, but I think like the model
Speaker 1: is here to stay, and you know, depending on market conditions,
Speaker 1: can really utilize that and accrue a lot of value
Speaker 1: for shareholders through it.
Speaker 3: And you know, some of what you mentioned I think
Speaker 3: answers this question, but I want to make sure I
Speaker 3: get every base covered here. So what would you say
Speaker 3: to people who would say, well, I can go invest
Speaker 3: in a Salona ETF, why should I go through you
Speaker 3: PEXI as a solo treasury company.
Speaker 1: I would say, for access to these different value a
Speaker 1: cool mechanisms. So an ETF can't issue equity above book
Speaker 1: and pull in additional accretion in ETF, well probably will
Speaker 1: be able to stake, but right now you know they're
Speaker 1: not able to stake and an ETF can't go out
Speaker 1: and buy lock sool out of fifteen percent discount.
Speaker 2: So for all these.
Speaker 1: Reasons, my view is if you have a solid view
Speaker 1: of like the medium term for a cryptotoken, a digital
Speaker 1: asset treasury company actually could be the best way to
Speaker 1: play it for many investors.
Speaker 3: And then Solana offers saking capabilities. Are you staking any
Speaker 3: of your soul? And if you are, are those rewards
Speaker 3: being paid as dividends or are they just reinvested.
Speaker 1: We are staking substantially all of our Solona. We're actually
Speaker 1: not running our own validators. We're delegating to a bunch
Speaker 1: of top validators. The reason for that is what we're
Speaker 1: seeing is a lot of validators simply want steak, and
Speaker 1: so most of them are willing to pass back literally
Speaker 1: every economic possible. So for us, if we were to
Speaker 1: run our own validator, unless we thought we were going
Speaker 1: to attract a lot of delegated soul and a commission
Speaker 1: that we could charge on top of that, we actually
Speaker 1: lose money by running our own validators. And I kind
Speaker 1: of think it keeps the story simple for traditional investors
Speaker 1: as well. Having been on the other side, I tend
Speaker 1: to think that people don't really invest in things they
Speaker 1: don't understand. You have to start to explain proof of
Speaker 1: state consensus mechanism. It's a lot simpler to tell folks like, hey,
Speaker 1: we can earn eight percent on this. You know, you
Speaker 1: don't see micro strategy out there, you know, running bitcoin
Speaker 1: mine like bitcoin mining, or running rigs themselves. So we're
Speaker 1: staking it all and then we get that in kind, and.
Speaker 2: So it just adds to our soul per share. That's great.
Speaker 3: Are there any defied components or it's too early, or
Speaker 3: are you exploring anything that you can do to earn
Speaker 3: additional yield.
Speaker 2: We're starting to.
Speaker 1: But what I'd say is we're trying to maximize shareholder value,
Speaker 1: but in a risk prudent manner, and I think that
Speaker 1: is actually somewhat unique among different dats out there. And
Speaker 1: so our view is we're not going to take on
Speaker 1: too much leverage to where you could potentially get in trouble.
Speaker 1: Micro strategy will only lever up to twenty percent, and
Speaker 1: NAVE we're at roughly eleven percent right now. We're dealing
Speaker 1: with an asset that's you know, much more volatile and
Speaker 1: Bitcoin number two we're not doing a lot of like
Speaker 1: on chain dgen trading. Like my personal view is like
Speaker 1: if we came out and you know, this is not guidance,
Speaker 1: but finger in the air, if we issued equity at
Speaker 1: our current multiple, you could see a fifty percent increase
Speaker 1: in our soul per share, and assuming that that multiple holds,
Speaker 1: like our stock would move commensurately with that. And just
Speaker 1: this ability to intelligently issue equity and increase soule per
Speaker 1: share is just so powerful that in my mind, it
Speaker 1: doesn't make a lot of sense for us to start
Speaker 1: looping you know, LSTs and trying to earn an additional
Speaker 1: like two percent per year or something like that. And
Speaker 1: I think we would consider it when we get additional
Speaker 1: regulatory clarity, but I think like, we're not fully there yet.
Speaker 1: And then the last thing that we're doing is we're
Speaker 1: using like risk and operational best practices, so as I mentioned,
Speaker 1: using only qualified custodians and top validators, and we're diversifying
Speaker 1: amongst them. And we think that this positions us really
Speaker 1: well to whether any market environment and is a strategy
Speaker 1: that will resid not only with like crypto investors, but
Speaker 1: also traditional investors as well.
Speaker 3: So on that note, right, in mitigating risks, reducing your
Speaker 3: risk not being over levered and so forth. How are
Speaker 3: you preparing for market downturns and bear markets right as
Speaker 3: we've seen the cyclical pattern of even as stock market right,
Speaker 3: things go up and down over time depending on what
Speaker 3: the Fed's doing, global liquidity and all that stuff. How
Speaker 3: are you preparing for that? And you know there's a
Speaker 3: lot of companies doing this. There's talks of some of
Speaker 3: these companies might blow up, and not necessarily because of
Speaker 3: the crypto assets, but maybe mismanagement. But I think you
Speaker 3: address some of that right with the things that you
Speaker 3: guys are doing to avoid situations like.
Speaker 1: That hundred percent, And so I think it's about being
Speaker 1: disciplined in the bowl market. So, I mean, we've disclosed
Speaker 1: that we have a a line where we can draw on,
Speaker 1: and we have forty million that we've pulled on this
Speaker 1: This is where like that forty million relative to our
Speaker 1: three hundred and seventy five million of soul NAV works
Speaker 1: out to like low teens leverage. It's tempting because we
Speaker 1: have more on that line that we could draw and
Speaker 1: we obviously have this very positive view of Solana, but
Speaker 1: we don't want to do anything to where we'd ever
Speaker 1: be forced to sell, and particularly where we'd be forced
Speaker 1: to sell at the wrong time. And so for us,
Speaker 1: it's just about being very disciplined in the good times
Speaker 1: so you can not only make sure you can survive
Speaker 1: but also thrive in the tougher times as well.
Speaker 3: This trend of digital acid treasury companies, do you see
Speaker 3: this continuing to grow and more companies that are publicly traded,
Speaker 3: whether they're in the NASDAK Top one hundred or S
Speaker 3: and P five hundred, starting to look at this strategy
Speaker 3: or would it then get too saturated where maybe they
Speaker 3: wouldn't be the same incentive or volatility that would be
Speaker 3: needed to get the benefits, If that makes sense, I think.
Speaker 1: That you'll see more and more companies launch treasury strategies.
Speaker 1: And it's almost as simple as like most of the
Speaker 1: companies that have embarked on such a strategy have seen
Speaker 1: their stock really work. I think management has a fiduciary
Speaker 1: duty to try to increase its stock price, and so
Speaker 1: I think you'll continue to see that. I do think
Speaker 1: that there's likely only to be three to five tokens
Speaker 1: where this strategy will work long term, because, like I said,
Speaker 1: ninety five percent of all coins are down ninety five
Speaker 1: percent over five years. There's only a handful that I
Speaker 1: think I can be confident on that will perform really
Speaker 1: well over a five year period, and then within that,
Speaker 1: I actually think they'll only be like two to three
Speaker 1: winners within each And the reason why I say that
Speaker 1: is you need to kind of get to this breakout
Speaker 1: size and volume to really employ the full capital markets
Speaker 1: flywheel or micro strategy model. For instance, we're trading it
Speaker 1: roughly two times on this like fully loaded m NAV,
Speaker 1: like when you make adjustments for things that kind of
Speaker 1: obfuscate the real or true underlying value that the market's
Speaker 1: ascribing to us. And so the way that micro strategy
Speaker 1: actually sells stock at two times is through like an
Speaker 1: ETM or in equity line. And in that instance, you're
Speaker 1: actually a bit limited by your volume because you can
Speaker 1: typically only sell like one to three percent of your
Speaker 1: volumes without pushing down your stock price. And so an
Speaker 1: ATM or an equity line is essentially a way to
Speaker 1: just the company to sell equity right out into the market.
Speaker 1: You really need to get to sufficient size to where
Speaker 1: you can get liquidity in the common, to where you
Speaker 1: can actually sell you know, hundreds of millions of worth
Speaker 1: of you know, your equity into the market each week,
Speaker 1: and then you can use that to buy digital assets.
Speaker 1: And you're seeing that with bitmind Immersion, you're seeing that
Speaker 1: with sharp Link. We are working really hard to get
Speaker 1: there as well. We're hoping and feel confident that we can,
Speaker 1: you know, maintain our lead and continue to be the
Speaker 1: canonical Salona Treasury company. But yeah, so for that reason,
Speaker 1: I think that there's likely to be two to three
Speaker 1: winners in roughly three to five tokens, and then the
Speaker 1: rest I think can make short term gains. But you know,
Speaker 1: I wouldn't you know, want to be an investor for
Speaker 1: five years and a lot of the other ones.
Speaker 3: Oh sure? And does it make sense to eventually explore
Speaker 3: doing a basket of these assets, like maybe you hold
Speaker 3: Bitcoin with Solana or maybe Bitcoin, ETHERM and Solona, right,
Speaker 3: or is it better to just stick to one asset?
Speaker 3: You know? What are some of the considerations.
Speaker 2: There for us. We're all in on Solana.
Speaker 1: We do think that it is like then will be
Speaker 1: the leading smart contract or high performance blockchain. I do
Speaker 1: think that when you go with one token, you keep
Speaker 1: the story simple. If we did a basket, and we
Speaker 1: added like chain link and pythe and you have to
Speaker 1: explain to traditional investors what a cross chain bridge and
Speaker 1: an oracle is. I think like maybe they're out. I
Speaker 1: think Reserve one is this fact that launch that is
Speaker 1: using like a basket. So I think that there already
Speaker 1: are some out there employing that. But for us, kind
Speaker 1: of keeping it simple and just being able to tell
Speaker 1: folks like, hey, like we really believe Solana is essentially
Speaker 1: NASDAC on chain enabling Internet capital markets, and you know,
Speaker 1: Upexy could be the best way to invest in Solana
Speaker 1: and to play that eventually you know, continuing to grow.
Speaker 1: Then for us, like that was the right choice now.
Speaker 3: I saw it. Just recently you brought Arthur Hayes, cryptog
Speaker 3: founder of course has his own fund. I had him
Speaker 3: on the pod not too long ago, as part of
Speaker 3: your advisory committee. Tell us about why Arthur and how
Speaker 3: he's going to be helping you guys.
Speaker 1: Yeah, we announced the establishment of our advisory committee a
Speaker 1: couple of weeks ago, and I think it provides a
Speaker 1: ton of benefits. So we're backed actually by fifteen or
Speaker 1: sixteen of the leading crypto vcs. Mouse from obviously it's
Speaker 1: his family office is one of them. So we maintain
Speaker 1: pretty close relationship with each of them. They're adding a
Speaker 1: ton of different value in many different ways, and then
Speaker 1: we wanted to formalize that relationship a little closer with
Speaker 1: you know, some folks like Arthur who obviously like he's
Speaker 1: a legend in crypto. He knows so many people. We
Speaker 1: met with him earlier this week, and I mean he
Speaker 1: was providing all sorts of great advice and then obviously
Speaker 1: like he's got this really great visibility and half of
Speaker 1: adat the game for DATS is like increasing your visibility
Speaker 1: as well.
Speaker 2: And so he's.
Speaker 1: Already bringing us tremendous value. And we've announced him as
Speaker 1: the first inaugural member of the committee. We'll have four
Speaker 1: more folks coming on, some of which we've signed, some
Speaker 1: of which we're still looking for and hoping to have
Speaker 1: as many big names as possible from both crypto and
Speaker 1: TRADFI to really help us both with their expertise and
Speaker 1: with their visibility and access to capital.
Speaker 2: Really.
Speaker 3: Oh absolutely, and what's on your ROMap? I know you
Speaker 3: touched on quite a few things, but anything else you
Speaker 3: want to highlight.
Speaker 1: Will continue to try to be as visible as possible.
Speaker 1: We've talked about and we've publicly disclosed we want to
Speaker 1: hire more folks, ideally with like a built in voice,
Speaker 1: either in Tradfi or in Solana. I think some of
Speaker 1: this can be through like this advisory committee or this
Speaker 1: could be a more permanent position within the company, and
Speaker 1: we've said that publicly before, and so really just continuing
Speaker 1: to push on the visibility front and then on the
Speaker 1: I guess intelligent equity issue inside. Like the business model
Speaker 1: of these companies is to raise capital as much capital
Speaker 1: as possible in this risk prudent and accretive fashion, and
Speaker 1: so we're hoping to be successful there as well, and
Speaker 1: continuing to raise capital to invest in Hoddle as much
Speaker 1: Solana as possible.
Speaker 3: I would love to get your take on the broader
Speaker 3: market at large. Obviously, we just had the Genius Act
Speaker 3: pass that's a stable coin bill. We got the clarity
Speaker 3: the Market Structure Bill coming up September or early October.
Speaker 3: You know, what is your outlook with these legislation pieces
Speaker 3: in place, trad FI coming all in on crypto digital
Speaker 3: acid treasury, companies buying etaps are going to be launch
Speaker 3: by the SEC, and much more. What are your thoughts
Speaker 3: and outlook on the market.
Speaker 1: Depends on the timeframe. I'd be a bit more positive
Speaker 1: near term just because these dats. I think you'll start
Speaker 1: to see more and more large scale dats and more
Speaker 1: and more tokens, And I think like it's probably in
Speaker 1: my mind, the biggest reason why EATH moved up from
Speaker 1: twenty seven hundred to forty seven hundred. I think you'll
Speaker 1: start to see that with other tokens. But X that
Speaker 1: in my mind, anytime you talk about like just the
Speaker 1: coming months, it'll probably ebb and flow with the macro,
Speaker 1: with traditional equity markets, with what's happening with like employment, inflation,
Speaker 1: and monetary policy. But what I'd say is, if you
Speaker 1: ask me over three years, I'm supremely bullish. Reason for
Speaker 1: that is because I do think we'll get market structure legislation,
Speaker 1: as you mentioned, likely next year. I think this has
Speaker 1: been the biggest thing always holding crypto back in the US.
Speaker 1: I think that all of these big tech companies and
Speaker 1: big finance companies haven't really wanted to disanger media themselves,
Speaker 1: and certainly so if it would bring on additional regulatory
Speaker 1: and legal risk. And now once we get market structured legislation.
Speaker 1: They're going to have to because if they don't, they'll
Speaker 1: be disintermediated by those who do.
Speaker 2: And it's really these biggest.
Speaker 1: Companies that have billions of customers, built in trust, billions
Speaker 1: in capital, and top developers, and so I think we
Speaker 1: could actually see a step function change in usage and development.
Speaker 1: This will be something like Google Chrome adding a built
Speaker 1: in crypto wallet, Amazon accepting stable coins, and I really
Speaker 1: think we could be on the precipice of onboarding the masses.
Speaker 1: And I just think like anybody like to even tangentially
Speaker 1: touching crypto, it would be incredibly well positioned to benefit
Speaker 1: from that.
Speaker 3: Yeah, I can't wait to for the day those things
Speaker 3: are happening that you outline, And I think maybe as
Speaker 3: soon as market structure is in place, I think you're
Speaker 3: going to probably see a lot of announcement. It could
Speaker 3: be folks are working on some of these things, but
Speaker 3: to your point, like they can't release it to the public,
Speaker 3: they can't have the public access there right now. But
Speaker 3: once the clarity there, it's it's game on. Awesome, Brian,
Speaker 3: I love what you guys are doing, and it sounds
Speaker 3: like you got a great setup and you guys are
Speaker 3: taking the right approach to this. I got some wrap
Speaker 3: up questions here for you. First, if you could create
Speaker 3: your own metaverse, what would the theme be?
Speaker 1: Oh boy, I'd say outside of work, I spend most
Speaker 1: amount of time with my two daughters, and I think
Speaker 1: that they would enjoy a metaverse more so than I would.
Speaker 1: So I'd probably create one with things like castles and
Speaker 1: unicorns and bring my girls and they would uh yeah,
Speaker 1: just have a ball with it. Nice rapid fire questions
Speaker 1: favorite food Tankatsu, Ramen, favorite musician or band MGK, favorite
Speaker 1: movie Gladiator, favorite book How to Win Friends and Influence
Speaker 1: People by Dale Carnegie.
Speaker 3: And when you're not working at UPEXI, what are you
Speaker 3: doing for fun?
Speaker 2: Spending time with my family.
Speaker 3: Brian, great stuff, looking forward to the future. Updates around you, Pacsi,
Speaker 3: But thank you so much for joining me.
Speaker 2: Thank you really appreciate it.