I think it's good to do it. I just think that the real key here is if you want to create the ideal credit instrument, you would like to sell $10 billion of it. And that means you need to back it with $50 billion of equity capital. And then if people like it, you might get to a billion dollars of liquidity, right? So you're trying to get to a billion of liquidity a day, 10, 20, 30 billion of AUM backed by 100, 200 billion dollars worth of equity. It is a scale business and we happen to be fortunate enough to have entered the business early and inadvertently created the scale, which now is a big competitive advantage for us.
Mhm. Hey guys, welcome to Everyday Finance. Over 17 years and hundreds of billions of dollars in institutional capital have established Bitcoin as what Michael Saylor argues is the planet's dominant digital capital network, leaving all other crypto assets behind in the race for that title. Rather than viewing market drawdowns as warning signs, Saylor analyzes price crashes through the 200 week moving average, treating it as the network's true book value and cost basis, where trading near or below this line signals a distinct discount that attracts value-seeking investors rather than momentum chasers. This structural floor creates a self-stabilizing market dynamic as the vast pool of sidelined global capital currently held in traditional assets like gold, real estate, and equities only needs to rebalance a fraction of a percentage into Bitcoin during these historical discounts to trigger meaningful upward price momentum and reinforce its long-term institutional thesis. And in politics, he said, 'Yeah, you know, you have to say the same thing 42 times before people remember what?'
Always 42. Nice. So whenever you're introducing a new idea into the economy or into the world, something that if it's truly revolutionary, there's no precedent for it, there's no analogy to it. You have to be prepared to communicate and over communicate until the world starts to grasp that new phenomena.
Mhm. Yeah. Have you been surprised with anything that people don't understand about stretch or is it you just kind of par for course? Oh, people don't understand this.
Actually, I've been pleasantly surprised at how rapidly it's been embraced. I mean, it's the fastest growing credit instrument in the world. You know, it's one of the fastest growing products in the world. You know, and so it's not even 1 year old and we've already got a groundswell of support. And you know, we were showing yesterday 350% annualized growth rate. So, I think if you have a growth rate of north of 100%, you really don't have the right to complain about people not understanding your product. It doesn't surprise me that you know, traditional investors that haven't heard of it are surprised because most investors haven't really invested in preferred stocks. Most investors don't really understand much about Bitcoin in general. If you walk down the street and you ask people, well, would you like a bank account that pays you 11%? The answer is universally, yeah, of course. What's the catch? And so a very healthy human response is it sounds too good to be true. I have a robot that will do all your housework that will cost you $100 a month and cook and clean for you. Would you like it? Yeah, sure, I'd like it, but what's the catch? And you know, the science fiction movies always have a catch where the robot gets smart, decides to steal your house or something.
You know, and if I say, you know, I got a car that'll drive itself. Would you like the car to drive itself? You can get in the car and sleep on your way to the destination. Like, well, you sure? I would, but what's the catch? Well, you know, is it always going to work? So, if you have magic technology that's based upon AI or based upon digital assets or digital capital, the initial reaction of a healthy person is going to be, 'Yeah, I want it, but let me just do my diligence.' And that's totally fine. I think that's happening everywhere in the world at a high rate.
Nice. And in this regard?
The way to think of it this is like enriched uranium. You need a crypto reactor to create credit. So, for every dollar of equity capital of Bitcoin capital, you can create about 10 to 20 cents worth of digital credit. So, if you have $100 billion worth of Bitcoin capital, you could create 10 to $20 billion worth of credit per year. You would need a public company. It would need to be exclusively invested in Bitcoin. So, if a bank wanted to do this, they would need to create some structure that has 50 to $100 billion worth of Bitcoin held in one entity, and then they would have to go do an IPO and take a digital credit product public. If they were to do that, we would welcome that because that would mean that another big company is buying $100 billion of Bitcoin, and I think that would be good for everybody in the Bitcoin space. If that were to happen, our Bitcoin price would go through the roof. We would end up inheriting another 50 or $100 billion worth of Bitcoin on our balance sheet in short order.
Right? So, it's not a bad thing if they copy us. It's just unlikely that they will because if you're a bank, your choice would be I can invest $100 billion and create my own digital credit instrument like STRC, or I can offer digital money accounts to all of my customers to pay 8% and I can power it with STRC and I can keep two or three hundred basis points of the money. So, I could collect 100 billion or a trillion dollars of other people's money. I could make 3 to 40 billion a year with no risk.
Right. Yeah, that makes sense.
And I could do it by partnering with Strategy and buying STRC and I could do that starting tomorrow.
Or I can create my own crypto reactor and I create my own. And I think to be clear, there will be more digital credits. Seda is a very successful digital credit instrument offered by Strive. It's not as big as us. It won't have the same amount of liquidity. Right? So, we will simply provide the most liquid, you know, most well-known digital credit. And if 10 other companies create other digital credit instruments, that's probably good for the ecosystem. And there are some people that will always want to diversify. They'll want two or three. And there are traders that will want to trade in and out. They'll want to buy Seda, sell it, buy Stretch, sell it, etc. So, I think it's good to do it. I just think that the real key here is if you want to create the ideal credit instrument, you would like to sell 10 billion dollars of it. And that means you need to back it with 50 billion dollars of equity capital. And then, if people like it, you might get to a billion dollars of liquidity, right? So, you're trying to get to a billion of liquidity a day, 10, 20, 30 billion of AUM backed by 100, 200 billion dollars worth of equity. It's a scale business and we happen to be fortunate enough to have entered the business early and inadvertently created the scale, which now is a big competitive advantage for us.
