How Bitcoin Companies Are Aligning Globally

Right. Thank you, Greg. What's up? How are we feeling? Okay, that's that day two hangover right there. The room is looking pretty full though, so there we go. I heard somebody. Thank you. We're excited. Can I just say, today I've been locked away in meetings for most of this event, as with every conference, and today I got to walk the exhibitor floor and spend a little bit of time in here. The energy of this event is fantastic, and this is why we do this event. I hope you all are having a good time. Let's keep the energy flowing.

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Absolutely, David, you're jumping ahead a little bit though, because some people don't know who you are, believe it or not. So we're going to start with introductions.

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I just want to say thank you to Greg for that hype job coming out on stage. I'm David Bailey, I'm CEO and chairman of Nakamoto. Nakamoto, as of February, is the owner of BTC Inc., which organizes this conference. We're very proud to have this be the first Nakamoto conference. We are trying to build the world's number one most recognized Bitcoin company. We want Bitcoin operating companies and a Bitcoin treasury, and we want to power the future of Bitcoin in the capital markets for the world.

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I'm Alexandre Laizet, director of Bitcoin strategy at Capital B, Europe's first Bitcoin treasury company. I would like to say that I am extremely thankful to be on this panel together with great leaders of the space. I would like to thank David for his leadership with the best Bitcoin conference in the world, and not only retail, please, not only the retail one, but as well the institutional one.

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In terms of institutional Bitcoin adoption, it's now 2,000 institutions that are coming here, with more than 10,000 attendees and much more. I think this conference specifically has contributed to Bitcoin adoption in a way that scales to the world, and I'm very thankful for that. So thank you, David.

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And as well to Dylan, because the inspiration of Metaplanet and its rise, its success, and its incredible growth has really sparked our interest at the beginning at Capital B. We might not be here today if it were not for Strategy, for Metaplanet, for you, and George as well. Bitcoin for Corporations is going to be the most important professional organization on earth because it's based on Bitcoin and it's powered by Bitcoin treasury companies. So thank you all.

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My intro will maybe be a bit shorter. Thanks everyone for being here. It's my sixth conference. Time does fly in the Bitcoin world. I'm head of Bitcoin strategy at Metaplanet. We're a Tokyo Stock Exchange listed company on a Bitcoin standard, and we're the largest non-U.S. publicly traded Bitcoin holder.

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Awesome. Thank you. We are talking about how Bitcoin companies are aligning globally. Again, my name is George Mekhail. I'm the managing director of Bitcoin for Corporations. We are a professional executive network of Bitcoin treasury companies and other Bitcoin companies who run some sort of Bitcoin playbook. We're up to about 43 member companies now, including the three companies represented here on stage.

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We're talking about collaboration, competition, and the difference between traditional companies versus Bitcoin companies. I want to start by asking the panel to help the audience understand the different dynamics, maybe the game theory around why competition looks different in the Bitcoin ecosystem compared to the legacy corporate space.

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I kind of think of Bitcoin sometimes as a decentralized corporation. That's not a perfect analogy, but owning Bitcoin is like holding a share in this corporation. When Bitcoin goes up, anyone who holds shares in it is a winner. From that perspective, the better it does, the better Capital B does, the better we do.

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Where the competition comes in is that we each have our own P&L within the corporation, so we want as much capital on our P&L as possible. We want to have as much individual success as possible. But a rising tide truly lifts all boats with Bitcoin companies, and not just Bitcoin companies, but the Bitcoin ecosystem and community as a whole.

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In terms of ways that we collaborate, Nakamoto, through our asset manager, is a major shareholder of both Metaplanet and Capital B. We actually just launched a new product at the conference this week, our first digital credit fund, where we're going to be buying the prefs of Strategy and Strive. We have a cool model of how we're doing it.

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Each of these different companies, as they progress on the frontier of what's possible in the capital markets, provides a new floor for people to build on top of. I can't wait for Metaplanet to issue their prefs at some point in time. The more prefs that are out there, the better this fund product can be. The more diversified its holdings can be, the better the outcome for us. So as we keep pushing it forward, we open up a new design space where we can grow the business and make money for the entire ecosystem.

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The world has never needed Bitcoin so much. There is geopolitical uncertainty and macroeconomic uncertainty. Bitcoin gives peace of mind for everyday people and for corporations, because you can associate yourself with the asset on earth that has the power to bring growth for you and for your corporation.

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What Bitcoin treasury companies are doing, and what we are doing over in Europe, is taking Bitcoin as the cornerstone asset of the balance sheet and bringing Bitcoin adoption to the continent. In Europe, you have one of the highest levels of taxation in the world, you have a lot of security issues, and at the same time you have the second-largest credit market in the world. So it makes a lot of sense to bring Bitcoin to brokerage accounts and within the banks.

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In the last few weeks in France, we've had a systemic bank launch a Bitcoin offering, and we've had Amundi, Europe's BlackRock, launch a Bitcoin ETP. It's accelerating at a pace that I think is not really appreciated. On top of that, you have the growth and success of digital credit, with STRK from Strategy, Strive, and many more to come. Their role is really to bring that digital credit adoption toward Europe.

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We've had a lot of shareholders, 20,000 shareholders, get to Bitcoin through Capital B. For the 99% of the population that cannot withstand the volatility of Bitcoin, digital credit will be a great answer and will provide a lot of inflows to the space. As you said, the success of the product from Strategy enables more success for us to launch a similar product over in Europe, and will enable the success of Strive, Metaplanet, and many more.

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I think the key takeaway from this conference is that everybody in the institutional areas is organizing, structuring, and launching digital credit instruments, digital credit funds, digital credit everything that you can imagine, along with tokenization and everything else. The investment banks are laser focused on digital credit as well. This space is going to explode. You can already see that STRK is buying five times the supply of Bitcoin, and this is not sustainable as the Bitcoin price goes up.

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Dylan, would you agree this is a zero-sum game, or are we all kind of playing together in some ways and watching the market expand?

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I think it's definitely a positive-sum game with Bitcoin, and that's different than other industries. Everybody here on this panel has an experience where Michael Saylor, the leading visionary and executive in this space and industry, has personally, one-on-one, laid out the playbook and explained how to navigate this and that. I don't think you can imagine that in any other industry. Would Elon Musk give the playbook to his competitor? No, he's focused on his business.

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There is something beautiful about that. Everybody is coming together, and everybody's success is very much building on top of everybody else.

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It is a unique dynamic. I remember one of the first things that one of the CEOs of these companies said to me when we first started Bitcoin for Corporations was that we were providing cover in a lot of ways. It was one thing for Saylor and Strategy to be out there, the first company and the only company doing this. But once additional companies started entering the fray, following the playbook, and once we created a network that legitimized this, I think it helped these companies feel like, okay, this is an actual thing that's happening. It's not just one person out there.

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Part of the dynamic is also that we're still early. I guess we're still just getting started. People don't really even know what this movement is capable of or how far it will go. But it's not going to be early for very long. We're getting into the later stages. Do you think this is the last cycle that we're going to see this flood of treasury companies?

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Everybody here is interacting with Bitcoin in some way. Everybody here came to a Bitcoin conference. So when George says it's early, maybe you're like, well, it doesn't feel early. I've known about Bitcoin for five years. But the reality is, and this is something I didn't fully appreciate until sitting on this side as an operating company talking to various classes of institutional investors, 99% of the capital in the world can't buy Bitcoin. They can't even buy Bitcoin ETFs.

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These big pools of capital, trillions and trillions of dollars, have mandates, and they can't buy Bitcoin. They can't buy commodities, and they can't buy funds or ETFs. Some of them can only do one thing. Some of them are fixed income. Some of them are equity investors. Some of them are long-short or convertible arbitrage.

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A lot of Bitcoiners, including myself, had this vision or thesis that Bitcoin wins, and hyperbitcoinization is this event, and at some point Bitcoin is worth 1 million, 5 million, or 10 million dollars equivalent at some point in time. But what that actually looks like, if you're a Bitcoin maximalist in that fashion, doesn't happen without all of this happening. It doesn't happen without big bad BlackRock and Wall Street coming in and institutionalizing the asset.

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What do you think Bitcoin winning looks like? It looks like $200 trillion flooding into the market in some way or some form. There's private credit, equity investment, preferred investment, senior debt. These are pools of capital that are latent and ready to be tapped into. The genius of Michael Saylor and Strategy from 2020 onward was realizing that, and then creating an instrument for each of those pools.

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STRK is a big TAM. Everybody wants no volatility and high yield. I think that's the golden goose. But a lot of idealist Bitcoiners who think Bitcoin is going to go to $10 million simultaneously dislike Wall Street or dislike the treasury companies. In my opinion, that's very paradoxical. This is what Bitcoin winning looks like.

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Are either of you surprised by what's happening, or do you feel like institutional adoption was always going to be inevitable, even through a Bitcoin maximalist lens?

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As long as the technology isn't being changed, and it's the same Bitcoin yesterday as it is today, and it's the same Bitcoin tomorrow as it is today, then yes. These companies have no entrenched advantage over any other user. BlackRock has to play by the same rules that someone who owns $10 of Bitcoin has to play by.

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This is us eating the financial system. It's us eating the capital markets. At the end of the day, for hyperbitcoinization to happen, every financial institution, every corporation, and every economic agent in the world is going to have to use Bitcoin. We don't get to draw a box around certain groups of people and say these people don't get to use Bitcoin. That's not how Bitcoin works.

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In terms of where we are in this process, I think we're at the very, very early stages. It's wild to me that only a couple hundred public companies own Bitcoin on their balance sheet. When I look at the cap tables of different treasury companies that are out there, there is a lot of commonality between the shareholder bases. I wouldn't be surprised if the actual individual shareholders on cap tables, minus MicroStrategy because they're a behemoth, are probably fewer than 250,000 individual shareholders spread across the ecosystem.

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When you compare that to the investing category, there are over 100 million people in the United States alone who have exposure to the capital markets. So I think we're still very early in the process, and we're discovering what works.

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One of the cool things about collaboration is that when one treasury company has success doing a certain thing, it shows a path of what the market wants. As an operator and as an issuer, you want to be responsive to where the investor demand and appetite is. When these prefs first started launching, we were very intrigued, but we didn't know how they were going to play out. I think they've played out unbelievably well. I think Saylor is looking like an absolute genius. Strive is looking like a genius. They're showing a path for other treasury companies to follow in their footsteps.

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I think this is really still just the beginning. If you hate BlackRock getting involved now, you're really going to hate it when the Federal Reserve starts buying Bitcoin. But it is what it is.

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I think there are a lot of benefits to the adoption of Bitcoin in the financial ecosystem. One is to increase the capacity of everybody to not sell their Bitcoin. The number one rule of holding Bitcoin is you don't sell your Bitcoin. In order to not sell your Bitcoin to buy a house, finance projects, and invest in the future, you need a financial institution that will give you a loan against your Bitcoin.

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With Bitcoin treasury companies all around the world, all the banks have developed different offerings for Bitcoin custody. Over time, this offers individuals more options to custody their Bitcoin, get financing against Bitcoin, recognize their assets as part of their overall portfolio, and get more advantages in the financial ecosystem.

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The issue maybe is that we are winning too hard. Effectively, yes, the U.S. government is for Bitcoin, and you have all the U.S. financial institutions rushing into Bitcoin. You have 200-plus companies that have adopted Bitcoin, and all of this is extremely important for Bitcoin adoption.

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Every time we have a meeting with a financial institution, a systemic bank, you get 10 or 20 people introduced to Bitcoin. Ultimately, one year later, they tell you, thank you, I bought Bitcoin after we met you. I think that's increasing the pace. We are so early. When we meet with systemic banks in Europe, we have to explain what Bitcoin is, what a Bitcoin treasury company is, what digital credit is, and so on.

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Then they realize and they say, oh, what, 11-plus percent performance with less than 2% volatility? That's less volatility than the S&P 500 with about the same performance. So you don't even need the S&P 500. Then they realize that their target for their fund is 12%, so they can just buy STRK and go on vacation, basically. Then they realize there is now a basket of potential digital credit instruments, and that means they can really provide a sustained result for their investors.

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Transforming the structure of the market is redefining risk and redefining performance. If, as a credit issuer, you don't generate more than 10% of performance, at least in the U.S., you don't have a use case as a credit instrument, basically. Then there are differences in terms of geographical specificities, because rates are so low in Japan, in Europe, in Switzerland, and so on.

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All that we are doing is working for Bitcoin and working to increase Bitcoin adoption. Participating in a Bitcoin treasury company not only has been the best-performing stocks since the launch of their respective strategies, but on top of that, you contribute to Bitcoin adoption in the world. That's what we are for. We work for Bitcoin.

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Can I just say one more thing on the institutional side? When you think about certain brands that have a very negative connotation with the old financial system, these institutions are really big. There's a lot of people that make them up. As these companies have seen the opportunity to make money in Bitcoin, the teams they're building to run those operations get infected by the Bitcoin virus. Now there are Bitcoiners inside these institutions.

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In some ways, Bitcoin is like a global conspiracy for freedom and capitalism. As we put more and more Bitcoiners inside a BlackRock, BlackRock doesn't change Bitcoin. Bitcoin changes BlackRock. The more institutions that we can build as part of our coalition, as part of our conspiracy for freedom, the faster we can accelerate the end state of what we want, which is hyperbitcoinization.

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Amen. Well said. That brings us to the specific ways we have collaborated even over the last couple of years. Just this last year, MSCI, one of the largest indexes in the world, was basically threatening to exclude Bitcoin treasury companies that had 50% or more of their balance sheet in Bitcoin or other digital assets. They asked for a public review period, and we pushed back.

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The companies on the stage were potentially impacted, along with six other Bitcoin for Corporations members. We thought it was important that we advocate, and we all came together with one voice. The other thing that happened was the community really showed up. This is what I love about Bitcoin. The community is very passionate, and they don't particularly like it when their own get messed with or pushed around. We were able to make some noise. We gathered 1,500 signatures in our coalition letter, and the end result was that we won that battle for now, for all intents and purposes.

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What can we anticipate? I know there is TOPIX, which is a new one. Dylan, I want to hear you speak about this. That is the index in Japan that is basically threatening something similar. Can you share a little bit about what's going on there and what people need to know?

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Sure. TOPIX is basically the Russell equivalent in Japan. There are about 1,000 companies in the TOPIX. They published vague guidance to not allow new entrants to have a balance sheet composed primarily of an asset, meaning digital asset treasury companies. It was a bit vague, but we're engaging with them in a very constructive and charitable way, both publicly in an open letter and privately.

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Bitcoin for Corporations is doing great work to help organize and mobilize the community and make their voice heard. The public comment period is open until May 7. We would really encourage anybody to visit the Bitcoin for Corporations website, take a look, and sign the letter. It would be a big help for us.

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Do you think they observed what happened with MSCI and are looking for ways to respond? What's the motivation or incentive for an MSCI or TOPIX to come out like this?

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They don't respect Bitcoin. They don't respect Metaplanet. They feel like Metaplanet is stealing their liquidity, stealing their market cap weighting, and they want Metaplanet kicked out of the club. That's what's happening.

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To put it more diplomatically, we're not in the index. We're not being removed. It would be a potential addition that is delayed or doesn't happen. But it's a new concept. There is a lot of volatility in Bitcoin. This is a new asset in the public markets in Japan.

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It's similar to 2022 with MSTR. There was a lot of noise. On the other side of it, everything emerged clear. It was clear from the domestic political scene and the financial and regulatory scene that this is something we want to embrace, encourage, and foster in our market. I think Japan is leaning the same way. All of the regulatory guidance and the roadmap there are all in one direction. It's pro-Bitcoin and pro-digital assets. So we're optimistic, and we'll see what happens after the comment period.

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I won't speak for Metaplanet, but there is definitely a club. It's called a club for a reason. There is an industry. They do many deals together. Some of that industry likes Bitcoin. Some of that industry has total disdain for Bitcoin. We're the barbarians at the gate. For the people who have a problem with that, they're right. We are the barbarians at the gate, and we are coming for them.

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Maybe they're justified in not liking us, but I think that's all the more reason why it matters that we as quickly as possible build a large coalition of institutional investors, retail investors, and pension funds that are invested. The people who want to set the rules of the system and favor certain things and not favor other things, the only thing that protects us from them are all of you, the masses, and the political capital and financial capital that we build. If they could crush us, they would. We need allies and we need a coalition in order to keep our businesses from being discriminated against, just like the banks discriminated against Bitcoin users for over a decade.

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Definitely. If you get a chance to check it out, it's TOPIX, Bitcoin for Corporations, and it will take you 30 seconds to sign the letter. For MSCI, we got 1,500 signatures, but we had a lot more time. This time we have about 10 more days, so there is a level of urgency.

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Alexandre, I want to go to you as we begin to wrap up here. You're watching on from Europe. Is there concern that something like MSCI going through or something like TOPIX going through could set a precedent? Are they basically looking to create a rubric? Europe obviously has its fair share of regulatory challenges. What are you observing?

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I'm more concerned about the index providers than for Bitcoin treasury companies. I think the indices that remove or make it more difficult to include Bitcoin treasury companies will die out and have no liquidity over time. They will be completely irrelevant. That's my concern for them, actually. We are working for their survival, frankly, for them to be able to maintain Bitcoin exposure in their indices.

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The banks that don't adopt Bitcoin are already irrelevant. The banks that don't favor the adoption of Bitcoin itself are irrelevant. Those indices just need Bitcoin as everybody else does. I think everything is good for Bitcoin. Whatever the outcome, Japanese investors like Metaplanet and they will find ways to get exposure. It's like when China bans Bitcoin mining. Who cares? Everybody wants Bitcoin and everybody will find ways, and 20% of mining is still in China. So I'm not concerned at all.

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Over in Europe, I think this reminds us from the last discussion that this is a fight that continues and needs work. It's proof of work, and it requires people to take action, engage with the political ecosystem, and engage with the institutional ecosystem. It's a responsibility of everybody. I think that's working for Bitcoin.

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Over in Europe, you've had two Bitcoin treasury company projects that have been shut down by the Swiss regulators and the Netherlands regulators. This reminds you that you have to actually work for it every day. Every company on earth that adopts Bitcoin should be supported. That's really the endgame, for Bitcoin to be adopted at scale, and we will work every day for that.

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We're out of time, but I just want to piggyback on that for a second. At UTXO, we funded and underwrote roughly 20 Bitcoin treasury companies around the world. When you're on the investor side, it is very easy to deploy capital, and it looks easy to run a Bitcoin treasury company. Now that I'm running a Bitcoin treasury company, I've gotten my ass thoroughly kicked in the capital markets.

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It's hard to run a public company. It's easy to have conviction about putting Bitcoin on your balance sheet when your stock is soaring. It's hard to have conviction about what you're doing when the price is going down. I just want to give a shout out to Alexandre, Dylan, and all the people who are pushing the frontier of Bitcoin treasury companies, Bitcoin, and the capital markets, and demonstrating conviction.

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In my time in Bitcoin, where real conviction comes from is not from the 10x gains you made when the Bitcoin price went down. It's actually seeing Bitcoin recover after every single bear market. That's what gives you conviction to hold through the hard times. Your leadership is doing that for other issuers and operators. I don't think there is going to be a ton of new Bitcoin treasury companies until the Bitcoin price starts going back up, but then we're going to go from 200 to 2,000. It's going to be because of people like you. So thank you.

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Thanks, David. Love to see it. Can we give it up for our panel here? Thank you guys so much. You've been a great crowd. Thank you. I hope you all enjoy the rest of the conference.