Why have digital treasury plays gleaned so much attention.

0:00 Hello, welcome everybody. Thanks for joining us at another episode of Arthur's Round Table. Today's a special day for me because I have my long time dear friend and digital asset OG and call him that David Damdar. We've sat many times at the Soho House discussing digital assets and life in general. So I super appreciate him dialing in from Puerto Rico today and that's going to be a fascinating discussion. He's managed to get into a position, he managed to get into many positions that are at the forefront of digital assets, but this is super interesting and I think you'll find it as well. So David, thanks. Thanks for doing this of. Course art, they're great to see you.

0:40 So let's start at the beginning. Get some contacts with your background because I think it's relevant. Sure. So I guess I was coming at this from the, I came from the traditional hedge fund and finance world. I started off at UBS out in Hong Kong and then I worked at Millennium back in New York. And that's when Arthur and I first met. And from early on, I was always somebody trying to look for differentiated opportunities and try to see things from different perspectives. And I found out about Bitcoin and cryptocurrency quite early. And I think the first article I ever saw was something I shared with an investment club that I was a part of. And it was in 2011 and it was the title was the world's fastest growing currency. Isn't the currency at all. Bitcoin grew from, you know, $1.00 to $30 and crashed back down to $3.

1:25 And this was in 2011. And so at the time, the first thing I said was, you know, I wouldn't suggest anyone invest in it, but maybe try to find a way to get some free ones. So that's the first thing I ever said about Bitcoin. It's a good boy. Then I went to some of the earliest Bitcoin in crypto meet ups in New York in 2012 and 13 and started to get involved in the space while I was at Millennium. And then I left to set up my first company in the space called Solid X in 2014, which was a investment bank entirely focused on digital assets. We tried to do a Bitcoin ETF. I was second in the world after the Winklevoss twins who founded Gemini and just took that public this year, one of the largest crypto exchange in New York. We tried to do a create derivatives using total return swamps, which was something I was familiar with and traded while I was at Millennium and UBS.

2:08 And we put out one of the first research reports ever on Bitcoin and digital assets as an institutional asset class in 2014. So it was a bit too early, you know, had a lot of the right ideas. Then a couple years later I got connected to Mike Novogratz, who was ex Fortress and Goldman, went into his family office to manage all of his digital assets and planted seeds to launch a hedge fund and a business together and then to take that company public in Canada that became known as Galaxy Digital. It's now a $10 billion diversified crypto asset manager financial services firm today, and they're doing a lot of great things. And then since then, I had a crypto hedge fund here in Puerto Rico called Coral Capital, taking some other companies public.

2:48 And then most recently, I've been investing, advising a ton of things and I have been investing a lot in this latest wave of digital asset treasuries I wish I'll get into. And I'm currently the CEO of CEA Industries, which is running AB and B Digital Asset Treasury Company. So I'm going to say this so you don't have to, even if you want to, even if you don't want to, is that Novogratz? You put Novogratz on the map, and I happen to know that because I was there. So I'll just as a matter of record say that. And I'm sure he's on some level appreciative of that, maybe not as appreciative as he otherwise would have been. So anyway. Well, I appreciate you. Yeah, I appreciate you. So super exciting. What what what happened during the You introduced me to the guy that did Polly.

3:35 What was the name of the Polly? Polly Market. Shane Copeland. No, no, the other guy, the the guy that was back to the benchmark. Polly Math. Trevor Quverko. No, there was. Polly Polly Chain, Olaf Carlson, WI. That's right. That's right. So it's one. Of the largest crypto VCs and considered one of the best. Yeah, he did one of the first FOI gigs because of you and in Benchmark's office in in New York City, and he was at the forefront. I mean, he was definitely, you know, out there in front of everybody else and it's proved to be profitable for him and everybody else. It was in the fund. That's. Right, Yeah, Polythene, I think at the time they had 20 to 40 million AUM and they were really just trying to launch and get going. I believe Naval Ravikant or one of or had might have been involved back then or or it was involved with another fund Meta stable.

4:26 But they're really two of the earliest pure crypto funds based out of Silicon Valley. And Olaf actually is an investor in my, my current company and he's been a friend for a long time, but he, he managed to build really and has had an incredible run of success with Poly Chain and now it's at I believe between 2 and 4 billion in AUM today. Yeah, wild. Yeah, Super smart guys. Super. I appreciate that. All right, so let's get into this treasury thing and let let me just say something here for the benefit of those that may not have dug deep in this. It's easy to kind of make sense of what some people are doing to put Bitcoin on their balance sheet, right? Even though you could buy Bitcoin directly, what is it that makes that's causing it to make sense to buy a company that owns something that you could buy directly, but you're better off not buying it directly?

5:18 In your case, I know it's not available, but that's a different story. So in general, the treasury companies are buying things that you could otherwise buy without them in some cases. Is that fair to say? Sure. And I think that's a good like starting point to frame it. So just step back a SEC. I'm sure many people are familiar with. But for those who aren't, like I credit a lot of this to five years ago. Michael Saylor had kicked off this wave of Bitcoin treasuries and now digital asset treasuries by taking the cash that was sitting on his balance sheet at Micro Strategy, which was kind of a failing or struggling software company that he'd been running since, you know, early 2000s. Taking the 400 million they had in cash, realizing, you know, it's not productive. It's not, you know, and it's actually getting inflated away.

6:00 So he fought with his board, fought with all the regulators in order to convert that into Bitcoin. The market responded well, stock traded up. And then he kicked off this kind of flywheel where he continued to sell more equity and buy more Bitcoin and sell more equity and buy more Bitcoin. So now over the last five years, he's managed to accumulate 60 to 70 billion of Bitcoin. And he had a premium that persisted for the last five years a lot longer than anyone expected right now actually for I think only the second or third time in its history, the premiums contracted. So now the value of the market cap of MicroStrategy is just around the total value of its Bitcoin holdings today. So following that, that's kicked off a lot of other people and he's helped through his Bitcoin for corporates conference and just through a lot of other people that carry the Bitcoin flag and share all the merits about Bitcoin as digital gold. There's over 100 different companies, maybe 2 or 300 at this point that are considered Bitcoin treasuries or have Bitcoin on their balance sheet as public companies. There's in following the footsteps, people realize, well, Bitcoin has very special characteristics, but a number of these other digital assets also do Perium, Solana, B&B, Hyperledger, you know, people have gone down the list of realizing, well, what if we were to have a company who part of its core strategy is to accumulate a lot of this interesting and important digital asset. Now to your point that you'd brought up the difference of owning it, buying it yourself, or buying it in an ETF versus in a treasury company, The way I think about it is in an ETF or direct holdings, it's kind of passive holdings of it. Whereas investing into a treasury company, it's designed and the purpose of it is to

7:33 accumulate more over time. If you have, if you invest in ETF and the asset price goes up and down, Bitcoin goes from 100K to 300K, you're expected to have the same amount of underlying Bitcoin during that period. If you're invested in a treasury company who succeeds at its kind of stated goal is to increase the Bitcoin per share, you might end up not with one Bitcoin per share, but you might end up with 1.2 or 1.5 or two times the amount of Bitcoin that you started with when you invested. Yeah. So part of the strategy is accumulating more, whereas with the ETF you only can get more is if you buy more of the ETF, get it. Yeah. Back to Michael for a second. Had he aside from getting distracted from the main business, that might have attributed to some of the value of the shares going down. Had he not done that, then the value of the company would be 0. I believe so.

8:23 I mean, I think some, somebody pointed out to me, I, I don't think the software business is generating money. It might still be burning money. You know, in the absence of, you know, going down this path to accumulate Bitcoin, he might be sitting on a company, you know, if it had 400 million cash and 1 billion market cap, then he might be sitting on 100 million cash and, you know, 2300 million market cap today instead of 70 billion. Yeah, wild. It's pretty wild stuff. So we can talk about whatever you want to talk about. But maybe now how did this all come about where you're in the driver's seat, arguably in this public company that owns the Binance tokens, right? That's essentially what's happening, right? Sure. So as I said earlier, when I was investing into a lot of these other digital asset treasuries, and I've traded MicroStrategy, I've been, you know, had short periods where I'd been investing in it.

9:13 And and then I'd looked into it and had friends who've been introducing a lot of the others like Metaplanet in Japan and some of the other more recently in in the US markets as well, Nakamoto Pro Cap with a lot of them focusing on Bitcoin. Then through the process of investing in them and sharing that with some friends, some of the management and the bankers were telling me, OK, hold on, you're better at this. You understand crypto and capital markets better than the management teams and the bankers you need to run one of these treasury companies. And so through that process, they told me, all right, they support me running a Bitcoin treasury or anything I wanted in any market in the world. And I thought about that in different markets. And I just thought, as much as I continue to love and carry the Bitcoin flag, I didn't feel like I could tell that story as genuinely and honestly as Michael Saylor or as David Bailey and Nakamoto, people that have been carrying only the Bitcoin flag for as long as they've been in the space.

10:04 For me, you know, I've been an investor. I've been, you know, hedge fund manager. I've done a lot of different things in the space. And so as I started to think about the different opportunities, the one that really rose up to me as being the most interesting was B&B, which initially started off just to give a quick intro there as Binance token. And then it evolved into Binance Smart Chain and now into BNB chain. And that's what it is existed As for the last five years. Part of the reason for that is that it was introduced by Binance or the team behind Binance, which is by far the largest crypto exchange in the market. Just out of perspective, Binance has about 40% market share. And if it were a public company, it might be valued anywhere from 5 to 15 times larger than Coinbase. Coinbase is $100 billion company today. So I'll just give you a percent of how big finance is. They have over 300 million users I believe so far really is it's a well known story, but mostly outside the US, So they hadn't been operating in the US market and a lot of that's just getting cleared up with some of the kind of regulatory clarity and more, you know, open and sensible regulations going forward. So there's a lot of positive potential catalysts there. It was why when I looked at B&B as the token kind of introduced by finance, but now it's evolved into so much more across this whole like thriving Web 3 ecosystem, I thought that this was really an opportunity to focus on an asset that was overlooked, undervalued and kind of really just not well known, particularly in the Western markets. And we don't necessarily need to disclose all this, but to the extent that you feel like it did

11:34 in thinking about it and coming to that conclusion, did they come to you? You went to them, it was sort of symbiotic. How did that all happen? Because he's a notorious figure, right? He's, you know, it's not like he's not known or, you know, it's, it's if you're at all dialed in, you, you know how big it is. It's huge, right? Sure. And so and then he you're talking about there is CZ who's the founder of finance and and BNB. And so he is quite well known and also he's been in the press a lot recently. He was just recently pardoned and that was for, you know, some issues that he'd had in the prior couple of years was a very again, I've, I've known him socially from very early on in the space. And so I've been very happy.

12:17 You know, I think there's a lot of just validation and now really allows him to be a lot more engaged and kind of really to be back to being a significant driving force in the space. During the capital raises, we did a a $500 million pipe transaction and going public or in merging the pipe into this listed company, C Industries. During that process, I was telling people into this narrative that CZ as a kind of partner and investor into the deal and as a friend, he's probably the second most important person in the crypto space, the most important person not named Satoshi. And so Satoshi, we still don't know who it is and or where they are. And so CZ and is arguably the most important figure known in the crypto space today. So I think part of what I've been doing is actually just helping share the story of just what he's, what has been built so far with finance and B&B and just how important it is to really the whole crypto space.

13:09 And not that it matters, but the three people I know that have been pardoned all or subject to things that they would otherwise not have been targeted for, not have been determined to be criminals. It was just a targeted situation. It just happens that I don't know that many people, right, that have been pardoned. The three that were allegedly criminals weren't really, and then they got pardoned, right? So I think it speaks to this a little bit anyway. Sure. Well, listen, I'm, I'm somebody on that like even, you know, early on as I first started down this path, I was being very careful about a lot of TV opportunities and everything because people have a lot of bias and negative slant that they wanted to really focus on a lot of those things and.

13:52 So newsworthy stuff, right? Yeah. Right. And, and a lot of journalists. And so it's, it's definitely made my job a lot easier now as I can focus on a lot more on the merit and substance of everything. And just it's, it's been very validating because a lot of the positive catalysts I've been talking about. So even around that, like I stay very apolitical, but I'm very happy that it's, you know, like I said, moving more towards sensitive and, you know, an open framework towards regulation which will invite innovation, particularly in the USI think there's been a number of times where over regulation or politicized regulation in the US has kind of driven out a lot of innovators and technologists. And so I'm definitely optimistic about the direction we're headed in now. And a lot of other catalysts like B&B being introduced to the US market.

14:37 It was I think the day before he was pardoned, Coinbase and Robin Hood both added B&B as a token where people, investors can get exposure to it as well. And so I do think as the US market wakes up to it, a lot more users and holders of B&B will significantly Dr. value to it. So I may have misspoke. So the B&B token, which is what is the mechanism is the asset that you're buying in the public company, is that fair to say? So it is otherwise available to somebody in Coinbase. So what's the edge in the Treasury company? Well, so that goes back to this idea of this kind of passive holding verse more active accumulation, right, that investing in teams when I think as an investor into treasury companies, right, I'm thinking and betting on the teams that have been in the space a long time that I think are going to be able to accumulate more of that asset. So it's really more a kind of enhanced exposure. That's where it starts to get very special if like they're able to accumulate more and actually be a driving force and helping drive value to that ecosystem and the underlying asset.

15:42 The other thing that's kind of a very unique circumstance that I've just really started to share in the past last week or two is that, you know, we've been through periods. I've been in the crypto market a long time. As you brought up, you know, there have been periods of euphoria and periods of panic early on. Like we've went through that with a lot of people rushing into these digital asset treasuries. Now as the crypto market pulled back and Bitcoin from 125 down to 100K or 9K today, and as we're seeing a lot more kind of panic or worry about where the market's heading, What's unique is that it's actually one of the first times ever that crypto assets are on sale. So I'm sure I think we've talked about this before and everybody get whenever anyone enters the crypto space, the first thing they usually try to do, especially if they came from finances, they're like, oh, I want to broker this OTC deal or I have this person that wants to buy Bitcoin, but they want to buy it at 5% off or 1% off.

16:29 And I would tell people 99.999% of times those are. Fake, don't waste time. On it, I want to save your time, my time and you know, there's no such thing as a discount in crypto. If you want to buy crypto, go on an exchange, go to an OTC desk and and buy it right now. You can buy it through some ETS. But guess what, with digital asset treasuries, a lot of them are trading at twenty 3040% discounts to the underlying assets. They have their net asset value. So it's the first time ever if you believe in crypto and you believe, you know, as I do and believe in kind of where things are heading over the next, you know, one to three years until the next cycle. I think this might end up being one of the best entry points ever into the crypto space. That discount has been precipitated by the the decrease in Bitcoin and other digital assets at this juncture, not for any other reason, like 20 percents of deep discount, right?

17:20 Sure. Now the only other time this existed was really when Grayscale through their GBTC had there was a Bitcoin kind of closed end fund. They were charging large fees on it and because it was a closed end fund, the investors started to worry that the discount would never close. Well, the difference here is that the management teams have the ability to close the discount anytime they're able to buy back shares. When they're at a discount, they're able to sell the assets and they can kind of like. The share buy me same thing. Right, exactly. So this is where it's an interesting thing. Another way that I or another interesting phrase, you know, a way to consider what these digital asset treasuries are is they can act a little bit like on chain mutual funds or you know, operating in businesses that use their operating cash flows and leverage to accumulate more of that the underlying asset.

18:13 So over time, they become a little bit like Berkshire, where Warren Buffett, when his stocks or when his kind of equity is trading at a premium to what he believes the underlying value of his businesses are, he issues more equity when they're trading at a discount to what he believes the value. Is he buys back stock? And so that's really what a lot of these treasury companies are able to do in order to really increase the BNB or the BTC per share or increase the net asset value for the investors. So without getting into the reasons why Bitcoin is where it's at and digital assets, this is probably not a fair question. But. I can take it. Yeah, I know you can. Coin does. Does the cryptocurrency market track Bitcoin and Ethereum in terms of its correlation?

18:59 I mean the ones that you would want to own, not the ones that you wouldn't want to own well. I think this is where people in general focus on the wrong things and are a little bit, you know, having again, come from the headphone world, followed, you know, and been through many crypto cycles. Whenever it's almost a universal truth, whenever the market's ripping out, when Bitcoin's at new highs is when I get the most phone calls and everybody who wants to invest and jump into the crypto. Market, right, Yeah. When the markets pull back ten 2030%, they they're panicking. People think it's all over and they regret ever getting involved in crypto and because they bought at the highs and they're panicking out at the lows, right. So I've been having been through this, I constantly just try to give people this like little bit of counter intuitive or like counter momentum advice of being like, all right, don't get too excited at the highs and you know, be a little more cautious and be a little more optimistic. Just think, zoom out and realize, well, you've been wanting to get the exposure.

19:55 Now that it's back here, maybe it's a better entry point or a point to start dipping in, right? Another interesting thing is outside of Bitcoin. So even when Bitcoin was at all time highs. It was a metric, excuse me, that I saw that was like the total 3 or it was all the large cap crypto assets outside of Bitcoin and it was just breaking to new highs right before the pullback. So even now, you know people and there's a lot of information out there on X Twitter and different like crypto information sites where people are putting out and focusing on all these other opportunities. You know, people look at the Bitcoin dominance. So at any point in time, the total market cap of Bitcoin compared to the total market cap of all crypto assets. And so historically, I think it's been between 30 and 60%. So whenever that starts to decline, people kind of refer to it as an alt season or a time when, you know, as Bitcoin starts to decline in total dominance, you see a lot of the other altcoins start to outperform. So it that's really interesting.

20:55 The correlation is opposite. It's kind of, you know, the thing that's frustrated many people, including me, although I've got somebody in my corner that helps a little bit a lot, is that it's, it's not so easy. There's, you know, investing in digital assets is, is gotten easier, but it's still complex. Like you have to to there's lots of movement parts, right? It's not so straightforward. And I would argue the reason why I bring that up is that if you're buying shares in a public company that's got all that not so easy stuff solved, including the idea of what to do with it and when to buy and how to accumulate more than it's kind of like if you're a real estate investor in New York City and you want to express something in Atlanta, you just can't go to Atlanta.

21:42 You're going to hire people that know Atlanta, right? So maybe you'll hire a fund that knows the Atlanta. So it's kind of like you're, you're buying talent, right? Yeah, it's a bit like that. And what I, what I love about the crypto space is whatever background people come from, whether they're a hedge fund investor, VC investor, technologist, lawyer, whatever it is when they get into crypto or as you start to do it. I've seen a lot of people who's like lives and careers and you know, passions has been revitalized because everybody has to do more. You have to become more. You have to learn about the hedge fund manager has to learn about technology and regulations. The VC has to learn about markets and regulations and technology. And again, the technologist has to learn about all these things that they never cared about and then add in community and add in marketing and all these these other pieces to it.

22:27 Another interesting framework look like when a lot of REITs were introduced, it gave ways for investors to get exposure to a number of different different types of real estate or different types of other assets in a group or diversified way and get exposure in very narrow or very wide things in different areas around the world. In some ways, when I think about what these digital asset treasuries are providing, they're providing exposure to get investment exposure into these entire new digital asset ecosystem. So just for example, like I mentioned, finance itself has over 300 million users today. B&B, it's estimated that somewhere between 8090% of those users hold B&B and use B&B as a as a way to get reduced trading fees on finance exchange.

23:11 Similarly, the total universe of holders of B&B is likely over 300 million today. So that's an economy of 300 million people that exists all over the world. That's one of the largest economies in the world. A lot of the activities of those people are only using as of now B&B for a small amount of their activities. So an interesting kind of bet to think about these 300 million people, my bet is that if right now, today, 1%, five percent, 10% of all of their activities are done through B&B or through BTC. Over time, the percentage of activities they're going to do is they're going to be utilizing BNB and BTC for a higher percent than today. So that's an interesting way to frame it. Yeah, By the way, I did look at all the things that finance is involved in and it's outrageous. I mean they they're touching every part of the digital ecosystem.

24:01 It's out of control. I mean, it probably in control, but out of control in terms of how broad based it is. It's like super crazy. Well, that so actually since you picked up on that, one of the ways that I came up with this kind of narrative and trying to explain to people too that Bitcoin a lot of people have gotten comfortable with this idea that it's this digital gold, right? Importantly, as as gold has skyrocketed this year, I look at it, you know, gold went to, you know, 10 to 20 trillion market cap and bitcoins at 2 trillion today. I look at it that the next ceiling for Bitcoin has only gone up and I still do expect and expect that Bitcoin will surpass the market cap of gold. So as of right now, that's, you know, 10 times from here. Now, all of these other digital assets, Ethereum's at 500 billion, BM BS at 130 billion, 120 billion today. So when I think about the kind of where these could be headed, I see these also as multi trillion dollar assets. Ethereum has kind of won out as this digital oil narrative. It's not a digital gold, it's not a store of value. It's a little bit more like a commodity that you burn, right? And it's one on the stable coin theme that a lot of people have gotten excited about so far.

25:11 BMB is a little bit more of this kind of digital infrastructure and or digital GDP. It touches every area of the crypto space. So in some ways it is your like ETF or your, you know, BMB itself gives you this exposure to everything in crypto. Yeah. So let's, let's, it's super impressive because I, I know how much money you've raised and your relationships are important and that's how you did it. But coming into this and deciding to do it, thinking about it, deciding to do it. And in a in a very short period of time, there's four or $500 million you raised to go into this treasury company. I mean, that's even in today's terms, that's a lot of money, right. So what were the aside from the relationship capital you have that allowed you to talk to people that had the money that could express it with you, What is it that put them over the edge?

26:03 And sure, maybe you can discuss some of the pushback that because that's often helpful, right? Sure. So I think, you know, we did this deal through July and it was completed I believe August 5th. And so really the last couple months. So you know, at the time of the deal, really like there were a number of Bitcoin treasuries that people were focused on and they're seeing the success of those there. There had been really two or three Ethereum focused treasuries that stood out and now over the last couple months they managed to raise 15 to $20 billion to invest into Etherium. Lana as being the 4th or 5th largest crypto asset has also managed to attract, I believe it's about 6 to $8 billion so far.

26:44 And like I said, this was the one that was the most overlooked and I believe undervalued. And so from there, it was really just about sharing a lot of these metrics and sharing the opportunity I saw. And I fully expect that there are going to be a couple of other B&B focused treasuries and hopefully raise a couple billion more that see the same opportunity. You know, there's definitely been particularly outside the US and in Hong Kong and Japan. I know there's a lot of momentum in Korea as well, where people are actively trying to do a similar strategy and they're much more familiar with B&B out there. The the crypto communities because they use, they use the exchange. Do you think that I think all boats rise and it might be true with digital assets as well, but do you think that Coinbase being so prominent in the US might want to keep finance out of the US?

27:39 Not to say that they could, but would that give them a little agita? Absolutely. I mean, this is where now I like to say I came up with this phrase that crypto is the most non 0 sum game the world's ever seen. And So what I love about it is most people, they come to the crypto market and like I said, they get revitalized. They find different things to be passionate about and they're constantly learning and they're looking at creating new systems and new ways to capture value and realize what value and financial value transfer even is or could be. Right. And for there's some areas within crypto which are a little bit more competitive, like between exchanges where they're competing for, you know, between themselves. And so definitely there's certain markets where they step on each other's footsteps. And, and I heard Coinbase is recently trying to expand into the Middle East.

28:24 And so, you know, I think there's been some lobbying and other stuff by some US exchanges to keep some of the foreign exchanges out. A couple months ago, there was also some regulation, I think introduced by CFTC of potentially allowing US customers to access offshore crypto exchanges. So whether or not, you know, right now, US users are not allowed to use many of the offshore crypto exchanges. So whether they come here or not, if the regulations improve, the US users will be able to access that. So now at the same time, there's always some collaboration. And I believe, you know, Coinbase, like I said, had recently added BNB as a token. So it's very hard when you're one of the 3rd or 4th largest crypto assets. It's hard for Coinbase to justify. Not putting it on the exchange yet. Yeah, because your customers are going to demand it. It's that simple, right?

29:11 So let's get into the weeds a little bit right now. Before the pipe, the IT was it was a public company that you merged into together. I'm going to get this partially wrong, but essentially the opportunity to get into the company before it went public is over. And so now the good news is that you can buy into the public company just like any other shareholder in any other company. Right. And so for a little bit of context on the company, it's ACA industry. So it had been focused on agricultural equipment and then had recently completed an acquisition of a chain of vape stores in Canada called Fat Panda. And so through that process the there, the ticker had been VAPE when we first did the transaction and then we soon after, I believe a week later, we changed the ticker to BNC. And so this way BNC, it's a little bit closer to BNB and it kind of fits with the potential name of the treasury business as BNB Network Company and BNC was also the original ticker of BNB as finance token, so.

30:18 There we go. I didn't know that. History of it during the transaction, you know, we did a $500 million PIPE, which actually could scale to 1.25 billion because there's 750 million of warrants at a 50% premium to where the PIPE was done. And then now we've been, you know, it's a couple months past that. And as we've been executing on the, the BMB treasury strategy we've announced a couple weeks ago, we've accumulated now over 500,000 BMB tokens. It's valued over 460, four, 170 million today executing on that. It also exists, you know, because of the conditions in the market that investors can see based on where the market cap of the company is today that like many of the other digital asset treasuries are also trading at a discount.

30:59 They're on sale. They're on sale, yeah. So actually it's serendipity, right? As a result, now you can buy the public shares at a discount to its underlying asset value, right? So, so yeah, So what I'd say I always have to be careful about how I share about this. But I guess the way I think about it is like, look, as somebody who's been investing into crypto for a long time, as someone who's been investing into digital asset treasuries, what I can tell you is I would expect, right, this is for me personally, this is the best opportunity I've seen to invest and get crypto exposure, right. And it's the first time I've ever seen where really people have a multiple different ways to get exposure to crypto assets at this significant discount to the crypto assets that they hold. Now the key nuance is whether the people believe that the management team will to take all the steps necessary to really focus on driving and increasing the shareholder value in the medium and long term.

31:52 That some people, there's a lot of bankers out there, the bankers and lawyers have made a lot of money this year and there's a lot of them that are still out there pitching kind of very predatory deals that aren't very really value accretive or long term value accretive to the shareholders. So it's important to resist and also important to avoid taking on very onerous debt or anything like that, because some people, in order to grow their balance sheets, are taking on a lot of debt and convertible debt to accumulate more of the underlying asset. Now that works when everything's growing and going in. One Direction. But a lot of times the, the investors into the convertible debt, they don't actually care what the underlying asset is, whether it's Bitcoin, Ethereum, anything. They just care that they have a claim on it and they usually short sell the stock. So it, it creates this adverse incentives having, you know, I've been very adamant about, you know, and with other treasury companies and ones I invest in, of trying to find people that are, you know, creating the same footing for all investors where everybody's motivated to see the value of the assets and the value of the equity go up overtime. Is it important to understand or that the public company that was in bought the vape stores?

32:55 Is that still an ongoing business or it doesn't matter? Well, I mean, so it's still operating. I was joking. And you've met my mother. She was actually quite happy. She's recently got addicted to vaping somehow in the last couple. Years, she was very happy we could see that she. Was happy when she saw the ticker vape and thought I did it and you know in her honor it. Was. Really sad when I changed the ticker. No. So it's an interesting scenario and it's actually it's operating pretty well and it's a growing business. You we made sure because actually there was some limitations because the business in the past had touched cannabis. So we made sure that there's no part of the business that touches cannabis because that limits some of the brokerages from allowing people we can access it or invest in it.

33:37 So we've just tried clearing up some of those little nuances. But yeah, but as of now, it just touches tobacco and has nothing to do with cannabis or anything like that. But the business is growing decently and, you know, it's cash flow positives. It's something that over time I would expect as an investor into treasury companies, people that are running these strategies are more focused on kind of companies more related to the crypto business and to get out of those legacy businesses. But as long as they're not a. Drag for. Hurting it, you know, it's, I think there's value in them. So right now somebody can just go on to their brokerage account, go into Robin Hood, go in wherever they buy their shares and just buy BNC.

34:18 That's right. And. And then you know, there's, there's a number of the information out there really is imperfect around a lot of these treasury companies. There's a company you probably know or met the guys at Blockworks. Blockworks puts out a treasury dashboard. You know, some of their metrics are off in the exact figures that they put out, but it's a pretty good starting point is that shows the holdings of different digital asset treasuries. And there's a couple of other kind of dashboards like that that people have put out. Yeah, I just looked at the one that one, yeah. Is that a better place to look even though it's not perfect then for example, the reporting that Robin Hood might do and I'm not asking you to opine on the the the efficacy of either one.

35:02 I'm just saying if would you as somebody that's listening to this and wanted to buy it, do you you want to look at both places for example? Well, Robin Hood, I actually haven't seen what they've put out specifically. Actually, Vlad was just here the CEO for a dinner last weekend here in Puerto Rico and Dorado. And I think, I mean, it's been amazing everything they're doing now. One thing I just applied, like I also always try to urge a lot of caution to people and anything like as you brought up, right, try to protect people because I don't want anyone making one investment into the crypto space and getting hurt. Or you know, I came up with actually this term a couple years ago too, that, you know, it's kind of what I called the Robin Hoodization of the financial markets where unfortunately for a lot of the younger generation of Robin Hood helped dumb down investing and turning investing into trading and gambling and through zero day options.

35:52 And so that's why I really try to like focus on giving people information and education and seeing the broader opportunity and then finding the right entry points into that. Yeah, yeah. Got to be careful winging it doesn't work for sure. Yeah. So what else can you talk about as it relates to the elements that may have caused the a little bit of a depression in the share price and is it largely the crypto market, digital asset market that dragged it down? Is there other elements that you can share? Sure. I think some of this, like one of the other narratives I've been kind of trying to share a little bit is I think it's a bit of a what's created the opportunity today is that it's a bit of a timing mismatch of capital. So during a lot of these PIPE transactions that you know, the digitalized treasuries have done over the past year, a lot of them hedge funds and traditional finance institutions that invested were in it for like 1 to 30 day trades, right? They want to just be in it.

36:49 If they made 1%, ten percent, 25%, they were happy and move on to the next trade. A lot of the crypto investors, VCs, family offices, they were in it for kind of one to six months or 1 to 12 month time frames. And they were hoping that the digital asset treasury wave and the euphoria would continue and they make 50 to 2 or 300% / 1 to six months and then cycle the capital to the next one. There are very investors. I know there are some investors, VCs that set up digital asset treasury, focused funds, specific vehicles for it. And the goal was they put the capital in, they told their investors it was a six to eight-month trade and to get all the capital back, right? So they're kind of bound by that, the strategy going into it. So now it's been three to five months since a lot of these digital treasuries, you know, digital asset treasury pipes were done.

37:34 And so now it's this timing mismatch where a lot of that capital just wants to come out. And when one or two of them didn't do so well, right, they started panicking or just trying to get out of them at any cost. You know, to me, it's a, I'm still personally a bit shocked that anybody would sell the equity of these things at a discount to what the assets are because people, particularly the crypto investors, know and understand and realize the value of these assets better than most of the other investors. So a lot of what, you know, I'm focused on now is really sharing this story and sharing just the opportunity broadly that I think exists across digital asset treasuries trading at 20 to 50% discounts to their Navs and sharing it with new institutional investors and new and retail investors. And so to me, it's a, again, it's a pretty genuine thing to be able to be out there and say you believe in the B&B story as I do, and you believe that the value of these assets and it's important asset in the crypto space that should increase in value over time.

38:32 Well, to be getting in an even better entry point than with an asset value, you know, seems like a pretty unique opportunity in the crypto space. So it does and I agree with that. Is there I don't know what the regulatory issues around this or just bail if they're you can't talk about it or can a pint on it. Is there a secondary market from the Corp? Like if somebody wanted to take $10 million of their $100 million investment into the company because they needed to pay back their, in your example, the venture LP's, is there a marketplace for that? So it's not quite, I wouldn't think of that as a secondary market. I think there have been a couple of investors that have expressed, I think there have been some blocked trades that are done. So Cantor was our lead banker on the pipe and they've been very active.

39:17 And actually, I was just at a Cantor Crypto and AI conference in Miami this week I was speaking at and it was actually one of the surprisingly best crypto events and best conferences of the year because Cantor's really cemented themselves. They've leveled up as a bank and they've cemented themselves as being one of the best. You know, banks really focused heavily and kind of welcoming a lot of crypto entrepreneurs and investors and just very high quality across the board. So Cantor, a lot of investors are going through them and there there is some opportunity occasionally for them to cross out blocks and everything. Yeah, good. That's good to know. I think a lot of people in the audience would, would, would like that opportunity given the opportunity and their interest level in this, even though you can buy the shares at a pretty good discount right now, right? Yeah.

40:02 So actually with something I, I'm still trying to get some data on, but it's interesting and you know, publicly available is even in the most recent with 13 F filings, just the one thing that stood out was a Vanguard. Actually, it looks like it took a, you know, maybe almost 2 1/2 to 3% position. And I was just trying to clarify to make sure they're not just holding it for, you know, it's not customers custodying with them. And it looks like it, you know? There's a little legit a number. Of Vanguard funds and then even Fidelity, it looks like it took a very tiny, tiny position, but that was as of September, so it's possible that's changed since then too. How exciting is that? Wow. So how is the valuation, How's the valuation? You know, the public markets are markets that assign a valuation on the net present value, the future value of the companies. I mean they're generally prognosticating in the future and aggregating that value at a share price. Is that true for the treasury companies as well? So I think that's a that's a great question because I think that's part of the confusion here that's created this opportunity is that people don't quite understand what the future value and potential value of these treasury companies could look like as they start to utilize their balance sheets and and really generate different opportunities and different operating cash flows.

41:25 So some of it is through staking, some of it's through other revenue generating opportunities. But eventually, you know, one of the other ways I framed it is that we were kind of in this accumulation phase where Michael Saylor, all these other digital asset treasuries are focused on accumulating as much as they can of these important scarce digital assets. And then we're going to get into this kind of operating phase of now what people do with those balance sheets or what these companies can look like. So Michael Saylor has talked about becoming more of like a Bitcoin bank. Some people look at these businesses like these become the future banks, Oregon, future endowments. Yeah, that they're the ones that actually. Kicking off, kicking off money. Yeah, yeah. Right. And not only hold a lot of this valuable asset, but then also help drive value to that whole ecosystem.

42:09 And through that could be through staking, through lending, through a number of other activities. And what can we talk about that has to do with the token and its scarcity for Binance? Is it, is that, you know, is that the traditional tokenization where you're burning things or is there a limited supply like Bitcoin? You know, can you talk a little bit about that? And if there's anything that you think that could go wrong, all of a sudden he opens up another, you know, $10 billion worth of tokens and it causes the the value of the token to get depressed. I know that's extreme and probably not true. No, but all fair questions like it's important to think through these things because people have all the kinds of worries when it comes to crypto because it's so new and you know, still so new and novel.

42:54 And so now that's another important reason why I've honed in on BNB compared to Solana, Etherium and Bitcoin. So Bitcoin has a cap supply, as you said, and we're getting very close to that. But the final bitcoins, the rate of new supply is decreasing, but the final bitcoins won't be mined for another 100 years. Now, Etherium has a slight inflation, so of maybe between 1 to 5% a year. The staking yields on 8th are also about, you know, one to four, one to 5% a year. So it's kind of matching the inflation. Solana also has an inflating supply and the staking yields are a little bit higher, anywhere from kind of four to six or 7% BNB. Out of all the large crypto assets, it's the only one that actually has a deflationary supply because there's a burn mechanism that exists and it was initially tied to the revenues of Binance, but in order to not be considered a security token as it evolved into B&B chain, what it did, it now has a two-part burn mechanism. 1 is an auto burn that exists in every single transaction. So whereas Ethereum, every transaction uses a little bit of gas to pay the miners, B&B has that gas to pay the miners, but it also has a tiny burn in place as well. So every single transaction that has a tiny way of reducing supply, there's also a quarterly auto burn that has been reducing that's based on the amount of transactions, the amount of blocks that exist.

44:14 So it's not directly tied to the revenue of Vinance anymore, but it's still every transaction, every trade counts as a transaction. All of the activity still contributes to the deflationary aspects of it. And just to give you a perspective, as of a couple weeks ago, the most recent quarterly burn, I think it was the 33rd quarterly burn, burned over 1.4 million BNB, which at the time was valued at 1.6 or $1.7 billion. So in terms of, you know, compared to the other assets that are inflating, you know, this is the only one that now is seeing a deflation of 4 to 5% per year on the supply. Wow, that's super interesting. And even that two-part, the two-part burn wasn't form over substance to get the regulators to get settled with it. You know, I, I wasn't part of that decision making, but if I analyze it like why I think that's part of it, you know, as, as these tokens and kind of crypto assets and people who are working on them try to come up with ways to evolve and improve and make them more robust.

45:11 It was a key step to making it really much more robust. Yeah, that makes sense. And so is there a way that more tokens can get issued as far as you know? No. And and actually another interesting thing that you know, it's kind of been framed to me is well, look, some people worry about the total amount of holdings of CZ or any any other large holders out there. There are early whales and in any crypto ecosystem, people worry are constantly tracking when large amounts of Bitcoin move or oh, this person held Bitcoin since 2014 and now is selling a billion dollars worth. So people are always tracking that across this. One of the kind of ways to think about this is that if you look at compared to Elon Musk, Bezos, Zuckerberg, all of these other guys that are, you know, have built some of the biggest and most important companies in the world. All of them actually have massive cash burns to fund all of their expensive hobbies.

46:03 So they need to be constantly selling their equity and, you know, taking cash out to pay for their hobbies. You're not going to live forever. You might as well enjoy it. I mean, it's part of the whole idea, right? So now CZ has a massive cash flowing business in Binance, right? And I know him and he doesn't have very many expensive hobbies he's funding, you know, Giggle Academy and a couple, a couple of other things. And so, you know, they're really about helping hundreds of 1,000,000 billions of people get free education. So he's focused on a lot of really nice efforts and he has no motivation or incentive to sell BNB his incentives. And he said this publicly. Part of the purpose of finance is to enhance and contribute to the value of BNB. So it gives me more and more confidence. I didn't say this before, but BNB has outperformed even Bitcoin over the last three months, the last five years, over the last eight years since it's been since I've been involved with this like I fully expect, right? I can't tell you what the exact framework and where Bitcoin heads from here, but I do expect that B&B will continue to outperform even Bitcoin over the coming years. Wow, that's big.

47:06 I mean, I know it's prediction, but it's your opinion and that's it. Wow. Yeah, he's an interesting character. I mean, only because I've seen. I don't know him as you know, but yeah. Well, he, he's, he's working on a book, I saw him say on Twitter. So when he puts it out, I'll get quite a few copies and I'll send you one. That'll be awesome. Yeah. You, you look, look at you just mentioned Bezos and they just sent Blue Origin up. That was like, how much did that cost, right? You got to have lots of money to burn to do that because SpaceX and and Blue Origin have blown up things. And that's part of the learning process. Yeah. Talk about burning. Yeah, it's like total burn. Exactly.

47:50 Very much a total burn of, you know, investor and government dollars. Yeah, it's wild. So this, this sounds like it's been really good for you too. It's like energizing for you, right? Yeah, absolutely. Like this, I've been doing a lot of stuff in the background and, you know, in the space and a bit more quietly. I, I think this has been just as the opportunity came up and it's been something I've been very passionately sharing and it's not without its challenges. And that's where fortunately, having been through a lot of cycles, you know, in the crypto space, I can genuinely say that I've been through this before. This is some new challenges. And that's why I'm eager and excited to share this with people because, you know, it's something that I haven't seen or I've rarely seen this kind of opportunity come up.

48:33 And even for when I jumped into this earlier in the year, the opportunity for new investors is actually even better than them. So it's a pretty easy thing for me to be out there sharing. Yeah, not hard to talk about. Well, I'm happy for you. Really excited. Appreciate that. Thanks for doing this. Is there anything else you want to make sure everybody knows before we jump off? Well, I think you know, recently, just another thing I like to put out just about where crypto is heading generally. Someone, someone had my other friend George Kikwadze, who was one of the founders of the Bitfury. He, he recently put out a book and then we win or, and then you win is the title. And just talking about the long journey, he founded one of the earliest Bitcoin mining companies, Bitfury. They mined 1,000,000 Bitcoins early on. And I heard him recently talking and a couple others have echoed this sentiment that, you know, when you think about the limit or the price that Bitcoin can get to or BNB or ETH or any of these other digital assets, he's like, well, as long as the governments are going to continue printing money and there's no end to the, you know, increase in the Fiat supply, there's no limit to the value that Bitcoin and BNB and other digital assets will reach.

49:35 I think that's. True. That's a bet. I'm pretty, I'm pretty happy to make, you know, going forward to the next couple years and decades ahead. Yeah, it doesn't matter and it and it really doesn't matter what your politics are, but no matter how many tariffs are imposed and how much money gets put into the US Treasury, I just, I just posted a third party thing talking about which countries have the most amount of debt. And of course it's us in China. But the graphic was really interesting because the US is here and everybody else is like, you know, around it. But that's not going to end anytime soon. So I think that's a pretty, pretty safe bet, right? Well correlated I think. Absolutely. Thanks, David. Wonderful.

50:16 Yeah, it's been great. Thank you for thanks for having me here. And by the way, everybody, the Bloomberg interview that you did is awesome. So if they want to look at that, it's also super interesting, particularly when the interviewers actually knew what they were talking about. And being that they were journalists on some level, they often try to corner you. And that didn't work out so well for them. That's what I'm saying. You, you handled it really nicely. Yeah. Yeah. It's super good. Well, listen, I enjoyed being here with you even more. Yeah, and I appreciate that. So all right, listen. And I have to get you down to Puerto Rico as well. We'll come. Yeah. Yeah, that's easy. So I'm going to hit the stop button, but stay on. Thank you everybody for being with us and really appreciate you spending the only thing you can't make more of and that's your time.

51:01 Until next time. Thanks.