Brandon: Well, hello, hello, everybody, and welcome to Good for Bitcoin, your weekly pulse on Bitcoin innovation. We are live on goodforbitcoin.com. Hopefully we are live streaming on X as well. We had some technical difficulties last week, but ⁓ I think we are hopefully back up and running now. ⁓ is STRC being stretched to its limit? That is the main ⁓ focus of today's show. we'll certainly get into that, but first just to check in, Kate, how was your week?

Kate: Ha ha ha. Okay, Brandon. Another slow week. I feel like people are gone on summer vacation. and just enjoying life outside of the computer in Bitcoin because ⁓ show up every week looking to report on the news and it's like, okay, what's happening? but it was I mean good week overall, but another slow one, I think, for us. ⁓

Brandon: Mm-hmm. Yeah. Yeah, we talked last week about it being kind of like a bottom signal. A lot of a lot of things were flashing that we were at the bottom and certainly continues to feel like that. ⁓ yeah, it's de it's dead out there. There's not a lot going on. Yeah. We're doing our best to continue to talk about ⁓ yeah, things that are happening week over week. And there there are some good things that happen this week. So we'll we'll certainly get into that. but ⁓ yeah, first thing is ⁓ nobody sold

Kate: Mm. A little bit. Hello. I know. For sure.

Brandon: Bitcoin this week on the public company side. So that's that's pretty cool. we have strategy. ⁓ they bought some Bitcoin. They bought one thousand five hundred and eighty six BTC, now hold a little over eight hundred and forty six thousand Bitcoin.

Kate: Then we have Mara, they acquired 1,000 BTC this week based on on chain data findings, and they now hold 36,306 BTC.

Brandon: That one was interesting because I saw that on there and it seemed like they have been selling off their Bitcoin. So to see them acquire a thousand. Interesting. What do they know? Strive bought seventy three E B T C. ⁓ they now hold ⁓ nineteen thousand one hundred and five Bitcoin.

Kate: Then we have DDC Enterprise. They bought 95 BTC and they now hold 2899.

Brandon: Cool. That that wraps up the buys. So a a light week for buys, but ⁓ nobody sold. So that's that's good, I guess.

Kate: Pretty short. Yeah.

Brandon: but yeah, let's let's get into the main story. So it's it's ⁓ stretch or STRC has just been taking an absolute beating this week. it dipped to a peak low of eighty-two dollars and fifty cents on Thursday, which was yesterday. and yeah, it's to be a hundred dollars. So a lot lots of FUD on the timeline about strategies strategy imploding ⁓ and ⁓ also lots of I don't know if you saw, but a lot of people were reposting this old interview from Sailor from like a year ago where he was saying that he basically came up with the idea for STRC by talking with Chat GPT. a lot of people were contextualizing it because chat has gotten, you know, like all AI has gotten so much smarter now. But if you looked at like a year ago, that means he was basically chatting with like GPT like 4-0, I think. ⁓ which

Kate: Yeah. Mm-hmm.

Brandon: like in retrospect was a really dumb model ⁓ compared to what we have now. So a lot of people were like dunking him dunking on him because of that. which yeah is is funny.

Kate: Yeah. That's so funny. I s I saw like a hilarious one. It was like obviously like an AI generated version of him because he's been using like so much AI generated images. And it's like he has like muscles, and it's like, chat, build me like the yeah, it's build me like a $10 billion strategy, make no mistakes ⁓ something. a $10 billion Ponzi scheme. Don't make any mistakes. ⁓

Brandon: Yeah, yep. Yeah. Yeah, yeah. Yeah, so lots of I wanted to like go even deeper into this. I did I didn't go as deep, I think, as I wanted to this week, but it I don't think that this is a Ponzi like people throw around scam and like Ponzi scheme a lot. Like that's not that's not what this is. and a of people were even comparing like is S S TRC like the next like FTX that's like no, like that's not Sailor isn't like

Kate: No, no, no, no. Yeah, yeah, yeah.

Brandon: Committing fraud and taking customer funds and like invest like it's very clear what you're signing up for when you buy STRC. ⁓ so yeah. a few things, a few like kind of yeah, reactions is on Tuesday, Strategy reaffirmed that they have quote 32 years ⁓ of dividend through their BTC reserve. one problem with that though is that if strategy was ⁓

Kate: Yeah.

Brandon: To become a forced seller, the price of BTC would like of course fall a lot. so their runway would actually not be 32 years. That would be 32 years, like if the price of Bitcoin was the as it is now, which like is just not a realistic thing to say. but they were just cr trying to come out, you know, and say, like, you know, we could we could sell our Bitcoin if we had to pay dividends and and and you know, keep the ship afloat, I guess.

Kate: Yeah.

Brandon: There was this message from CEO. ⁓ and Strive also, you know, has a very similar kind of digital credit mechanism as as strategy. Strive, I think, is probably number two when it comes to this this mechanism of like offering digital credit to, you know, to to buy more Bitcoin and put more Bitcoin on their balance sheet. and I feel like well, I about this last week and I think even the week before. ⁓ the comms coming from strategy and coming from Sailor have been bad. ⁓ know, in in response to this. and I think there was a really good post from from Matt Cole, who's the CEO of Strive. and I wanted to just say that their comms have been really good in response to this. there was this really long tweet that that Matt Cole posted yesterday, and I wanted to just like read a couple excerpts from it.

Kate: Mm-hmm.

Brandon: ⁓ he said what happened today was a leverage liquidation event, not a a deterioration in underlying credit quality. investors discover an asset that offers attractive yields, relatively low volatility, and strong underlying credit characteristics, many eventually decide that owning it is not enough. They borrow against it, they lever it, and then they attempt to enhance the carry. so when markets move against leverage holders, forced selling can create a cascade, prices fall, margin calls increase, more selling occurs, and the cycle feeds on itself. selling becomes disconnected from fund fundamentals and becomes driven by balance sheet constraints. And ⁓ it certainly did seem like a deleveraging of sorts to go from, you know, a hundred dollars to to eighty two. you if you're offering rates that are as good as, ⁓ you eleven point five percent, for a lot of people, it's cheaper to borrow money. you know, ⁓ it's it's

Kate: Yeah.

Brandon: The APYs that you'd pay to borrow money is less than you know 11.5%. So you could, in theory, you could borrow money, you could take that money, put it in, you know, STRC, capture the spread, you know, pay off your loan, and and you would make money, you know, by taking out a loan. so that seems like that was what people were maybe doing. And this was this leverage liquidation event that was that happened. And yeah, people were were getting delevered. But I think how I've Personally started thinking about these types of assets like STRC and ASST, which is Strives version, that kind of act almost like buying an LP token. And you know, LP token is designed to stay around $100. as we can see, it fluctuates sometimes, right? But that's like the goal is that it kind of stays around $100. So as a as a buyer of STRC, you're basically giving strategy money. they're giving you this ⁓ token in return. And the STRC price spills over $100, they're able to shave off the top and buy more Bitcoin with it. and all the while, you know, as part of that risk of you giving them that money, you're earning 11.5% APY as a dividend every two weeks. And yeah, you're you're taking on that risk. So that's kind of how I am thinking about it and trying to like translate it into like crypto you know markets. yeah, markets are closed today because it's Juneteenth in the US. but I came really close to buying STRC yesterday. I'm not gonna lie. I just eight ⁓ eighty two dollars, it just felt like it was gonna go back ⁓ up. ⁓ I know if it's gonna go back up, like when it's gonna go back up to exactly a hundred, but

Kate: Yeah, yeah.

Brandon: Yeah, it was it was really low yesterday and it just didn't seem like you know the the the fundamentals of it had changed so much that ⁓ you know it was gonna go to zero, right? It just it didn't seem super risky. I didn't end up doing it, but ⁓ almost did. ⁓ True.

Kate: Yeah. Yeah, that's a thing. Yeah. I mean, there's still time. I mean the fact that like their balance sheet hasn't changed. Like it's you know, it's more like a reflection of the market. So you could take the bull case and say, like, ⁓ this is a great time to buy. it's a cheap price cheap price to buy. but don't know, like it could also go lower because like it just feels very bearish up there. So like ⁓

Brandon: I know. It does.

Kate: It could ⁓ it could stress test this this mechanism even more and we we might be reporting that in the weeks to come, but yeah.

Brandon: Yeah. Yeah. I mean it's a it's a three day weekend. So it'll be really interesting to see yeah, what the price does on Monday when markets open back up again and people have had to had time to like chill a little bit and kind of digest what's happening. And yeah, it'll be interesting to see what happens on Monday if it if it starts to go back up or if it goes down more or kind of stays where it is and you know doesn't doesn't do anything.

Kate: Alright, well we can get into the next one. we've covered this a times on the show, but this one's about Square. They've started customer chosen BTC payments at Square Registers. so last month, I think, we covered it, merchants had to select it for their users during each payment, but now it just shows as an automatic toggle. So yeah, merchants can ⁓ auto enable it as long as running square point of sale 7.10 or newer and not offered in New York or outside the US but yeah I feel like this is removing friction again here but I still think like the biggest thing is you know people don't want to spend their Bitcoin but I don't know it's it's just cool to see them like innovating on this

Brandon: Yeah, it's pretty it is pretty cool. and yeah, I agree. It's like kind of more for the novelty of it ⁓ than anything. But yeah, you're gonna be on the hook for your taxable event if you buy something with your Bitcoin. but yeah, I'm gonna have to I'll have to check the the Square app ⁓ maybe a few days and you know after the weekend and and see if it's gotten bigger. I know last time I checked, there was only a couple.

Kate: Yeah.

Brandon: stores like in like a 20 mile radius of me that like were ⁓ were open and and accepting bitcoin. ⁓ but basically this if you ever if you've ever worked retail you know like when you're when you're tendering a sale right you're excuse me choosing you know customers paying with cash, customers paying with credit, customers paying, you know, whatever. And the the update, you know, a few months ago was, you know, the the as a seller, you had the option of choosing like customer wants to pay with Bitcoin.

Kate: Yeah. Yeah.

Brandon: now with this update, the that that selection is on the customer side. So when the customer is seeing, like, ⁓ you owe, you know, twenty dollars for this purchase, there's like a little Bitcoin butt button that they can tap on their screen and then they can just be like, Yeah, I want to pay with Bitcoin, and it just happens. And then the the seller doesn't have to do anything. They're like opted into this system. So ⁓ yeah. So a little less friction. It does. ⁓

Kate: Yeah. Yeah. That's cool. And it uses lightning rails, right? Yeah, very cool.

Brandon: Yeah. Yeah. It's using Lightning. So yeah, it's pretty cool. And then for the for the seller, they can I think by default it'll probably just automatically get converted to fiat for the seller unless they like actually sign up for like the square Bitcoin thing and ⁓ you know, want to get paid in Bitcoin or get a portion of it paid in Bitcoin, which they have the option to do. But yeah, I'll have to see how how it evolves and I'll have to check back maybe in a couple of weeks once this is like rolled out to more, you know.

Kate: Yeah. Yep. Yeah. Mm.

Brandon: merchants and ⁓ see if that map has has grown. We'll see.

Kate: Cool.

Brandon: saw this one and I kind I was really surprised by it. very curious to hear your thoughts. But I guess Illinois has signed this law that ⁓ is now it's now start crypto transfers, not just gains, you know, not just capital gains. It's gonna be actual just transfers. So starting January 2027. ⁓ Illinois Governor Pritzker has signed a 0.2% tax on crypto transactions into law that includes transfers between personal wallets. with the Crypto Council for Innovation calling it, quote, the most punitive digital asset tax in the country. and yeah, this is not a capital gains tax. This is a transactional tax. So all these things are taxable. moving crypto between two accounts that you own at the same broker. ⁓ so if you're moving, you know, crypto from like one Coinbase account to like, I don't know, like a Coinbase Pro account if they have those or something like that. shifting funds from a trading account to a vault at the same exchange, also covers withdrawals, gifts, payments to merchants, and sending crypto to a self-custodial wallet. or, you know, from a self-custody wallet to another self-custody wallet, because we all have like multiple wallets, right? And we all have like hardware wallets, you know, cold wallets. hot wallets, that is taxable if you live in Illinois starting January. yeah, the to collect and remit this tax falls on the exchange, not the individual, but the exchange will likely just, you know, collect it and pass it to you as a line item like sales tax. this is a state tax, not a federal tax. So it's only if you live in the state of Illinois. otherwise you are you are safe. but just as an example, right? So suppose you are an Illinois resident You move a thousand dollars worth of Bitcoin from your trading account to like your ledger, like Coinbase to your ledger. So Coinbase would collect $2, which is 0.2% of a thousand bucks. $998 would arrive in your ledger account. that same, and then say that you are like, ⁓ well, I want to actually have it in my like hot wallet instead. I want to put it in my leather wallet instead of ledger. So right. So then you move it there and then you're taxed again. ⁓ so every single time that you move it, ⁓ you are taxed. So it just compounds every single time that you move your your crypto around, ⁓ even though you are not gaining or losing, you know, any any money. So gonna be very I mean, we just talked about tax burden, right? Of of paying with Bitcoin. it's even worse it's just if you move your Bitcoin, you're you're gonna get taxed on it. which is this is just crazy to me.

Kate: Yeah. Yeah. Yeah. I think yeah, I read this and I was just like, what? Like what why this makes no sense because I mean if you apply it to like anything else, anything that's property, like it doesn't make any sense because again, like you're not selling it, you're not trading it, like you're literally just moving it. But think the worst part is I mean just gonna incentivize people to like keep it on exchanges and like You want people to self-custody their assets, right? so like personally for me, like this would incentivize me to leave any Bitcoin or whatever that I have on an exchange because I wouldn't want to like deal with that burden. But yeah, I don't know. ⁓ I mean I think what's would suck is if it goes through. And then they end up making a lot of tax money off of it. And then other states will be like, Ooh, more tax money. Let's copy paste. Yeah. Yeah. Yeah. I don't know. I have a feel.

Brandon: It's just a very, very dangerous precedent, yeah. Yeah, and like and what if you're if you're like a big Bitcoin whale and you live in Illinois? Like and you're remov like there I don't think there's like a max cap on it or something. Like that's the hundreds, thousands of dollars, you know, of taxes that you're having to to pay just for moving it around.

Kate: I don't Yeah, I don't know I don't know how you'd get around that. I mean, I'm sure there's some kind of way, maybe. I don't I really don't know, but I'm hoping that this dies on the spot because just

Brandon: I did see some people talking about that this will probably get challenged ⁓ legally. And ⁓ hopefully that does happen because yeah, just kind of it's just weird. I don't think that I mean you have certainly have the ability if you have let's say you have like a Fidelity account and a Robin Hood account, you know, you could move your stocks, you could transfer your stocks, you know, from one to the other. It's a little bit of a process because there's like centralized and ⁓ you know, there's there's

Kate: Yeah, for sure. Yeah. Yeah. Yeah.

Brandon: just centralized, you know, bureaucracy kind of in the way with that. But like it is possible to do. And I don't know if there's a a tax that's associated with doing that. So ⁓ yeah.

Kate: Yeah. There's just there's just so many things wrong with it. Like what happens if you get scammed and then you lose your money and then you have to pay taxes on it? Like can you imagine how horrific that would be? Anyway.

Brandon: ⁓ no. Yeah. geez. Yeah. Yeah. And then and certainly like also, yeah, we've been talking about all this AI stuff too, right? Like if AI is moving money around, ⁓ not good thing. Yeah. Yeah. One one more reason not live in Illinois, I guess. I don't know. ⁓ I don't

Kate: Yeah. Yeah. Sign me up never for Illinois. don't know. I've I've I feel like this won't there's just too many things wrong with it that it's like ⁓ don't know. ⁓ ⁓

Brandon: Yeah. Yeah. Pretty wild. ⁓ speaking of wild, a very wild stat is that Elon's Elon Musk's net worth ⁓ now higher than Bitcoin's entire market cap. ⁓ Saw that tweet this week and I couldn't believe it. But with yeah, with SpaceX and and Tesla and everything else, you know, he technically has more more ⁓

Kate: Yeah. He has more money than Canada. I read that one as well. Yeah. He yeah. And it's and it's his net worth is higher. It's a not just Bitcoin, it's the entire crypto industry combined too. Because crypto is worth 2.13 trillion. Bitcoin's like about 1.25 of that. so

Brandon: ⁓ my god, that's crazy. Well. Yeah. Crazy stuff.

Kate: I guess that's what happens when you dabble in space travel, robots, media, Crazy. ⁓

Brandon: AI Yep. Yeah. Crazy stuff. this news which was exciting. I'll let you cover it.

Kate: Yeah. Yeah. I mean it was kind of announced earlier in the year, but ⁓ the integration is like now complete. So stack stacks and fireblocks are like fully integrated with each other now. So has like over ⁓ four hundred institutional clients ⁓ that use them for custody infrastructure. And basically the integration just like allows them to easily use or other assets that they might have in the Stacks ecosystem now while basically keeping things, you know, in custody with Fireblocks and not needing to like move things.

Brandon: It was.

Kate: around so it's kind of like when we talk about being able to like buy bitcoin through your like retirement fund it just like opens the playing field for which is obviously a great thing for stacks but it's you know cool thing for firebox clients too especially with like bitcoin staking coming up in the summer it's yeah one-win integration

Brandon: Yeah, and we we I think we talked about it back when the integration was first announced that like this was coming soon. And it's so important because if you're like a major institution, you know, you're on boarded with something like Fireblocks, you're not using another custodian, you know, you're you're using Fireblocks. So if somebody on the the BD team at Stacks is coming to an institution and saying, like, hey, do you want to sign up for a dual stacking or do you want to, you know, sign up for like Bitcoin staking that's coming out? I mean

Kate: Mm-hmm.

Brandon: an immediate deal breaker if if they're on fire blocks and that's not available. So ⁓ yeah, it's a big deal. So pretty cool stuff.

Kate: Yeah. Yeah.

Brandon: ⁓ all right, last one is it's okay. Filter it out in post, it's all good. last one is BlackRock's new ETF has launched. ⁓ Bitcoin Premium Income ETF. the ticker is B I T A. launched the other day on June 16th. sells options against Bitcoin to pay investors a steady income stream. So it's a yielding Bitcoin ETF, I guess.

Kate: Someone is mowing my lawn next to me. I'm sorry if there's noise. I'm like, who's there? Yeah, that's what it sounds like. Just yield. More yield coming to the market in various ways. So we'll see which one wins. I guess they'll all win. Who knows? There you go. Yeah.

Brandon: I mean, if it's on Bitcoin over time, probably it'll, it'll, it'll win. Yeah. All right. Well, I guess that wraps it up for the week. Again, a bit of a quiet week on the news front. yeah, hopefully things start to to tick up a little bit, but we will, you know, whether it's you know, one news or or ten, we'll we'll keep covering it every week. ⁓ thank you everybody tuning in. It was a earlier episode today, but we still wanted to to get an episode out. so yeah, thank you everybody for tuning in.

Kate: That's it. Yep. Yeah.

Brandon: Go subscribe to the show. Go give us a review. don't I don't really mention that enough. go give us a review on whatever podcast app you're you're streaming on. ⁓ helps us a lot. and yeah, we will see you all next week.

Kate: Mm-hmm. Awesome. See you guys, have a good weekend. Bye.