I know this is probably a rhetorical question, but do you have any regrets? You know um. We did a lot of uh a lot of back testing and ive gone back and ive looked at the numbers and on august 10th of 2020, when we announced our 250 million dollar bitcoin buy uh since then bitcoins up 72 percent. The money supplies up 17 percent. The nasdaq is down 2 goals down 9, the s p is up 9 and the only thing that looks better than the money supply expansion is single family homes. Up 26 i couldnt have bought billions of dollars of single family homes and so thats, not even practical. So the bottom line is the bitcoin strategy is 10x better than any other alternative, and so now i dont regret it. Uh weve got 2.8 billion dollars worth of bitcoin on our balance sheet right now, and we feel like were positioned well for when uh the markets turn around, and our only other choice would be to give all the capital back to the shareholders, in which case we Would have nothing and we would be struggling to get by without any assets. Okay, how about this is cash still trash yeah. I mean the money supplys expanded by 41 uh since january 1st of 2020, when we went into this kind of covid crisis, and we know that scarce desirable assets are getting bit up in price. I mean everybody wants to buy rolex, watches, theyre, buying luxury real estate.

Theyre buying everything they get their hands on creating shortages, so you know we, we are an institution, we have to take a 10 year view, and the only thing thats for sure is: if we hold cash over a decade, were going to have a negative, real yield. The only question is how much so we have to invest in something and weve chosen as a business strategy to fos focus on what we believe is the most exciting investment idea, because its a digital commodity, thats, absolutely scarce and only getting technically better every year. So, are you considering buying more bitcoin at these prices? I mean is bitcoin on sale yeah. I think it is on sale um. I you know that the number that i look at to figure out uh sort of the a surrogate for the book value of bitcoin is the four year simple moving average because it trades billions of dollars a day and so, after 1400 days of billions of dollars. A day that number is 21 700. uh bitcoin touched that uh in the march 2020 2020 crisis. It touched it around 2017, its touching it right. Now, generally it trades above there. You know our strategy is uh were going to acquire bitcoin with our free cash flows. From time to time so were kind of dollar cost averaging into bitcoin and were going to hold the bitcoin for the long term and uh, and so it wouldnt really matter whether the price was 10, more or 20 percent, more or 50 more uh were just going To progressively acquire more bitcoin uh because thats our strategy, but so you are in terms of being for sale yeah, i mean its like, not a bad price and we will keep buying more okay.

What if it gets below that 19 511 number, which was that top of the 2017, i believe bull run? You know what is that. Is that a time to panic, we dont panic, we have a. We have a strategy were not traders. If your time horizon is less than four years youre sort of a trader, if its in the months youre, definitely a trader im, not an expert trader, i dont have a crystal ball. I dont know where the markets going to go week by week, month by month, uh, if your time horizon is more than four years youre an investor and when your time horizon is 10 years, youre kind of a saver. So we have a very long term, 10 year time horizon and our view is over the 10 years. Uh bitcoins gon na be a good idea and its just gon na keep accreting and value uh. You know i cant tell you whether itll go down a bit here and there its in the near term, emily it trades like a high beta risk asset and theres. No denying that, over the long term, we believe its a low risk store of value asset theres about 10, things that have to happen over the next decade to make it a better asset and we kind of know what those 10 things are, and so were waiting And uh and biding our time, and we think that its going to improve as an asset class over time and were not in a hurry.

So what do you see in the lets talk to take this 10 year horizon, for example, weve seen what the fed is doing with rate hikes theres. All of this concern were heading into a recession, whether its a capital, r or a lower case r recession. What do you see on the road ahead and how is that impacting your strategy to you know, just buy more and hold yeah so lets. Take the 10 sources of my pain, theres, no wash trading rules, so people can they can sell their bitcoin and buy it back and harvest the tax gain and thats not the same with apple. So if that gets fixed by the house, ways and means committee thats, a big plus for the asset, theres 520 unregistered crypto exchanges offering 20x leverage thats a negative for the asset class as they get regulated and i expect they will and as the 20x leverage disappears. Thatll be a positive theres, 19 000 unregistered securities in the crypto industry cross collateralized against bitcoin, as as those things have to uh have to get eliminated, or they have to convert them into publicly traded instruments. Thats going to decrease the volatility to be a big shakeout. The wildcat banks, like the you, know the terrorism lunas and celsius. They actually create massive volatility and as they get regulated and they disappear and they grow up and become institutionalized banks uh the asset class will mature theres a lot of ignorance and fear.

People think crypto is the same as bitcoin if they think that that means they dont understand either of those two things we dont have a stable coin. Emily uh, like ust isnt, the stable coin tether, is an opaque, uh security. No one understands if we ever have an fdic issued stable coin or something from a public entity, thats endorsed by the sec thats going to be very bullish for the industry, theres no spot etf. I think its only a matter of time before there is one approved thatll be very bullish for the industry. The fasb accounting is detrimental. The lack of fdic guidance makes it difficult, if not impossible, for banks to hold this stuff were waiting for clear sec, cftc guidance and those 10 things theyre going to get cured over the next decade, theyre just not going to get cured over the next 10 weeks. Okay, so how are you looking, then, more broadly, at what happens to the industry after this, you know were seeing coinbase and a number of different crypto companies having major layoffs? Do you think well look back on this moment as some sort of inflection point for the industry and if so, how does it look different in the future were crossing the chasm uh theres about a trillion dollars in the asset class 400 billion is bitcoin the other 400 billion is 19 000 unregistered securities uh were moving from the era of the offshore entrepreneur to the uh to the onshore public institution and its pretty clear from chair genslers comments that he made in the last few days that uh they want to see all the Crypto exchanges regulated uh, they want to.

They want to clean up this industry. The stable coin is going to have to be cleaned up as well and uh. The winners are going to be the public investors in public banks and public companies, and the losers are going to be the wildcatters, you know, and the entrepreneurs the guts got started that are flying by the seat of their pants and i think its essential for us To move from a one trillion dollar industry to a 10 trillion dollar industry, so i welcome it.

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