Everyone Is Bearish.. That’s Why Bulls Are Excited #CryptoTownHall

**Scott Melker** (0:00)
Well, good morning, everyone. We might have a short show today because of the Juneteenth holiday. It seems like a lot of people aren't around, but we'll see.
Don't have a lot of speakers up here. Matt, I don't know what topic you wanna talk about, but I'm gonna vent a little bit about how dumb people are being about MicroStrategy and STRC. And I mean the word dumb, I'm sorry. But it is completely reasonable to be critical of Saylor's rhetoric. It is completely reasonable to be critical of the way that he has marketed or positioned it. In fact, you could even make the argument that the word's digital credit is just dumb. But the fact is it's effectively a high-yield product where the sole question that people have to face is will MicroStrategy be able to pay the dividend on the basis of their Bitcoin horde? The only question that you're asking yourself is, will Bitcoin be higher in the next five to 10 years or not? If it is, then they're going to be able to pay it. If in fact, if it goes up more than the rate of the dividend, then STRC is a good deal, not just STRC. MSTR, the strategy is a good deal and it makes sense to do it. But the question about whether the creditworthiness is really a question of Bitcoin price. And this notion that there's so much leverage and that they have to sell Bitcoin, I mean, they don't have to for the next year, basically.
It's just stupid. I mean, people calling it pegging, the DPEG conjured up all these ghosts of UST, which created an infinite loop of doom in Luna, which took down pretty much everybody in the crypto sphere, a who's who of investors, triggering massive waves of force selling across the industry. At the same time, in 2022, we had the ability to earn yield on Bitcoin collapse, causing various lenders to try to do stupid shit. Some dumb, some criminal, and some have gone to jail or have been convicted at least. And so looking at this and comparing these two situations is just dumb. And I don't understand how the posts are hitting hundreds of thousands of views, saying things that are just completely factually incorrect. STRC could trade at, in fact, I said it on Crypto Town Hall last week, that if it is high yield and people are as bearish, I could easily see it trading down into the 70s and it wouldn't surprise me. But it doesn't change Bitcoin's value proposition. And I just don't understand what people think about this and why, you know, why anyone listens. I mean, I would think that if you are following someone who made the comment that strategy is going to be margin called on it's Bitcoin to be force selling, that should be an immediate unfollow, if not a mute. Because if you're listening to those people, you're going to get very, very poor because they're telling you something that is a lie just to get clickbait. Now, I don't usually criticize people that badly, but I think it is that bad. Mauricio, you obviously are fielding questions all day long about this.
People who are associating your business, which is run professionally with all the crap that happened in 2022
You have the floor.

**Mauricio** (3:37)
Thanks, Dave.
Yes. Listen, I think the crux of it, as I've been reading a lot of commentary online, comes down to the fact that a lot of people that bought SDRC are not institutional investors. I think there was an analysis out that I thought was really interesting that said that the majority of SDRC has been bought by retail investors. And I think that's very clear to me now that I see the reactions because one of the main issues I find with this is this idea of the naming that has been chosen for SDRC, this idea of digital credit. When people think digital credit, people think it's something that trades at par, that has a maturity that you can hold to maturity, and that's going to clip a consistent yield that cannot be taken away by the board. This is not digital credit.
We issue digital credit. It's a bond and it trades at par. You can see it. It's trading at par live right now. I'll drop the link in the comments. That is true digital Bitcoin-related credit. It is a loan given to somebody using Bitcoin as collateral that has a fixed maturity date, that even if it goes in trades below par, you can hold it to maturity, get your principal back, your coupon won't change, and that's credit. And that's what people wanted when they were buying SDRC. They expected an instrument that trades at par, that they could be buying and selling basically at will, and that all they're doing is clipping this yield. They were not along for the ride of this thing going trading away from 100 And now, when you're holding an instrument that's paying you 7% annualized, but it drops 20% in a week, you're feeling that you got host. And yes, you will get host because there is no maturity that you can hold this thing to. There is no coupon that won't change. So I think this comes back to the idea that this was basically given a name that frankly doesn't really match the attributes of the instrument has. And people are now waking up to the fact that this isn't credit. This is actually a stock, a preferred equity. And this is what's the sort of moment of coming to Jesus moment that everybody's having is saying, oh my God, this is not a money market. Like I left my money market account to come into this, and now I'm down 20%.