Why Mike Dudas Has Zero Exposure to ETH, but Is Bullish on Hyperliquid

**Mike Dudas** (0:00)
The no KYC market is enormous. So the answer to that is, I don't know about the word dominant, but do I think that Hyperliquid could continue to grow if they could only legally operate outside the US? And the answer to that, in my perspective, is obviously yes. I mean, just look at Binance. By far the biggest exchange in the world has never been able to have a successful US-based business of any real scale.

**Laura Shin** (0:31)
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Today's guest is Mike Dudas, managing partner at 6th Man Ventures. Welcome Mike.

**Mike Dudas** (1:24)
Hey, how you doing? Good to be here.

**Laura Shin** (1:26)
Yeah, nice to have you. Well, despite the fact that it's been a bloody week in the crypto markets.

**Mike Dudas** (1:33)
Well, it's new.

**Laura Shin** (1:35)
Yeah, yeah. Well, that's true. But Bitcoin's down about 12% over the last week, 22% on the month, 27% year to date. The numbers for ETH are even worse, 11% on the week, almost 26% on the month, 40% on the year. We're not even going to go to Solana because that's even worse.
But it seemed like this week, what really affected the price was this news that MSTR had sold 32 Bitcoin. It's only $2.5 million worth, but that seemed to, I guess, cause some lack of confidence in the market. Not only did we see that the price dropped 10K, basically, over the last few days, but we're continuing to see a lot of discussion about these various instruments that are part of MSTR.
Jeff Dorman of ARCA was on the show earlier this week and talked about how the companies kind of put itself in a bind with the capital structure, has four different sets of stakeholders. He says that they cannot all be satisfied at once. And he feels like the company made a few different missteps that kind of caused the market to lose at least a little bit of confidence. How do you view everything that's going on there?

**Mike Dudas** (2:48)
Yeah, so Sailor and Strategy are trying to do sort of like two things at once. And I think the one that, Jeff, that you just talked about, the financialization of Bitcoin and Bitcoin exposure is one big thing that they do. And I think it's like the most covered thing by analysts, looking at what's happening with Strategy this week or this year.
But the other one is, it's very different than the financialization of Bitcoin, and that's this like sort of turning it into a memetic asset. Sailor posts quite a few memes, and sort of a religious, believe me approach that this is a messianic asset and it's the chosen one. And those two things aren't super compatible. It's like dissonance to hold them both in your mind at the same time. So the messianic promise had always been like, I'm never a seller of this asset. Like I simply believe in it. So whether it was a couple hundred Bitcoin or tens of thousands of Bitcoin, if selling any sort of takes one leg of the stool of the story of strategy away, and the market responded tremendously negatively to the never sell promise. Going away. And the next steps are going to be the really interesting ones. Are they going to sell more? Because obviously, it would take some concern over the next couple of years around strategy and STRC away.
That would be negative. Are they doing that right now? I think the market maybe doesn't really know. But I think part of the story around strategy, the sort of religious fervor and belief in it has been punctured. And I don't know how you put that genie back in the bottle. And the market doesn't like it at all.

**Laura Shin** (4:43)
And if the Bitcoin price continues to go sideways or even down further, do you have an idea of what you think MSDR should do to be able to keep paying the dividends on the preferreds? Yeah, I don't know if you have thoughts on that.