Why Saylor's 'Inoculate' Comment May Be a Signal He'll Sell More Bitcoin

**Glenn Cameron** (0:00)
They can suspend the dividend for any reason whatsoever. They don't even have to have a reason. They could just be in a bad mood, and they don't have to pay the dividend.
So that is not debt. So by calling it digital credit, I mean, it's not against the law, but it is misleading.

**Laura Shin** (0:20)
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Today's guest is Glenn Cameron, CFA Global Head of Institutional at OnRamp Bitcoin. Welcome, Glenn.

**Glenn Cameron** (1:19)
Thanks so much for having me, Laura. It's nice to be with you.

**Laura Shin** (1:23)
There's been a lot of chatter about strategy and stretch, its variable rate perpetual preferred stock, also known as STRC. After strategy announced that the company had sold 32 Bitcoin worth $2.5 million last week, the price of Bitcoin kept dropping until it dipped below 60K. Then today, Michael Saylor announced that MSTR had bought 1,550 Bitcoin at an average price of 65,000.
We gave listeners a brief overview of what's happening in an interview with Jeff Dorman last week. But I know you also have your own takes. There's a lot of people that are criticizing Saylor and Strategy. There are others that are saying all of this is FUD. Give us your overall take on what's happening and the situation that they're in.

**Glenn Cameron** (2:14)
I think it's worth starting by saying that I'm not predicting anything.
Really, what I'm doing is I'm pointing out the risk, right? There's an old concept in investment professional circles where they make the distinction between risk and uncertainty, right? It's where risk is, you don't know the outcome, but you do know the odds, right? So for example, a roulette wheel, right?
You don't know which number the ball is going to land, but you do know the odds. Whereas uncertainty is where the outcome is driven by crowds of people, and crowds never behave the same way twice. So it's entirely unpredictable, right? And that's the case with the Bitcoin price. We can look to history as a little bit of a guide. If we do that, what we see is that every Bitcoin drawdown has been greater than 77%. The last one was greater than 77%.
The ones prior to that were the maximum drawdowns were in the mid-80s, right? But those were less sort of, it was a less mature market then. So a good benchmark is the last one, where it was starting to become institutional. Here, I would say the max drawdown could be slightly less. But on the other hand, there's all this leverage in the market now. So it could also be just as deep as that. We're only just more than 50% of its highs in October.
I'm not predicting that it's going to go further down this maybe the bottom. I'm just using all we've got, which is history, to give us a guide. Because like I said, this is uncertain rather than a probability that we can know that probability ahead of time. Now, so the situation with the 32 bitcoins, so the message given by Saylor about that was the purpose of it was, and I quote, to inoculate the markets. So if you think about that word inoculate, what does it really mean, right? It means when you inoculate something, you're preparing it for a bigger event, right? So if you read it literally, what it means is, because he's selling to inoculate the market, he's preparing for a larger sale later. And just the fact that he sold Bitcoin, you see, he now has changed his language. After many years, I've got a list of many, many quotes where he made it crystal clear that they would never sell Bitcoin. You know, he used to say things, sell your kidney, you know, to prevent selling your Bitcoin and those sorts of things, right? But there's literally countless examples.
Of late, he's kind of changed the language to, he'll never be a net seller. So he'll be a net buyer, right? But the thing is, how do you define that? It's a bit Orwellian when you kind of change, he says, I meant this, I meant that, because the issue is a net buyer over what period? Over the last five years, over the next five years? Because if it's over the last five years, you can sell 800,000 Bitcoin and you're still a net buyer, right? So uncertainty in markets creates volatility, right? So it was the signal that, and look, there are other things going on in the world. There's Iran and what have been, it's impossible to know what exactly is moving the price. But in that respect, that is the way I think some people do view it. And obviously the crowd splits on that. Now, today, I think the company is kind of feeling the heat. And I think the executives and team are definitely feeling the heat. You've seen a number of interviews with them, quite defensive.