Deep Tide TechFlow Wu said Real July 7, 2025 09:00 Shandong
Translation | Deep Tide TechFlow
This podcast is sourced from Unchained on June 13, with some information potentially being outdated. Circle's stock price reached a peak of $263 on June 23 before falling all the way down, currently hovering around $170-190.
Speaker:
Haseeb Qureshi, Managing Partner at Dragonfly
Robert Leshner, Co-Founder & CEO of Superstate
Tarun Chitra, Managing Partner at Robot Ventures
Laura Shin, Founder & CEO of Unchained
Key Points Summary
· Circle's IPO Shocks Wall Street — Rare Two-Day Surge in IPO History: Was this a pricing error by bankers, or is cryptocurrency disrupting traditional finance (TradFi)?
· Stablecoin Craze or Meme Stock Frenzy? — Circle's valuation has reached 160 times earnings and 15 times revenue. Tarun likened it to 'the CoreWeave of finance' (a company focused on high-performance computing infrastructure).
· Tether may exit the U.S. market — With new regulatory policies approaching, will Circle dominate the U.S. market while Tether turns to the international market?
· Coinbase's Revenue Share — Why Coinbase could be the biggest winner behind USDC, revealing the hidden economic logic behind stablecoin profits.
· Challenges from Bank Alliances — Reports indicate that JPMorgan and Wells Fargo are planning to launch their own stablecoins. Is Circle competing with these traditional financial giants?
· The Rise of Government Bond Tokens — From MicroStrategy to Derivative Projects of Solana: Will 'Crypto Holding Companies' Become the New ETFs?
· Imitators or Thought Leaders? — Why many attempt to replicate Michael Saylor's success but most are doomed to fail?
· Are these companies meme stocks? — Laura and Tarun debate whether trading crypto companies have actual value or merely rely on market sentiment.
· Is this financial innovation or regulatory posturing? — Haseeb asks: Are we maturing the market, or merely putting a crypto cloak over traditional finance (TradFi)?
Circle's IPO: A Historically Significant Event
Haseeb: The wave of stablecoins has fully commenced. We just witnessed Circle's IPO, which could be the most eye-catching listing event of the year, and it is truly amazing. For those who are not very familiar, Circle has been working for years to push for an IPO. They initially attempted to go public during the SPAC (Special Purpose Acquisition Company) craze but failed. Earlier this year, they tried again for an IPO but stalled due to tariff issues. Ultimately, they made another effort and successfully completed the IPO. During this time, there were even rumors that they might be acquired instead of going public, but ultimately those speculations did not come true.
Circle's IPO performance has been stunning. It became one of the largest first-day gainers in history and is the highest-gaining case in the first two days among all IPOs that raised over $500 million since 1980. The stock price surged by 180% on the first day and another 30% the next day, with a total increase of 250% over two days. In the IPO, they initially raised $1.1 billion. If calculated based on the closing price the next day, they could have raised $4 billion. This indicates that the IPO pricing was underestimated by nearly 4 times.
Currently, Circle's valuation multiples are also astonishing. Based on 2024 revenues, their revenue multiple reached 15 times, while their price-to-earnings ratio soared to 160 times. In contrast, Coinbase's price-to-earnings ratio is only 25 times. This high valuation also reflects the market's high expectations for Circle. Of course, due to the IPO's lock-up period (usually 180 days), insiders cannot sell their stocks during this time.
It now seems that this IPO is a signal announcing the arrival of the stablecoin era. I believe most people did not anticipate such an outcome. Previously, there were concerns that market interest for this IPO might be insufficient, even requiring a price reduction. However, the reality is quite the opposite; the pricing not only remained unchanged but also skyrocketed amid enthusiastic public market support.
Market Reaction and Far-Reaching Impacts
Haseeb: Robert, what do you think about Circle's IPO?
Robert: This IPO is truly shocking. It shows everyone how high the market's enthusiasm is for newly listed crypto companies. I think even Circle did not foresee it would be so successful, nor did bankers and investors. Even in crypto Twitter, hardly anyone thought there would be such an outcome. The real question is, where does such strong demand come from? Because when I communicate with many people, everyone felt this IPO might be a bit volatile, but the result surprised everyone.
I believe this IPO redefined the market's valuation expectations for crypto companies in the public market. The demand is so strong that it is beyond imagination. Therefore, I believe this will accelerate the listing plans of other crypto companies. We have already seen some companies submitting new applications.
Haseeb: Do you think the enthusiasm for this IPO reflects the interest of the entire public market, or is it limited to the stablecoin sector?
Robert: I believe both are true. Everyone wants to enter the stablecoin market. Everyone knows that the (Genius Act) and (Stable Act) are progressing, and stablecoin legislation is on the way. This is a fast-growing market, although it is still uncertain whether Circle will be the sole beneficiary. To some extent, this legislation may pose certain challenges for Circle. However, stablecoins are undoubtedly a hot topic right now, and truly crypto-native public companies are very scarce in the U.S. market. So this is not just a stablecoin story; I think it’s just the beginning. The demand for high-quality, scarce companies will far exceed expectations. After all, there has never been an investment opportunity focused on stablecoins before.
So, is Circle overvalued? Possibly. Compared to Tether, Circle is indeed overvalued. But the issue is that there is currently no other way to directly bet on stablecoins in the market. Investing in Layer 1 blockchains like Ethereum or Solana does not adequately capture the success of stablecoins. Therefore, if you are a public market investor, Circle is undoubtedly the more direct choice.
Haseeb: According to analysis from Jon Ma at Artemis, if Tether traded at the same valuation multiple as Circle, its market value would reach about $500 billion. In comparison, JPMorgan's market value is about $700 billion. This would make Tether the second-largest financial company in the world.
Robert: In a sense, Tether's valuation multiples seem more reasonable compared to Circle because Circle's profit margin isn't high. They have a large number of employees and also have to share a significant amount of revenue with Coinbase. In contrast, Tether's profitability is stronger, thus justifying such a valuation multiple.
Legislation Related to Stablecoins and Tether's Response Strategies
Haseeb: Another noteworthy piece of news is that the (Genius Act) will be voted on tomorrow. By the time you hear this news, the voting results may already be out. We can make some predictions about the outcome.
It is estimated that the result of this vote may be 66 votes in favor and 32 votes against. So I believe the bill has a high chance of passing, but the final outcome still needs to be confirmed. However, from the current situation, it indicates that there is strong demand for this bill in the market.
Meanwhile, Tether indicated that if the (Genius Act) passes, they will consider exiting the U.S. market. This is because the bill stipulates that stablecoins must be backed by high-quality collateral, such as short-term government bonds. This is exactly the model that Circle and most other stablecoin issuers adopt. However, Tether's asset portfolio includes many other types of assets, such as commercial papers, Bitcoin, and some other loan projects. Therefore, to comply with U.S. regulatory requirements, they would need to completely restructure their financial infrastructure to ensure that all stablecoins are backed by safe and reliable assets.
Robert: But will they really do this? Because according to the requirements, stablecoins need to have 1:1 asset backing. And Tether has already accumulated over $10 billion in profits, which are used to invest in various assets. If they want to strictly achieve 1:1 backing, I believe that with their profitability and possible over-collateralization, this is not a difficult task.
Haseeb: Maybe so, but Tether has publicly stated that they will exit the U.S. market. Of course, this could be a strategy to influence regulatory decisions through pressure. But they did mention focusing more on the development of non-U.S. markets. I can understand this because the cost of restructuring the asset portfolio could be very high. Moreover, this also means that every operation they undertake in the future will be under strict oversight from the Federal Reserve.
Tether has always been a relatively closed and opaque company, and they seem more inclined to maintain their existing business model, so such a reaction is not surprising.
Circle's Market Position and Future Development Directions
Haseeb: Circle's business model is essentially a money printing machine, which may explain why its premium is so high. People realize that Circle will basically dominate the entire U.S. market because Tether is unwilling to accept the upcoming regulatory framework.
This means Circle will compete with banks. Currently, there are many reports indicating that banks are considering forming a consortium. I believe large banks like JPMorgan and Wells Fargo are discussing the launch of a consortium stablecoin comprised of large American banks. Therefore, the industry may see a differentiation: Circle onshore, as a crypto-native tech company, while banks mainly serve institutional clients and may be more risk-averse. The international market might primarily be dominated by Tether. On-chain, USDC remains dominant due to its historical position. I can imagine different fields will be led by different parties, but clearly, it is still too early. Laura, what do you think about the surge in Circle's popularity?
Laura: I agree with Robert's point that Circle's popularity is not only due to the popularity of stablecoins but also because it is a public company. This crypto reserve company, particularly a Bitcoin reserve company, is sought after in traditional markets for crypto exposure. Therefore, Circle meets demand in both aspects.
But the problem is, all the talk about Tether we've had, I recently interviewed Jeff Park and had a fascinating two-part discussion. Basically, stablecoins could transform dollars into multiple products if the U.S. is willing to view this asset more entrepreneurially, as many places in the world need it.
Will governments unite to recognize this as something of value, and if they view it more entrepreneurially, how they could leverage it? For example, Tether is often said to be a good example of dollars, with high demand for dollars abroad. It is conceivable that depending on the different companies or those wanting to mint stablecoins, there could be different yields. Therefore, I believe people understand that there is tremendous space in this category to accommodate many different niches.
Interestingly, I have asked two different people to talk about Circle, and they both had negative views on Circle's IPO, believing it was already evident before the IPO actually happened. Circle's spending is massive, and its business is very different from Tether since it is compliant. Some in the securities field even complain that once bad behavior occurs, Circle won't freeze funds when using USDC because, as a U.S. company, they are more easily subject to lawsuits, while Tether does not have this issue.
This is considered common knowledge in the crypto space, but I saw a tweet from someone who used to work at Circle. She wrote that from a financial infrastructure perspective, observing the pricing of Circle's IPO is exciting. When you control currency issuance, you are no longer in fintech but in the realm of monetary policy.
She listed the numbers: PayPal's market cap is $70 billion with a transaction volume of $15 trillion; Visa's market cap is $500 billion with a transaction volume of $14 trillion; Circle's valuation is $6 billion with a transaction volume of $1.2 trillion. Thus, its transaction volume is very close to Visa, but its market cap is only about 12% or 13%. She pointed out that everyone in the crypto space is underestimating this, but she noted that a 25 times oversubscription is the real story. The underwriters' pricing was too conservative and missed a fundamental change. She said Circle controls the printing press for digital dollars.
So honestly, I don't know how this will play out, because everything about Circle, even just the fact that they have to give half of their profits to Coinbase, means Coinbase earns more from USDC than Circle does. There is an industry pyramid indicating that those with distribution channels are the most powerful, such as exchanges. Therefore, I understand Circle's business model, but at the same time, stablecoins will become a huge category.
Tarun: I actually attended the IPO party on Friday. First of all, I've never seen so many traditional finance people at a crypto event. In fact, only the three of us weren't in suits. That was a fun and enlightening moment. They rang the closing bell with a crowd around them, while the three of us stood at the back.
I just want to say I've never seen traditional finance people show such genuine interest in this matter. Usually, they are just doing some superficial work, like saying 'Oh, Bitcoin prices are rising, we will pretend to collaborate with blockchain.' But this time it is clearly not the case. I feel like everyone is congregating in the area related to non-bank financial lending, and all the major private credit fund CEOs are present.
I think Circle has a very different audience from Tether; their net assets are almost completely different, and the users of both are hardly overlapping, unless trading USDC in the Curve pool. Other than that, I think they will differentiate over time. I feel like if you look at many new stablecoins, Circle may have paid a high price for early distribution advantages, but clearly, no new stablecoin has been able to find distribution channels comparable to Coinbase's trading.
I'm not talking about Tether, but all competing stablecoins, which either face this problem or have to pay more than Circle for distribution channels. I believe Circle has set the bottom price for any distribution deal, making it difficult for newcomers to overcome this hurdle. Because everyone will say, 'Give me 75% to 80% of the revenue,' instead of 50%. I think this actually creates an interesting pricing power dynamic that raises the barrier for newcomers. Therefore, you are more likely to see banks succeed rather than startup stablecoins.
Haseeb: You mentioned Circle's dominant market position; we all agree on that. What do you think about the pricing? Because this is what most of us have commented on.
Tarun: Did you know? There are two meme stocks starting with C, CoreWeave and Circle, which were founded almost simultaneously. I believe CoreWeave and Circle are meme stocks, but their implications are the opposite of GameStop. They are meme stocks, meaning they should see significant growth over the next 10 years. The problem is that there are hardly any agents to bet on these two separately. So everyone concentrates all their bets together.
Haseeb: That's the real story. I think now, the only investment that can represent stablecoins in the public market is Circle. In fact, if we talk about low liquidity tokens, like IPOs or IPO low liquidity, there aren't many investors wanting to have that narrative. Thus, the narrative gets pushed up. When there is more supply in the market, there may be more opportunities, although I believe this will happen.
Tarun: Circle's IPO volume is far higher than that of some data center companies. I mean, CoreWeave's IPO isn't exactly what I would show to regulators, thinking that crypto is worse than these low liquidity, high FDV companies. In recent weeks, the performance of some AI IPOs also looks like bad crypto.
Haseeb: But interestingly, if half of Circle's revenue goes to Coinbase, it means that if you look at the current valuation, Circle's revenue plus the revenue from Coinbase's other businesses would generate Coinbase's market value, implying that the trading multiple of Coinbase's other revenues may be less than 3 times.
This is clearly not the case; this is clearly a result of Circle's very low circulation, resulting in little price discovery due to the strong demand for stablecoins. Buying Coinbase doesn't give you enough exposure to stablecoins, while Circle is a pure stablecoin investment you can make today. But the interesting part is, if the market is efficient, Circle should be repriced when everyone realizes Circle's revenue is worth far more than we imagine.
Tarun: So if you look at the market cap ratio of CoreWeave to its clients, clients are revenue-sharing/building clients, which isn't too different from this case. Therefore, I think you need to focus on macro market factors. I do think the market is getting tired of pure ETF bets, with things like Microstrategy and treasury bonds, you see the tenth treasury issuance not performing well. I think Circle actually represents a real product for people, rather than being the tenth Bitcoin treasury company. The irony of these Bitcoin treasuries is that they might kill their golden goose because too many competitors are chasing the same opportunity simultaneously.
Crypto Reserve Companies: An Emerging New Trend
Haseeb: Next, let's talk about crypto reserve companies. This is a topic we've mentioned multiple times in the show, but there are still many areas worth delving into. For those unfamiliar, the original crypto reserve company was Microstrategy (now rebranded as 'Strategy Company'). This company started as a software enterprise, but has now essentially become a massive Bitcoin reserve. They raised funds by issuing corporate debt to purchase more Bitcoin. It is perplexing that Microstrategy's stock price is about 1.7 times its Bitcoin value (net asset value NAV). Why does this premium exist? This is a contentious topic. Some believe this premium might be due to investors seeing its leverage effect and its potential to continue accumulating Bitcoin. By purchasing Microstrategy's stock, investors essentially gain an indirect Bitcoin leverage exposure.
We also see other companies adopting similar strategies. For example, Jack Mallers' 21 Capital, Trump's media, Korea's Nexon, and Japan's Meta Planet. However, some critics worry this could become the next GBTC (Grayscale Bitcoin Trust). GBTC once triggered the collapse of 3AC due to its complex leverage mechanism and caused a series of chain reactions through crypto lending platforms like BlockFi. However, unlike GBTC, these reserve companies do not have obvious leverage mechanisms, as their debt operations are entirely different from hedge fund leverage trading. Laura, (Unchained) recently published an article about the compensation structures of these reserve companies; could you summarize that for us?
Laura: These companies have adopted different approaches in evaluating and rewarding executives. Traditionally, stock price is often a measure, but some companies have tried more innovative models. For example, a company called Defi Dev Corp has reserves in Solana. They link the compensation of their CEO, CFO, and CIO to the number of Solana per share. This model is very interesting because many such companies are currently valued far above their actual asset holdings.
Haseeb: This also reveals why solely relying on stock prices as a measure is problematic. Because the value of these companies is highly related to their underlying assets, and the prices of those assets are very volatile. If the price of Solana rises sharply, even if the executives take no actual action, their compensation will rise accordingly, which is clearly unreasonable. In contrast, a more reasonable measure should be whether executives can effectively incorporate more Solana into the company's reserves.
Robert: In fact, this incentive mechanism is designed to push companies to buy more crypto assets through issuing debt. For instance, if a company adopts 5x leverage, the amount of crypto assets per share will significantly increase, but it will also substantially heighten the company's risk. This model resembles a leveraged ETF (exchange-traded fund), although due to its complexity, it cannot be entirely modeled as a traditional leveraged ETF.
Haseeb: The key lies in how leverage is used. Some leveraged methods are extremely risky, while others are relatively safe.
Robert: For example, Microstrategy's leveraged approach, which seemed risky at first, now appears to have proven its success.
Haseeb: Indeed. They recently launched a new form of debt called 'Strikes'. Its characteristic is that debtors do not have to repay the debt, and there is no recourse mechanism. In other words, if a debtor misses a payment, they do not need to make it up later. And this debt typically offers a 10% coupon as an incentive for investors, that's all.
In simple terms, the debtor is like saying to investors, 'You can buy my bonds, but I may never pay you back.' They then use the borrowed money to buy Bitcoin and enjoy the benefits of Bitcoin price increases. Meanwhile, investors can only passively hold this debt, unable to enforce collection or share in the profits from Bitcoin's rise. This model allows debtors to take the initiative while investors appear very passive.
Tarun: An interesting theory has been proposed that suggests Microstrategy's successful model is similar to Bitcoin's forking mechanism. When Bitcoin forks, holders receive new Bitcoin airdrops, often prompting them to sell the new coins and buy more Bitcoin, thereby increasing the overall value of Bitcoin. Similarly, Microstrategy's 'fork' could refer to those secondary and tertiary Bitcoin treasury companies. If these companies gradually fail, investors might shift their focus back to Microstrategy, making it the core focal point of Bitcoin treasuries. This phenomenon could further solidify Microstrategy's position in the market. Unless there is a severe crash in Bitcoin prices, Microstrategy has proven its resilience, even if its scale may no longer be as large as at its peak. Other Bitcoin treasury companies are more focused on competing for marginal resources in the market.
As for those willing to purchase debt from lower-ranking Bitcoin treasury companies, I find it hard to understand their motivations. Microstrategy is a more ideal choice. As Robert mentioned, they have accumulated a substantial amount of Bitcoin through a high-risk leveraged strategy and successfully established their treasury. This enables them to issue convertible debt at a lower cost. However, the capacity of the convertible bond market is not infinite, and not all investors are willing to participate in such transactions. In contrast, most people prefer to buy Microstrategy's stock directly, as its debt trading is more straightforward. Engaging in this debt arbitrage requires higher expertise and a deep understanding of risks, and there are not many investors willing to take on such complex operations.
From a market structure perspective, this arbitrage opportunity can be likened to a fixed ‘demand pie chart’, with Microstrategy holding at least 50% or more of the market share. The remaining market is contested by other Bitcoin treasury companies. However, even if the convertible debt market grows by 10% annually, it will be hard to meet the financing needs of all companies. Therefore, I believe some Bitcoin treasury companies may be forced to transform in the future due to an inability to continue issuing debt, seeking other financing methods or strategies.
Analyzing Convertible Bond Arbitrage Opportunities in Cryptocurrency
Robert: Traditional convertible bond arbitrage has a significant difference compared to crypto treasury companies. If it were a typical non-crypto treasury company, like a Midwestern manufacturing firm issuing convertible bonds, the market primarily focuses on the stock's volatility and the potential for appreciation above the conversion price. Investors use options pricing models to determine the value of convertible bonds. However, this market is very small because it essentially bets on the volatility of a specific company. Furthermore, investors not only take on the company's debt risk but also need to perform complex assessments combined with options strategies.
For Microstrategy or other crypto reserve companies, the situation is entirely different. The downside risks for these companies are primarily tied to Bitcoin price volatility rather than the operational risks of the companies themselves. You could say these companies are more like a 'storage box,' and their core value depends on Bitcoin's performance. This consistency means investors do not need to worry about complex company risks but can focus on Bitcoin's volatility and downside risks. Compared to the traditional convertible bond market, this model attracts more capital because the overall scale of the crypto market is larger, and as Bitcoin and other cryptocurrencies become more popular, this market will continue to expand.
Tarun: What about companies related to Solana or Ethereum? The market size for Bitcoin is indeed large enough to support such strategies, but I have doubts about Solana's sustainability.
Robert: It depends on the size of the spot and derivatives markets. If Ethereum's derivatives market is large enough, then hedging or modeling convertible bonds for Ethereum strategy companies is not difficult. But if it is some low market cap crypto asset, like the 400th ranked coin, the market demand is very limited, trading is inactive, and risk hedging is extremely difficult.
Tarun: I believe every asset has its carrying capacity. While Bitcoin's market size is large enough for people to accept a longer holding period risk, even for Ethereum, very few are willing to take on a lengthy holding risk. This is evident from the financing rates and options pricing of Ethereum ETFs.
Robert: However, the financing rates for Ethereum and Bitcoin are actually not that different.
Tarun: From the perspective of unclosed contracts, the weighted results show a significant difference between the two. I think there won't be more than 10 Ethereum strategy companies.
Haseeb: There may be as many as 10 Bitcoin-related companies, while Solana may only have 2.
Tarun: In fact, there are far more than 10 Bitcoin-related companies. Many companies randomly add Bitcoin to their reserves.
Potential Market Risks and Dynamic Analysis
Laura: I noticed a tweet mentioning that these companies might play a core role in some future collapse, similar to the situation with GBTC or other similar stocks. We discussed this as well, feeling that this scenario may only happen if these companies can borrow using their assets as collateral. Of course, other factors are at play, like Microstrategy potentially having better loan terms, while some other companies may take more aggressive strategies on the risk curve, facing greater downside risks during market volatility.
In other words, if there are lenders willing to accept these assets as collateral, this could be a way for risk to explode. At the same time, this situation could trigger a cascading effect. For example, if Bitcoin prices drop for some reason, some companies with poorer financing conditions might be forced to sell assets, further exacerbating the chain reaction in the market. These are just some of my thoughts, but it is indeed interesting to see so many people discussing this issue. From what I currently understand, it seems these assets cannot yet be used as collateral for loans. However, I've heard that JP Morgan now allows borrowing against Bitcoin ETFs as collateral, which is interesting. Although JP Morgan's CEO Jamie Dimon has always opposed Bitcoin, it is clear that his company does not mind profiting from it.
Haseeb: However, things get complicated when it comes to borrowing, right? The loan-to-value ratio (LTV) should be relatively low.
Tarun: Yes, LTV is a key factor. I mean, almost all other brokers offer similar services, with a few exceptions.
ETFs can indeed serve as collateral. When you are trading, brokers typically provide some form of margin loan. I think JP Morgan's approach in this regard is relatively conservative. Of course, I can borrow through Microstrategy, but the loan-to-value ratio isn't particularly high. However, most brokers will offer similar services.
Laura: Oh, I see. So do you think this explains why some say it could become the future GBTC?
Haseeb: I feel that market crashes typically do not occur over issues everyone is focused on. There is some truth to this statement. Typically, risk points tend to be hidden deeper.
Tarun: I think the failure mechanisms of these companies might resemble this situation: If a company is included in the S&P 500 index, all ETFs tied to it would be forced to buy its stock. However, if the Bitcoin price drops significantly before the next rebalancing, that company might be excluded from the index due to debt issues. The problem is that when a company is included in the S&P 500 index, the market generally assumes its stock value will rise, allowing the company to issue debt at a lower cost. But if crypto assets drop significantly before the next index rebalancing, the company may find itself in trouble.
Haseeb: Additionally, this debt usually does not have claims for conversion rights, meaning creditors cannot recover losses through bankruptcy proceedings.
Michael Saylor's Market Influence
Haseeb: So far, I still don't fully understand how Michael Saylor does it, but his ability to acquire capital is indeed impressive. From the current situation, market crashes won't be triggered by Saylor but rather by others. If a market crash does occur, such as Bitcoin prices dropping to $50,000 or $40,000 and stagnating for a long time, Saylor might amplify the downward pressure on the market, but he won't be the initial trigger. Saylor's strategy may worsen the situation during market downturns, but during upswings, he can promote market development by increasing the periodic impact of assets. This dual nature of the strategy means that if the market declines, it will be more challenging to get out of the predicament.
Robert: However, I think the next round of market upswings will be a great opportunity. This is undoubtedly good news for Saylor.
Tarun: I greatly admire Saylor for being able to accomplish this. This is also why I find it confusing that many are trying to imitate his trend. We should recognize how bold and crazy what Saylor has done is. I don't think everyone needs to replicate his model. Imitation is indeed a form of recognition, but it is more like a 'burning money' kind of recognition. You know, this imitation might not be wise.
I don't think everyone shares Saylor's Bitcoin vision. When you talk to people in these companies, they are more focused on how to make profits rather than having profound thoughts on macroeconomics or an obsession with how to survive in a market crash like Saylor does.
Haseeb: I completely agree. Saylor is indeed a unique figure, and his strategy and influence remind one of a mafia boss. People like him may never appear again.
Tarun: I think the key is not that there will never be another person like Saylor, but that the rules of the market game will change in the future.
Haseeb: That's right; those trying to be the 'next Saylor' shouldn't actually expect returns like his. Saylor has a substantial amount of Microstrategy stock that allows him to take on greater risks. Those so-called 'next Microstrategy' individuals are more like mercenaries who do not share the same long-term interests as Saylor. They should focus on optimizing the financial strategies Saylor invented, rather than simply replicating his model. After all, Saylor is essentially a 'financial engineer,' and his returns should be based on his contributions to financial engineering, rather than solely relying on the value of underlying assets. Therefore, I believe the future market will move in this direction.
Tarun: However, I find it difficult to get excited about these imitators. As it stands, the market is not sustainable for them. I hope I am wrong in my judgment and that there will be 500 such companies in the future, but that seems unrealistic.
Discussion on Market Trends
Haseeb: There is a project called Plasma, which is reportedly related to Tether's stablecoin chain. Now there are many similar projects claiming they can natively issue tokens and have no transaction fees on-chain. The idea is that this model should be more advantageous than Tron, which has transaction fees, while these projects have no fees and can promote stablecoin payments.
Plasma recently conducted an initial token issuance through a platform called Sonar, achieving a valuation of $500 million. They raised $50 million by selling 10% of Plasma's total supply. These funds were deposited into a liquidity treasury, while demand reached $500 million within seconds. The top ten wallets held 38% of the total supply, and the top 17 wallets held 50%. One wallet even deposited $50 million alone. During the entire process, there was also a 'gas war,' with reports of someone spending $100,000 in fees to ensure participation with $10 million USDC.
Tarun: I find it interesting that there seems to be a surge in initial token offerings whenever Trump is in office. For example, 2017 was a typical case.
Regarding Sonar, Kobe mentioned that when they initially designed Echo, investors felt unhappy about the need for recognition and lack of control in the traditional investment group model. I find this very interesting, as I mentioned in my book, early models like DAOs (Decentralized Autonomous Organizations) raised significant funds, but after the funds entered the smart contracts, the teams found themselves lacking effective tools to manage those funds. At that time, there was even no secure way for investors to withdraw funds, leading to issues like hacking. Later, we saw some improvements, such as tools developed by Taylor Monahan to help users who lost funds due to phishing or scams. And now, platforms like Sonar represent a more mature version. I believe this reflects a long-term development trajectory. Looking back at the internet bubble period, many startups went public early, while today's companies tend to delay their IPOs. Now, through this new method, ordinary investors can get involved in projects earlier. I admit this model carries risks, requiring enhanced investor education and possibly modifications to the U.S. accredited investor laws. But from a historical and market change perspective, I do believe similar models will become increasingly common, although they may not be exactly the same.
