Strike Bitcoin Line Of Credit: What It Is & How I Use It

[0:03] Yo, what is going on Bitcoin? I am back
[0:07] with another product announcement. We
[0:09] have begun to officially roll out our
[0:11] Bitcoin line of credit product at
[0:13] Strike. This is our new Bitcoin credit
[0:16] product designed specifically to help
[0:18] you effortlessly live on Bitcoin. Make
[0:21] Bitcoin more a part of your financial
[0:24] life. As a company, we pride ourselves
[0:26] on transparency and customer focus. And
[0:29] so, anytime we launch anything, you'll
[0:31] get a video from me reviewing the
[0:33] problem we saw in the market, the
[0:34] solution we put together for you guys,
[0:37] and how we use the product ourselves.
[0:39] I'm a customer of all of our products,
[0:41] and I want to show you guys how I use
[0:43] this product. So, without further ado,
[0:45] Strike Bitcoin line of credit, living on
[0:48] Bitcoin, hoddle Bitcoin, short fiat, and
[0:51] never sell a sat. Okay, what's the
[0:53] problem that we set out to solve here?
[0:55] Well, I think you guys are all going to
[0:56] be able to relate to this one. It's
[0:57] having to sell the winner. It's having
[0:59] to sell Bitcoin, or never being able to
[1:02] stack any Bitcoin at all. So, you guys
[1:05] know what I'm talking about. First of
[1:06] all, every Bitcoin sale triggers a
[1:08] taxable event, which is brutal for a few
[1:10] reasons. One, taxes are expensive here
[1:12] in the United States of America, and
[1:14] two, you have to forfeit all of the
[1:16] upside from the Bitcoin, right? So,
[1:19] Bitcoin's the best performing asset
[1:20] ever. Selling it to fund rent, or
[1:22] selling it to fund a car payment, or
[1:23] selling it to pay back a friend, it's
[1:25] brutal. Imagine what those sats would be
[1:27] worth in 5 years. We've all been there.
[1:30] The other problem is when you do buy
[1:32] Bitcoin, it's only with what's left
[1:33] after your expenses.
[1:35] So, you believe in Bitcoin with
[1:37] everything that you have, but you're
[1:40] investing with scraps. It's really hard
[1:42] to come across a windfall of cash,
[1:44] whether you you sell a company, or you
[1:46] get a massive bonus, or you win the
[1:47] lottery. You have to come across a rare
[1:50] life event in order to build a really
[1:52] big Bitcoin position, and be in the
[1:54] market long enough to build a Bitcoin
[1:56] base that you're really proud of. That's
[1:57] absolutely an issue I myself have faced
[2:00] and I know many other Bitcoiners have.
[2:02] The last one is the existing Bitcoin
[2:04] credit products in the market. Almost
[2:06] all the Bitcoin credit products are
[2:07] 12-month loans. So, there's these fixed
[2:09] duration loans, which are really, really
[2:12] good. Strike offers them for a large
[2:14] lump sum payments. You need to put a
[2:15] down payment on a house. You need to
[2:17] finance your wedding. Some massive
[2:19] event, some massive payment that you
[2:21] want to finance over 12 months
[2:22] collateralized by your Bitcoin. That
[2:25] makes perfect sense. I use that product
[2:27] as well, but it's not necessarily good
[2:30] to pay for your groceries in April, to
[2:32] finance your car payment in June, to
[2:34] make sure that your HOA or your mortgage
[2:36] is covered in July. For living on
[2:39] Bitcoin, for that you need a revolving
[2:42] line of credit. So, that is the problem.
[2:44] And our customers were the ones that
[2:46] identified this right away with me. So,
[2:49] this is a Reddit post from TJ78492.
[2:53] Feature request, line of credit that
[2:54] works with bill pay, with Strike's bill
[2:56] pay feature.
[2:57] That's the holy grail of living on zero.
[3:00] I want to pay my bills using a
[3:01] margin-like line of credit and have my
[3:04] direct deposit pay it off and/or buy
[3:07] Bitcoin. Loans are cool, but they're
[3:09] clunky. Month-to-month, I just want to
[3:11] borrow enough dollars until my check
[3:13] comes so that I'm always invested in
[3:15] Bitcoin. And that's exactly the idea.
[3:18] That's it right there. This tweet from
[3:21] New York HODL, I want to pay my bills
[3:23] through the line of credit. I want to
[3:25] keep my Bitcoin. And so, as I started to
[3:27] tease this product, as I started to
[3:29] mention that it was improving my life so
[3:31] drastically, we started to see tweets
[3:34] and customer support tickets flying in.
[3:36] We want the line of credit. We want the
[3:37] line of credit. We want the block, the
[3:39] Bitcoin line of credit. And so, the cost
[3:43] again, it's really simple. I've shared a
[3:44] story personally on many podcasts. I
[3:46] bought a painting for six Bitcoin over a
[3:49] decade ago. Obviously, I regret that.
[3:52] Obviously, that was stupid. But more
[3:54] practically, sometimes you got to sell
[3:56] Bitcoin for rent. Sometimes you got to
[3:57] sell Bitcoin for tax bills. Sometimes
[3:59] you got to sell Bitcoin in bear markets
[4:00] at the lows when you know in your heart
[4:03] and your mind you don't want to and you
[4:05] shouldn't, but you don't have a choice.
[4:07] You don't have a choice because life
[4:08] costs money. Every single Bitcoiner has
[4:11] this story and it's not because they
[4:13] don't believe in Bitcoin, it's not
[4:14] because they're wrong about Bitcoin.
[4:16] It's just because they don't have a way,
[4:17] they don't have a product, no one's
[4:19] built the experience to live without
[4:22] having to sell it. So, the insight for
[4:24] the product is really simple.
[4:26] What if you never had to sell?
[4:28] What if you could live your life with
[4:30] borrowed fiat while your Bitcoin stayed
[4:32] untouched compounding over time
[4:35] appreciating against the very fiat
[4:37] currency that you are spending? What if
[4:39] you can short fiat, long Bitcoin and
[4:41] never sell a sat? Can we put together a
[4:44] product that gives you that opportunity?
[4:46] And the philosophy is Gresham's law,
[4:48] guys. Bad money drives out good money.
[4:51] You spend the money that constantly
[4:52] loses value by design. You hoard the
[4:54] money that constantly gains value by
[4:56] design. And in 2026, that means borrowed
[5:00] fiat is spent and sats are saved.
[5:03] Period. It doesn't matter where you are.
[5:05] If you're in the worst emerging market
[5:06] in the world or if you're in Manhattan,
[5:08] we're all going through currency
[5:09] debasement, we're all going through
[5:10] inflation and you hoard the scarce thing
[5:13] and you spend the abundant thing. And in
[5:15] America, in my life, that means you
[5:18] spend fiat, you spend the dollar, which
[5:19] is unlimited in supply, they make more
[5:21] of it every single year and it's
[5:22] inflationary by nature and you keep the
[5:24] Bitcoin, which is fixed in supply, it's
[5:26] the hardest money ever and it's scarce
[5:29] by nature, by design.
[5:32] So, the math, the only real question
[5:34] that matters when thinking about
[5:36] building this product, when I was
[5:37] thinking about myself and implementing
[5:39] the strategy for me, the only question
[5:41] that matters is does Bitcoin beat your
[5:43] borrowing costs? Borrowing capital is
[5:45] never, I mean, outside of when central
[5:47] banks weirdly had interest rates at 0%.
[5:50] That was crazy. But theoretically,
[5:52] borrowing money is never going to be
[5:54] free. There's going to be a cost to
[5:56] borrowing money. The question is, the
[5:58] math is,
[5:59] can Bitcoin outperform your borrowing
[6:01] cost? So here I have the borrowing cost
[6:03] at 13% APR, and the math in this slide
[6:06] is based on 50K a year in expenses. And
[6:09] obviously, if Bitcoin's annual growth is
[6:11] 0%, then not only is selling your
[6:14] Bitcoin a winning strategy, but you
[6:15] probably shouldn't be buying any
[6:17] Bitcoin. I don't know why you're a
[6:18] customer of Strike. I don't know why
[6:19] you're following me. I don't even know
[6:21] why you're here. If you think Bitcoin's
[6:23] never going to grow and isn't going to
[6:25] work, then yes, the strategy doesn't
[6:26] work. If Bitcoin's compounding at 13% on
[6:29] average, well then you're break even.
[6:31] It's the equivalent of losing 13% of
[6:34] upside every year. This actually doesn't
[6:36] calculate taxes, so it's selling would
[6:38] be worse if factoring in the taxes, but
[6:41] nonetheless, 13% would break even at a
[6:43] 13% APR. But the point is, anything
[6:46] above that, if Bitcoin's a 30 Kager
[6:48] asset, a 50 Kager asset, or over the
[6:51] last decade historically, it's been an
[6:52] 80 compound annual growth rate asset,
[6:55] then the difference between your
[6:57] borrowing cost and the performance of
[6:58] Bitcoin is working for you. It's
[7:00] building that capital base. It's
[7:02] building wealth towards your future
[7:04] home, towards your future kids, towards
[7:06] your future, period. Towards your
[7:08] future, period. And so I hear a lot
[7:11] about how these Bitcoin credit products
[7:12] are expensive, and don't get me wrong.
[7:15] Obviously, my goal is to make them as
[7:16] cheap as we possibly can, but I actually
[7:18] think the point is, can Bitcoin
[7:21] outperform the cost you have to borrow?
[7:23] And in my opinion, I'm bullish. I think
[7:26] unequivocally, yes, over the long test
[7:29] of time. And so, this is the greatest
[7:32] pair trade in history. I have the famous
[7:34] Pierre Rochard and Alan Farrington
[7:36] article quoted at the bottom. Bitcoin is
[7:38] such a pristine asset that its growing
[7:40] value makes it increasingly attractive
[7:42] as collateral against whichever
[7:44] depreciating fiat can be borrowed
[7:46] against it. Pierre Rochard and Alan
[7:48] Farrington, Speculative Attack season 2,
[7:50] 2024.
[7:52] So, we see El Salvador as a nation do
[7:54] this. They have dollar-denominated
[7:56] sovereign bonds. They stack Bitcoin
[7:58] against that. We see Strategy and
[8:00] Michael Saylor do this. We see every
[8:02] Bitcoiner do this to some degree. If you
[8:04] have a mortgage and you own Bitcoin,
[8:06] you're speculatively attacking the
[8:07] dollar by having an outstanding debt
[8:10] item and having capital that isn't going
[8:12] towards paying down the principal, but
[8:14] saving for your future, right? And so,
[8:16] the goal for me in this product, which I
[8:18] initially built for myself and I'm very
[8:20] excited to share with you guys, is can
[8:22] we productize this for everyone? Can we
[8:24] turn everyone into a speculative
[8:26] attacker against fiat? Can everyone
[8:29] build their life around shorting fiat
[8:31] with Bitcoin? And that's what the Strike
[8:34] Block is. That's what the Strike Bitcoin
[8:36] line of credit is. And so, like I
[8:38] mentioned, I built this for me. Um this
[8:41] tweet, it says 15 hours ago in the
[8:43] screenshot. This is actually from a few
[8:45] years ago. Um this is when I announced I
[8:48] officially owned no US dollars, no fiat
[8:50] to my name, okay?
[8:52] I own a few things in my life. I own my
[8:54] house, I own equity in my two companies,
[8:56] which is 21 and Strike, and I own
[8:58] Bitcoin, and that's it. And the logic
[9:00] for me is really simple. I don't want to
[9:02] be storing and saving any of my life's
[9:05] work in a money that's designed to go
[9:07] down forever.
[9:08] That's fiat currency.
[9:10] Conversely, I want to store as much as I
[9:13] possibly can in the money that's
[9:16] designed to appreciate, which is
[9:18] Bitcoin.
[9:19] Okay, so 2 years ago, I embarked on this
[9:21] journey to live my life on Bitcoin and
[9:23] to opt out of fiat entirely. In the
[9:26] beginning, I had to sell Bitcoin. It was
[9:28] the only way for me to live, obviously.
[9:30] Now, selling Bitcoin was better than
[9:31] currency debasement, but it absolutely
[9:33] sucked. Of course, it sucked. And I've
[9:35] sold plenty of Bitcoin at prices I'd be
[9:37] ashamed to even mention, and it was
[9:39] absolutely brutal, okay?
[9:42] I did move to these 12-month loans.
[9:43] Strike launched this product. It was
[9:45] great, but it's really designed for
[9:46] large purchases, okay? Or really large
[9:49] sums of cash if you need it.
[9:51] I did not need a 12-month loan to
[9:53] finance my everyday expenses, okay? I
[9:56] didn't want to pay interest on a large
[9:58] sum of cash. And also, when you open a
[10:00] large sum of cash like that in a loan,
[10:02] what if Bitcoin enters a bear market?
[10:03] Then you got to go grab more collateral.
[10:05] You're looking up what's the margin
[10:06] call? What's the liquidation event? It's
[10:08] just not perfect for a lifestyle of
[10:11] living on my Bitcoin. I wanted a line of
[10:14] credit. I wanted it to be open-ended,
[10:16] always available. I only pay interest on
[10:18] what I actually draw and what I actually
[10:20] use. I hook my direct deposit in my
[10:22] paycheck up to it. That's the dream. And
[10:25] so, the product didn't exist, and we
[10:26] built it. And I built it for me first.
[10:29] And now I'm really, really excited to
[10:30] share it for with you guys. So, what is
[10:32] the product?
[10:33] I've talked about it enough at this
[10:35] point, but you keep the upside. You
[10:37] don't have to sell the Bitcoin. You open
[10:38] a line of credit that draws against the
[10:40] Bitcoin so that you stay long your sats.
[10:43] It is not a taxable event. It does not
[10:45] trigger a taxable event, which is
[10:46] extremely exciting. It's open in
[10:49] seconds, okay? So, there's no credit
[10:51] checks, there's no invasive paperwork. I
[10:53] don't need to scan your eyeball. We
[10:54] don't need to know where you go to
[10:55] college. It's a collateralized line of
[10:58] credit.
[10:59] Transparent pricing. We're starting the
[11:00] pricing at 13% APR. I know some of the
[11:03] feedback we've gotten is that sounds
[11:05] expensive or ludicrous to you guys. I
[11:07] don't believe that's the case. I'll tell
[11:09] you why and I'll show you why in a
[11:10] second. But, all that to say, our goal
[11:12] is not to make this product like super
[11:15] expensive. Our goal is to make it as
[11:18] inclusive and as attractive as we
[11:21] possibly can. And so, we are working on
[11:23] that. I hear some of the feedback, but I
[11:25] believe 13% APR is plenty fine to live
[11:28] the dream Bitcoin life, which which show
[11:30] you guys in a second. And you only get
[11:32] charged on what you draw. So, you can
[11:34] open a line of credit that could go up
[11:37] to a certain amount, but if you don't
[11:38] use it, you don't have to pay for it. It
[11:40] really is the dream product. Real quick,
[11:42] a rollout strategy. This is live today
[11:45] in Massachusetts and in Georgia. These
[11:47] are the two of the markets where you
[11:48] have some really loyal customers that
[11:50] wanted to use the product first.
[11:52] As you As you guys can tell, this
[11:53] product's really personal to me. I
[11:55] really care a lot about the quality of
[11:58] it and making sure it goes well. This is
[11:59] a very unique Bitcoin product. I'm not
[12:01] sure what Strike offers today anyone's
[12:04] ever built before.
[12:05] So, we're rolling it out a bit slower
[12:07] than what we would usually do. This is
[12:09] not something that's going to take us a
[12:10] year. This is not something that's going
[12:11] to take us 6 months. We're going to turn
[12:13] it on in all of the United States very,
[12:15] very soon, and then the rest of the
[12:17] world where we're available. So, I know
[12:20] for some of you it might be frustrating
[12:21] that you can't go into your phone and
[12:23] use it today. Trust me, it's coming.
[12:24] We're talking days or weeks or month. I
[12:27] just want to make sure the rollout is
[12:30] super high quality and it's as perfect
[12:32] as we can possibly make it. But, if you
[12:33] are in Massachusetts and you are in
[12:35] Georgia, you can use it. And if you're
[12:37] dying and itching to get on that beta
[12:39] list, you can just shoot me a DM. I'll
[12:40] see what I can do. Okay? And again, I
[12:43] just want to highlight the difference
[12:45] here. It's very different than a Bitcoin
[12:46] back loan traditionally like a 12-month
[12:48] one. Those you're opening up these large
[12:50] lump sums, and that's what if Bitcoin
[12:52] goes in a bear market? You've drawn all
[12:54] this cash at once. That gets a little
[12:56] dicey. You're paying interest on this
[12:59] fixed lump sum. So, it's definitely more
[13:01] expensive.
[13:02] The principal is due in 12 months, and I
[13:05] used that product, but I use it for
[13:07] larger expenses in my life. Um The
[13:10] Bitcoin back line of credit is almost
[13:12] the exact opposite. You draw only
[13:14] exactly what you need in any time. Like
[13:16] when it's hooked up to your bill pay,
[13:17] you're only spending exactly to the
[13:19] penny what you need to pay to live your
[13:21] life. You're only accruing interest on
[13:24] what you use. There is no due date. You
[13:26] can repay whenever you want. You can
[13:27] have the thing open for years. And it's
[13:30] optimized for living on Bitcoin. Maybe
[13:32] you don't go all 100% like me.
[13:34] Everyone's life is it's their choice and
[13:37] their circumstances, but it's designed
[13:39] to make Bitcoin more a part of your
[13:40] financial life in this dual economy or
[13:43] excuse me, dual currency era that we're
[13:45] living in.
[13:46] Where everyone needs to find scarce
[13:49] assets to hoard and everyone
[13:51] unfortunately needs access to fiat
[13:54] currency to live. We don't live in
[13:56] hyperbitcoinization yet. And so this is
[13:59] the Gresham's law financial account.
[14:02] This is the Bitcoiners dream in my
[14:04] opinion. So the product again, it's a
[14:06] beautifully designed product. It works
[14:08] as expected. Draw when you need, repay
[14:10] when you want. It's open in seconds.
[14:12] Accrues interest only on what you've
[14:14] drawn. There's no due date on the
[14:16] principal. It's it's unbelievable. So a
[14:20] few use cases just to show you the
[14:21] practical like mind-blowingness. Sorry,
[14:24] I'm excited about it. I'm a customer and
[14:26] I love it so much.
[14:28] So one for those that don't know, you
[14:30] can pay your bills on Strike. So when
[14:31] you open a Strike account in the United
[14:32] States, you get an account and routing
[14:34] number. And now your line of credit is
[14:36] like a payment method. So traditionally
[14:38] like I'd mentioned before, I was paying
[14:39] my bills with my Bitcoin balance, which
[14:42] was selling Bitcoin. Strike would take
[14:43] the cash proceeds and pay. So previously
[14:46] you could pay your bills with your cash.
[14:47] You can pay your bills with your
[14:48] Bitcoin. Now you can pay your bills with
[14:50] your line of credit. If I have a $2,000
[14:52] credit card statement that I need to pay
[14:55] or a $1,300 mortgage payment I need to
[14:57] make, when that bill comes into Strike,
[14:59] Strike is extending your line of credit
[15:01] just enough to handle the bill and it's
[15:03] taking care of the bill for you. So you
[15:05] can handle your mortgage, your credit
[15:07] card, your utilities, your energy. Pay
[15:09] any bill through Strike. Only the exact
[15:11] amount owed is drawn down from your line
[15:14] of credit and used to pay the bill and
[15:16] you're never holding idle cash. You're
[15:18] never holding idle fiat that you're
[15:20] long, okay? You can also withdraw cash.
[15:24] So, if you need to get cash in your
[15:25] Chase account, your City account, your
[15:27] Bank of America account, your Wells
[15:28] Fargo account, and hit the ATM,
[15:31] you can open Strike, select your line of
[15:33] credit, you can withdraw cash straight
[15:35] to go go to the ATM, use your line of
[15:38] credit to take cash out. It is an it's
[15:41] an unbelievable product. It acts like a
[15:43] native payment method. It acts like a
[15:45] linked bank account.
[15:48] What about sending money to other people
[15:49] on Strike? So, I use Strike to pay back
[15:51] my friends for dinners we go to or split
[15:53] vacations when I travel with my
[15:55] girlfriend and and our buddies. So, I
[15:58] pay my friends back with my line of
[16:00] credit now. So, when I go, again, it's
[16:01] just another payment method. I can use
[16:03] my Bitcoin, I can use my cash, and now I
[16:05] can use my line of credit, and that even
[16:07] extends to buying Bitcoin itself. So, I
[16:10] have to admit, sometimes when Bitcoin's
[16:12] been in this bear market and the price
[16:14] dips a lot, I turn on an hourly DCA, and
[16:17] I start stacking with my line of credit.
[16:19] I'm like, screw it. Bitcoin's cheap, and
[16:21] until the price rebounds a little bit,
[16:23] I'm going to take a little leverage, I'm
[16:24] going to buy some Bitcoin.
[16:26] Uh and I'm going to use my line of
[16:27] credit. And it's just the product works
[16:30] and feels like magic.
[16:33] And then the last one is just how do you
[16:34] manage it? There's an unbelievably
[16:36] beautiful and intuitive dashboard inside
[16:39] of the app itself, which shows you your
[16:41] line of credit, how much has been drawn,
[16:42] the interest that's accrued daily, and
[16:45] then you can automate how you handle the
[16:47] line of credit itself. So, for example,
[16:49] I have my direct deposit that goes into
[16:50] Strike, and my direct deposit will be
[16:53] dynamically set up to handle paying down
[16:56] my line of credit. So, in the slide I
[16:59] have, your paycheck arrives, 50% goes
[17:02] towards stacking more sat sats, 50% goes
[17:04] towards paying down your line of credit
[17:06] principal, and you're able to
[17:08] dynamically manage depending on your LTV
[17:10] and what risk you want, which I'll get
[17:13] into in a second. You can dynamically
[17:15] say, "Hey, I want to pay down my line of
[17:16] credit with my cash. I want to pay down
[17:18] my line of credit with my Bitcoin. I
[17:19] want to pay down my line of credit with
[17:21] the paycheck that is coming in cuz I
[17:23] have my direct deposit set up or I don't
[17:25] even want to touch my line of credit at
[17:27] all. I want to let it ride right now.
[17:29] It's super super intuitive product."
[17:31] Okay.
[17:32] I know this video is going to be a
[17:33] little bit long. Um so, if all you
[17:35] wanted to do was learn about the product
[17:37] announcement, you can say goodbye to me
[17:39] for now. But, I think the obvious
[17:41] question that I want to address that
[17:43] everyone's going to ask is, "Well, what
[17:45] about a bear market? What about when
[17:46] Bitcoin crashes? Isn't this just super
[17:48] irresponsible leverage? What do you mean
[17:50] I never have to sell Bitcoin?" Uh and
[17:53] obviously, I built the product for
[17:55] myself and I asked myself, "What's the
[17:58] most responsible way to use this tool?"
[18:01] Cuz Bitcoin does crash. It goes through
[18:02] multi-year bear markets. People's income
[18:04] changes. All sorts of variables. And I
[18:06] wanted to know for myself. So, over the
[18:09] weekend recently, so a few days ago, I
[18:11] actually built a tool for myself that I
[18:14] just put on the internet. It's at
[18:15] liveonbitcoin.jackmallers.com
[18:18] and it helps showcase how I use the
[18:21] Strike Bitcoin line of credit in what I
[18:23] believe is an incredibly responsible
[18:26] way. So, I'm going to click on it and
[18:27] I'm just going to walk you guys through
[18:29] it. Again, a little bit of a long video,
[18:30] but I think it's really useful. So,
[18:33] first you're going to get a modal. This
[18:34] is not financial advice, okay? I built
[18:37] these tools and these products cuz I
[18:39] believe Bitcoin's the best money ever
[18:40] and I believe Bitcoin is the only
[18:42] financial tool that we all have access
[18:44] to to help deliver financial
[18:46] independence and prosperity for
[18:47] everybody. And I think in this currency
[18:49] debasement era, this could be a very
[18:51] empowering tool if you're in a position
[18:53] to use it responsibly. So, I'm not your
[18:55] financial advisor. This is not financial
[18:57] advice. It's just education and a way
[18:59] for me to express my ideas that I think
[19:02] could potentially be valuable. So, the
[19:04] tool is very self-explanatory. Um it's
[19:07] pretty straightforward, but I do want to
[19:08] walk you through it. So, on the left,
[19:11] you'll see some variable inputs. So, how
[19:13] much Bitcoin are you holding? Let's say
[19:15] you got one Bitcoin. This is pulling in
[19:17] the real-time price, okay? It's rounded
[19:19] to the nearest thousand
[19:21] just for easy math and round numbers, so
[19:24] it looks better. Uh what's the monthly
[19:26] income that you're bringing in? What are
[19:28] your monthly expend expenses that you're
[19:30] spending? What's Bitcoin's annual growth
[19:32] rate? You could have it at 50%, 30%. You
[19:35] could put it at zero if you want. You
[19:36] could put it in negative if you want.
[19:38] We'll put it at 50% for now. We'll get
[19:40] back to that in a second. Um inflation
[19:42] rate. What about inflation at the Fed's
[19:45] 2% target? 5%? 10%? Are you getting
[19:48] Miami beachfront real estate? 20%? And
[19:50] then your time horizon. How long are you
[19:53] thinking about this strategy for? Okay?
[19:56] Now, what you'll see in the middle here
[19:58] are different strategies. So, you'll see
[20:00] max leverage, dangerous. This is I
[20:03] wouldn't recommend this. You'll see
[20:04] smart block, sell to live, and owning no
[20:07] Bitcoin at all. Okay? Now, what is max
[20:10] leverage? Max leverage is exactly what
[20:11] it sounds like.
[20:12] You use the line of credit for all your
[20:14] living expenses. So, at $5,000 of
[20:16] monthly expenses, that means you're
[20:18] spending $60,000 a year. That means over
[20:21] a 5-year duration, you're spending 300
[20:22] grand. And you're using the line of
[20:24] credit for all of that $300,000.
[20:27] All your paychecks are go going towards
[20:29] stacking sats. You are piling on the
[20:31] ultimate leverage. Now, at the bottom
[20:34] here, I built what's called a stress
[20:35] test, which is what if Bitcoin crashes
[20:37] 80%? So, what if Bitcoin does go through
[20:40] a bear market? What if it goes through
[20:41] the worst crash Bitcoin's ever
[20:43] experienced in its history? Am I going
[20:45] to be okay? And the max leverage, this
[20:47] will show would you be in a margin call?
[20:49] Would you get liquidated? Now, actually,
[20:52] if Bitcoin is compounding at 50% a year
[20:55] for 5 years and you do max leverage,
[20:57] bringing in 8 grand a month, spending
[20:59] only 5,000, you actually would barely
[21:01] survive. You wouldn't get mar You'd be
[21:03] in a margin call. You would You wouldn't
[21:05] get liquidated. But, if I drag the 5
[21:08] years here in the bottom left and I just
[21:09] bring it to four, you see that max
[21:11] leverage you're getting blown out. And
[21:13] that's because, obviously, it's pretty
[21:15] logical. Bitcoin's not existing at a 50%
[21:18] CAGR for enough years to build up the
[21:20] balance for you to survive a large
[21:22] crash. That's too much leverage. Your
[21:25] LTV is in a dangerous spot. Does that
[21:28] make sense? Now,
[21:30] the next logical question is, "Well,
[21:31] what is the smart strategy?" This is
[21:33] just a math problem. Okay? What is a
[21:36] reasonable way to avoid having to panic
[21:40] during stress test, during bear markets,
[21:42] but living on a line of credit backed by
[21:45] Bitcoin and stacking sats and building
[21:48] wealth for your future. And I call it
[21:50] smart block, okay? The idea is very
[21:53] simple. You want to target an LTV around
[21:55] 15% because that LTV can survive
[21:58] multi-year bear markets, the craziest
[22:01] crashes Bitcoin has ever seen. It's a
[22:03] really, really healthy approach to the
[22:05] product. And if you see the smart block
[22:07] down here in the stress test, I can turn
[22:09] Bitcoin's annual growth rate, I'll put
[22:11] it at zero, and the smart block is fine.
[22:14] Or I'll put it at zero and I'll say that
[22:16] Bitcoin goes down 80% in a year, and the
[22:19] smart block is fine. Because what the
[22:20] smart block does is it says, "Hey, if
[22:22] your LTV is getting too high for our
[22:25] liking, then
[22:27] part of your paycheck's going to go
[22:29] towards paying down the principal to
[22:30] keep the LTV intact. And so, you're not
[22:33] just going to degenerately long Bitcoin
[22:34] all the time. It depends. What's the
[22:37] LTV? What's the price of Bitcoin? What's
[22:38] the risk? And so, I actually built out
[22:43] a tab to go into smart block
[22:44] specifically. So, let's take a look.
[22:47] So, it's going to ask you really basic
[22:49] questions. What's your monthly income?
[22:50] So, we have 8,000. And what's your
[22:52] monthly expenses? We have 5,000. Cuz the
[22:55] goal, firstly, is how productive are
[22:57] you? Meaning, how much are you making
[22:59] relative to how much are are spending?
[23:00] Bitcoiners, by definition, we're net
[23:02] producers because we have excess cash
[23:04] after we consume from the world, right?
[23:07] We are earning more than we're spending.
[23:09] And obviously, if I were to take my
[23:11] monthly income here and change it to
[23:13] $1,000, I'm not viable for this product
[23:16] because my monthly cash flow is
[23:18] negative. I'm not productive. I am
[23:20] spending more than I'm earning. So, I've
[23:22] always said in all my podcasts, if you
[23:24] want to build wealth, the first thing
[23:25] you have to do is be productive. You
[23:27] either have to find a way to make more
[23:28] money or find a way to consume less
[23:30] stuff. It's very, very simple. So, let's
[23:33] just assume that 8,000 bringing in,
[23:36] spending 5,000, that's an income to
[23:38] expense ratio of 1.6. That's pretty
[23:40] healthy.
[23:42] Then it'll recommend
[23:44] a initial Bitcoin balance to
[23:46] collateralize your line of credit with.
[23:48] And this recommendation is really
[23:49] simple. It's targeting 5% LTV on day
[23:52] one. Okay? So, obviously, you can open
[23:54] the line of credit with a smaller
[23:56] balance. It's a little bit more dicey if
[23:58] Bitcoin gets into an 80% crash. And it's
[24:01] way more ideal if you have more Bitcoin
[24:03] cuz then your LTV's even lower. You'll
[24:04] be stacking more sats.
[24:06] But then it has this monthly playbook
[24:08] here. So, let's assume we've got 1.47
[24:10] Bitcoin that we're bringing in $8,000 a
[24:13] month in income for our family or our
[24:15] business, and we are spending $5,000 a
[24:19] month. You can drag the slider and walk
[24:22] through the month to month. So, you can
[24:24] see we started a Bitcoin price of
[24:26] $69,503.
[24:29] And then eventually,
[24:31] here, pay down triggered. Our LTV is
[24:34] slightly over 15%. And so, then it says,
[24:37] "Okay, 2% of your paycheck could should
[24:39] go towards paying down the principal."
[24:41] And the other 98% goes towards buying
[24:43] Bitcoin. And then as you drag this and
[24:45] you see the Bitcoin price, it's
[24:47] dynamically saying, "Oh, you should
[24:48] split your paycheck between stacking
[24:50] sats
[24:51] and buying Bitcoin." Or at times, it's
[24:54] "You're good. You're like super healthy.
[24:56] You can just take your whole paycheck
[24:57] and you can stack sats. So, obviously if
[24:59] Bitcoin goes to 200k tomorrow, your
[25:01] LTV's great. You can stack sats. If the
[25:04] price dips a little bit, if your income
[25:05] changes, if you need to spend a little
[25:07] bit more against your line of credit
[25:09] because it was an expensive month,
[25:12] well, then maybe you just need to do a
[25:13] little bit more rebalancing. But, if you
[25:15] scroll down and you see the results, I
[25:17] mean, a smart block versus just saving a
[25:20] surplus, I mean, it you're ending up
[25:23] with way more Bitcoin. This is the
[25:25] speculative attack against Bitcoin. This
[25:28] is the individual Michael Saylor,
[25:30] MicroStrategy. Like, this is this is it.
[25:33] This is the product I've always dreamed
[25:34] of. This is how I live without owning
[25:36] dollars, drawing against a dynamic line
[25:38] of credit. And again, if I go back and
[25:41] you just want to do some testing and
[25:43] please, play with this. It's it's a tool
[25:45] for the public. These are free ideas.
[25:47] But, if you want to click around and
[25:49] play with like where would the smart
[25:50] block find itself in trouble, um, you
[25:53] know, obviously there's a few ways you
[25:55] can solve this problem. Like, if you
[25:56] have a lot more Bitcoin, let's say you
[25:58] have 100 Bitcoin, well, sure. Then, none
[26:00] of these strategies are a problem if
[26:02] you're only spending five grand a month
[26:03] and you've got 100 Bitcoin sitting
[26:05] around. But, if that's not the case, you
[26:07] can drag these around, play with the
[26:10] tool. I even have a bear market phase
[26:12] here, so you can turn this on and you
[26:14] can say, "Hey, Bitcoin's in a bear
[26:16] period for two years at -50%,
[26:20] right? Like, what's
[26:23] what's the outcome here?" And obviously,
[26:26] max leverage is going to be in a world
[26:28] of pain. But, the smart block is going
[26:30] to be fine. The smart block is going to
[26:32] be fine.
[26:33] So, it even will model out what Bitcoin
[26:36] usually does, which is it goes through
[26:37] these periodic bear markets and then it
[26:40] snaps back up and averages something
[26:42] like 50% CAGR.
[26:45] So, anyways, uh, this is how I use the
[26:48] tool myself.
[26:50] Um, so I have my paychecks coming into
[26:51] strike, and I'm just dynamically able to
[26:55] keep an LTV that allows me to be
[26:58] comfortable and sleep well at night.
[27:00] Now, obviously, if Bitcoin goes down
[27:01] 99.9%
[27:04] then
[27:05] not only is my line of credit need to be
[27:08] addressed, but my whole life does
[27:10] because my life's built around Bitcoin,
[27:13] and if Bitcoin doesn't work, then I'm
[27:15] going to need a job doing something
[27:16] else. But, the baseline assumption is do
[27:18] you think over a course of period of
[27:20] time Bitcoin can actually perform more
[27:23] than your borrowing cost that this whole
[27:24] Bitcoin thing is going to work? And if
[27:25] you're a Bitcoiner and you believe that,
[27:27] I think this is a really empowering tool
[27:29] given it meets your criteria, the life
[27:32] you want to live.
[27:34] So, anyways, with that um, this is the
[27:37] Bitcoiner's life hack uh that at least I
[27:39] built for myself, and we're really
[27:41] excited to roll it out. Obviously, it's
[27:42] not going to be for everyone, but there
[27:44] are businesses out there like Bitcoin
[27:46] miners. I think would love this product.
[27:48] They mine Bitcoin, they need to cover
[27:50] their their bills on a monthly basis.
[27:51] They probably want a line of credit. Uh,
[27:54] I think there's plenty of families that
[27:55] can capitalize their future on an
[27:58] account like this. So, we're really
[28:00] excited to begin rolling it out. As you
[28:02] guys have questions and comments and
[28:03] concerns, please let us know. Um, I
[28:05] listen to all of the feedback, and my
[28:07] dream is to get everyone in the world
[28:10] benefiting from Bitcoin, and I think a
[28:12] line of credit like this that has bill
[28:13] pay and a direct deposit is a huge step.
[28:15] So, thank you guys, and thank you to all
[28:17] the customers for the support, and I'll
[28:18] be on the lookout for the feedback as we
[28:20] continue to roll this out. Take care.