The ETH Treasury Race Has Officially Begun | Sam Tabar, CEO of Bit Digital (2nd Largest)

Sam:
[0:00] I remember having a private meeting with Michael Saylor last year or a year and a half ago. He probably won't be too happy about me admitting this and what was the content of the conversation. We were in the boardroom together and he was telling me how Bitcoin mining was a shit business and that I should really think about just being a Bitcoin treasury business. And I said, well, that's interesting. I kind of agree with you halfway, but I'm thinking about doing that.

Sam:
[0:28] But for Ethereum, you gave me the dirtiest look. The conversation kind of died. It was a pretty bad vibe in that room.

David:
[0:41] Bankless Nation, we are here with Sam Tabar. He is the CEO of BitDigital. BitDigital is one of the ETH treasury companies that has recently come online and is already one of the largest ETH treasury companies among publicly traded companies. Sam, welcome to Bankless.

Sam:
[0:56] Thanks for having me.

David:
[0:57] Sam, why ETH?

Sam:
[0:59] Look, I don't think there is any second best when it comes to rewriting the financial system. Bitcoin doesn't have the ability of smart contracts to exchange value without a middleman. And there's a lot of reasons why Ethereum didn't really have its time and its sun in the day because there was a lot of the era of Gary Gensler was a really dark time for Ethereum. There are many developers, friends of mine who didn't, you know, they were wondering if they were going to go to jail the next day, if they were working on a project that Gary Gensler would pursue them on. That era is now done. And you're seeing a lot of congressional acts, such as the Genius Act that did a lot of, clarified a lot of rules about stable coins being used as payment instruments. And as we all know, more than half of stable coins are built on Ethereum. And we're seeing also upcoming acts like the Clarity Act that's being passed, hopefully, by Congress. And you're just seeing a lot of this regulatory clarity right now in Ethereum. And, you know, it's ETH that powers the most widely used blockchain in the world. Its utility is Ethereum.

David:
[2:14] Irrefutable.

Sam:
[2:16] And frankly, I really do believe, I think it was Ryan that mentioned, that posted a tweet that really resonated with me. I think it was your tweet, Ryan, where you said that if Ethereum and Bitcoin were launched on the same day, we probably would never have heard of Bitcoin right now. And I completely believe that. That was a real excellent post if that was yours.

Sam:
[2:42] So, you know, Ethereum, you know, it was, there was a lot of FUD around it. And, you know, Gary Gensler couldn't even admit whether it was a commodity or a security. And now, you know, we're seeing that Ethereum is now being classified as a commodity, just as Bitcoin. And, you know, Michael Saylor did a really good job marketing Bitcoin, and he brought it really far. And it was a very easy story to tell. And some people would be ashamed to admit it, but I'm not. I am shamelessly, and some of us in the industry are shamelessly copying Michael Saylor's playbook. It does work. There is a reason why that works. I remember having a private meeting with Michael Saylor last year or a year and a half ago. You probably won't be too happy about me admitting this and what was the content of the conversation. We were in the boardroom together and he was telling me how Bitcoin mining was a shit business. And that I should really go into, I should really think about just being a Bitcoin treasury business. And I said, well, that's interesting. I kind of agree with you halfway, but I'm thinking about doing that. But for Ethereum, he gave me the dirtiest look. The conversation kind of died. It was a pretty bad vibe in that room.

Sam:
[4:03] He said, as I was walking away, because the vibes just died, he said, you know, don't do that, because that thing is going to zero. So I was like, if you say so.

David:
[4:15] It's sort of funny, Sam. Actually, just on that really quickly, like, why do you think Michael Saylor has never purchased Ether, the asset? Is that just part of the persona? Do you have to do that if you're Michael Saylor and you're pursuing this strategy? You have to be the biggest, baddest Bitcoin maxi in town?

Sam:
[4:31] Listen, to be successful in anything, in anything, whether it's working out or a business or a podcast, you have to be extreme. That's the formula. The formula to success is you have to just be kind of extreme. You have to be as big as and baddest and outspoken as possible.

David:
[4:50] Grandiose, yeah.

Sam:
[4:51] Yeah. And so I get that. That's what he's doing. He's just being a maxi maxi.

Sam:
[4:58] You know, that's the marketing campaign that he's doing. He can't be measured. If he's measured and if he's, you know, talking about, you know, the grays, the light grays and the dark grays, he's going to just, the marketing message will get lost. He's not talking to an academic audience. He's talking to a retail audience. And the retail audience is, you have to remember this retail audience, they've been holding fiat as a way to basically build up their savings, let alone, I'm not talking about stocks. I'm just talking about fiat for now. And if you look at fiat, that's basically the ultimate shit coin. It's lost basically 97% of its purchasing power since the 70s. And that's a real problem. And so a Bitcoin did solve that issue to a large extent. It has a limited supply. And so on. But it doesn't have utility. And Bitcoin's real competitor is the gold markets. The gold markets is $13 trillion market cap right now. And what is Bitcoin right now? I think $2 or $3 trillion in market cap. And so I do agree with Michael Seller's thesis that Bitcoin is an incredible store of value, that if you hold your savings in fiat, it's not going to end well for you. There is a 100% track record of fiat going down, not up over time.

Sam:
[6:23] And so Bitcoin does truly solve for that. But its main competitor is truly the gold markets. And I tell you what, the gold markets are going to be replaced by Bitcoin, especially when guys like you and me and, you know, millennials and Gen Z, when they become in positions of power to create portfolio construction for family offices and institutions, they would have normalized crypto and they would have normalized Bitcoin. And they would very likely use basically around 5% of the overall portfolio for that particular family office for Bitcoin to hedge inflation bets and not gold, which is what boomers do.

Sam:
[7:06] So generationally, Bitcoin will go up and it will replace the gold markets. And so that's a sure bet. But when it comes to rewriting the financial system, that's Ethereum. That's not Bitcoin. And it has the ability to, as mentioned earlier, to exchange value without an intermediary. And the financial system makes a lot of money creating friction. That is how they make money. The friction being you need a contracts lawyer, you need a banker, you need an escrow agent. Ethereum gets rid of all of that when you're transferring value. That's what I mean by rewriting the financial system.

David:
[7:48] In the wild west of DeFi, stability and innovation are everything, which is why you should check out Frax Finance, the protocol revolutionizing stablecoins, DeFi, and Rolex. The core of Frax Finance is Frax USD, which is backed by BlackRock's institutional biddle fund.

David:
[8:01] Frax designed Frax USD for best-in-class yields across DeFi, T-bills, and carry trade returns all in one. Just head to Frax.com, then stake it to earn some of the best yields in DeFi. Want even more? Bridge your Frax USD over to the Fraxtel Layer 2 for the same yield plus Fraxtel points and explore Fractal's diverse Layer 2 ecosystem with protocols like Curve, Convex, and more, all rewarding early adopters. Frax isn't just a protocol, it's a digital nation, powered by the FXS token and governed by its global community. Acquire FXS through frax.com or your go-to dex, stake it, and help shape Frax Nation's future. Ready to join the forefront of DeFi? Visit frax.com now to start earning with FraxUSD and staked FraxUSD. And for Bankless listeners, you can use frax.com slash r slash bankless when bridging to Fraxel for exclusive Fraxel perks and boosted rewards. Ethereum's Layer 2 universe is exploding with choices. But if you're looking for the best place to park and move your tokens, make your next stop, Unichain. First, liquidity.

David:
[8:57] Unichain hosts the most liquid Uniswap V4 deployment on any Layer 2, giving you deeper pools for flagship pairs like ETH USDC. More liquidity means better prices, less slippage, and smoother swaps, exactly what traders crave. The numbers back it up. Unichain leads all Layer twos in total value locked for Uniswap v4. And it's not just deep, it's fast and fully transparent. Purpose built to be the home base for DeFi and cross-chain liquidity. When it comes to costs, Unichain is a no-brainer. Transaction fees come in about 95% cheaper than Ethereum mainnet, slashing the price of creating or accessing liquidity. Want to stay in the loop on Unichain? Visit unichain.org or follow at Unichain on X for all the updates. Ever wonder how industry-leading companies like Coinbase, Metamask, and Phantom Wallet build products that always stay ahead of market shifts and new token listings?

David:
[9:42] It's because they all use the CoinGecko API, the most reliable and comprehensive crypto data API, backed by a rock-solid 99.9% uptime SLA. Builders, analysts, and businesses rely on CoinGecko for real-time data on 9 million cryptocurrencies across 1,500 exchanges and 200 different networks. It goes beyond crypto prices to access liquidity, OHLCV, DEX data, metadata, NFT floor prices, and more, enabling your team to build and scale powerful products like wallets, oracles, exchanges, AI agents, and DeFi applications without limitations. Onboarding is easy with clear documentation and enterprise-grade support that answers you faster than finality, 24-7 around the clock. Supercharge your product and build with CoinGecko API today. Head to gcko.io slash bankless10 and enter code bankless10 for 10% off any plan. CoinGecko API, crypto's most trusted and reliable data source. Yes.

David:
[10:38] Sam, if Bitcoin is going to replace something like gold, which is what, you know, like 15 to 20 trillion, what's the big number that Ether, Ether asset is going to replace? Like, I mean, we like big numbers. We like benchmarks here. I mean, how, what's the total addressable market for this thing? And how do you view Ether asset itself?

Sam:
[10:57] Look, I think it's 10 times bigger than at least 10 times bigger than the gold markets. It's the entire financial system. The entire financial system is kind of hard to put a number on, but it's certainly bigger than the gold markets. And so it's really almost infinite. And it's just now that Ethereum is coming out of the dark ages. And that's why you're seeing a lot of these ETH treasury trades, because there's a formal classification of Ethereum becoming a commodity and so on. And so you're going to finally see Ethereum's valuation go up. But to answer your question, Ryan, it's very difficult to know what the total value is of the entire financial system. But a lot of bank functions, a lot of contract lawyers, a lot of escrow agents, a lot of friction that's not necessary, that can be completely removed using Solidity,

Sam:
[11:52] using smart contracts, using atomic swaps in Ethereum. That's all going to happen. That's my thesis.

David:
[12:00] Okay. So you mentioned the key here is you got to do anything big to be successful. You got to be a little bit extreme. Okay. So let's measure how extreme you are. And how extreme BitDigital is right now, which is, I can measure this, quantify this by the amount of ETH you own. So how much does BitDigital own right now? And where does that place you in the ranking of ETH treasury companies?

Sam:
[12:23] Well, I know there are a lot of ETH treasury companies coming out, but I think we're behind Joe's SBET. I just had a chat with him a week and a half ago. You know, right now they're ranked ahead of us, but this race just started. And there's going to be some friendly competition. We're just over 100,000 now. That was our first salvo.

Sam:
[12:42] And we're currently cooking on the next tranche. And so it's going to be a race. And I'm a very competitive person. And this actually started, frankly, years ago. We actually started putting Ethereum in our balance sheet. And we have a real business, by the way. We didn't just grab a shell and do this play. We had a Bitcoin mining business. We even have a data center business. that's one of our subsidiaries is an AI infrastructure company that's doing extremely well with over $100 million of contracted revenues per year and growing exponentially. So we actually have a real business. We have a profitable Bitcoin mining business that I declared that we're no longer going to invest in. The infrastructure business for AI is different, but we actually have real businesses in our company. We didn't just grab a shell. So that's a huge difference between us and the others. No one else has that. Nobody else. They are just grabbing shell companies and pumping that up. We actually have a real, truly real business with locked up revenues that last for years. These contracts that we have are years. So kind of different.

David:
[14:00] So with all of the Ether treasury companies out there, Sharpling Gaming, they're coming in at the number one spot with about 205,000 ETH. And then we have BitDigital, your company at 100,000 ETH. And then third place, very far in the third with just 15,000 ETH. That's that, BTCS Inc. So like you talked about this is, you guys are frenemies, you know, friendly competition. You're very competitive. I'm assuming what that means is that you want to see your company to be the number one spot, the number one ETH holder treasury company. When you see other ETH companies like coming online or raising more money or, you know, otherwise doing well, are you like...

David:
[14:38] How do you think about these things? Is that like, oh,

David:
[14:41] There's more energy happening outside of my company? Or are you thinking in like, oh, there's more momentum going into ETH in the

David:
[14:49] first place, which is going to make my job easier? So how does just this sheer number of ETH treasury companies online making your job harder or is it making your job easier?

Sam:
[14:58] It's a weird, I love the question. So there's this weird tension with there's more Ethereum, there's more of these plays. So they're going to buy Ethereum. So the price of Ethereum is going to go up. So that's nice. That's good. And then from a financial perspective, it comforts me. But from a mindshare perspective, it doesn't, right? Because you could only have so many of these ETH trades. You see it right now with respect to Bitcoin, the Bitcoin capital markets proxy of like these trades is saturated. So you can't have like more than 20 ETH treasury trades because then the mindshare pie just doesn't work. So that's why it's very important to be aggressive just to get that mindshare. But at the same time, all this friendly competition is good for the Ethereum ecosystem and the price and the awareness. And, you know, again, it's friendly competition. I've known Joe for a long time. I co-founded a company called Fluidity. It was an Ethereum company and the team built AirSwap. And then in 2020, we sold the company to Joe Lubin. Relationship goes back many years. And so, you know, the story, the journey in Ethereum continues.

David:
[16:18] Yeah, it's really a matter of like, I think when people are valuing these ETH treasury companies are kind of like sizing everybody up, like, you know, it's like, what are the different skills on the, you know, the Avengers that have assembled here, the ETH treasury Avengers here. And we've already mentioned Joe Lubin and Sharplink Gaming. David mentioned another firm, BTCS. They've got, I think they announced this week, another $225 million raise that has not yet converted into a buy, but they're trying to get more funds in order to buy ETH. So those are some competitors. And also a couple of weeks ago, Tom Lee from Wall Street entered the fray here. And I've been watching Tom Lee on Wall Street for like, I don't know, the past like 10 years talking about crypto. He's got Bitmine Immersion Technologies and a $250 million buy. It's really a race to the first treasury firm to a billion dollars worth of ETH. I've also saw this week, Game. This is another company that wasn't even on my radar. A hundred million that they're trying to buy in ETH.

Sam:
[17:20] Great ticker.

David:
[17:21] Yeah, yeah, it's a great ticker. They also had, you know, the game streamer Ninja. He's somehow like involved as a chief innovation officer. So I don't know how all that works. There's a lot of competition here. But also, I've heard, you know, people like Tom, for instance, mentioned that there might be some consolidation here at some point. So, like, are you going to buy Tom Lee or is he going to buy you, Sam? What do you think, man?

Sam:
[17:47] I saw that quote. And I mean, if he's for sale, I'm happy to consider it.

David:
[17:54] There you go. I love that energy.

Sam:
[17:57] You know, just in terms of these ETH treasury trades being launched, I think I saw this funny meme. I think it was even on yours, Ryan, but it was a meme where like, you got to start at 100,000 or you basically are just mini me. Like you have to, you have to start at 100,000 ETH in order to like make a statement. And then anything below that, you're going to be in the long tail.

David:
[18:20] Yeah, I won't take credit for that meme, but I believe I saw that too. It was Joe Lubin's baldness, and then it was literally Mini-Me from the Austin Powers. He's baldness, and that's what you look like if you're under $100,000. That's the entry price here.

Sam:
[18:35] It is the entry price. I agree. I think that's the number. And let's see who gets to a billion first.

David:
[18:41] Okay, Sam, so we're talking about the sheer number of treasury companies that

David:
[18:44] are coming online, not just in Ethereum, but just broadly across the space. It has just become a huge theme inside of just the traditional stock market. You talked about earlier how Saylor just built this thing and it's a real thing. You emphasize it being a real thing. A lot of people's instincts in crypto, if they've seen a cycle or two, their instincts are like kind of perking up and like, oh, I know this pattern. There's a pattern. It's kind of, you know, filling up with hot air. There's copycats. They're also filling up with hot air. And eventually this whole thing pops. And so people are all kind of gearing up for, maybe it's bullish for six months. Maybe we could get six months of bullish price action, but then it pops. And then other people I've heard say, well, actually, no, structurally, the thing is designed to not pop. Structurally, it's sound. Maybe you could walk us through your thinking on that debate.

Sam:
[19:33] Yeah, well, I think that the long tail, I think some players in the long tail will pop. I think that'll collapse if you're in the long tail. But if you're in the top three, I think it won't. people have like cognitive overload issues if there are just too many of these ETH treasury plays. And of course you can calculate the NAV and you can make these like apples to apples comparison. Ours is a little bit more complicated because we have an actual real business in our structure that's making a lot of money. So, It's a little bit difficult to do apples and apples since all the other guys are shell, shell companies. I think, but mathematically, David, like to that, to the metaphor of these oil companies and the reason why they were trading, their nav was trading above the valuation of their proven oil reserves is because the markets expected them to find more oil reserves. And so, so long as the market has a perception that you're going to continue buying more ETH mathematically, you're going to have, you're going to be trading above your, your, the valuation, the assets under your nav. So I think that's how it works, but there are mindshare issues. There's cognitive overload issues. And that is something where I think the top three can enjoy. But I think after that, the long tail of, of, of people who are doing it, it may not work out.

David:
[21:00] What do you think of the risks here, Sam? Because we're trying to get a hold of that too. So there's premium to NAV, of course, and that can be generated, has been generated. I think there's definitely the case for that being generated. But the nightmare scenario, and we've seen some things previously, not in the treasury form, but in previous cycles, we've seen GBDC trust, for instance, trade at a deficit to NAV for a long period of time. And that was weird. That was scary, that destabilized a lot of things in crypto.

David:
[21:29] What's the risk there for, I guess, your company and ETH treasury companies in general?

Sam:
[21:34] Yeah, I never understood that mathematically. There was another company I had, ETH, and it was in Canada and had a great name and it had the word ETH in it.

David:
[21:43] It was like Ether Capital, I think.

Sam:
[21:44] Yeah, it was Ether Capital. That's right. And it always, you know, as I was building my ETH on our balance sheet, we had tens of millions on our balance sheet. And I remember looking at Ether Capital and just scratching my head, wondering why they were trading above, below NAV. I was confused. So that, I'll be honest with you, gave me pause. And then when Joe Lubin did SBET, I was like, all right, I should have been first at this. And my doubts, my doubts, including the examples that you came up, you brought up, kind of went away. And so I, you know, worked very hard and very, to get this to market very quickly. And so now we're off to the races, but yeah, it was, it was weird that, that some of those other companies, it didn't really work out the way it should. And I think it's related to mindshare and people paying attention. And now people are paying a lot of attention and they're realizing that there's a combination, there's like a virtuous, perfect storm. There's a regulatory clarity, right? That helps Ethereum. The investigations against all these projects on Ethereum are not like they used to be under Gary Gensler. So that's very good for Ethereum.

Sam:
[22:57] You have, you have Bitcoin just had a huge run and there are so many people in the space who feel like they've kind of lost, they kind of missed their, their chance with Bitcoin. But Ethereum is not at all time highs like Bitcoin. So now they're, they feel that perhaps there's like juice in Ethereum. And I truly believe there is. There's more developers now in Ethereum than there was when, during all time highs. So now with the regulatory clarity and all the development activity going on and all these stable coins that are now about to be built and more than more than half of stable coins are built on Ethereum, I think people are starting to understand that Ethereum is about to have its day.

David:
[23:40] Sam, the way that I think about these treasury companies is that there's really two core ingredients that goes into them to really make them work. The first is Riz and then the second is Alchemy. And Riz is just your ability to promote, your ability to capture Mindshare, as you've been putting it, really your ability to really preach about the nature of the asset that the company is collecting. And so that's the first one. And then the second one is Alchemy, which is, you know, Michael Saylor has just done a pretty remarkable job doing some financial engineering to really just squeeze the juice, squeeze the sponge out of the capital credit markets in TradFi. And he's, you know, so he has the master equity. He has all of these coupon bonds. He has different tiers of stuff to just max out every possible line of credit. Talk to us about the alchemy side of things. What kind of like ingredients you have cooking over there?

Sam:
[24:29] I mean, the financial engineering that, Michael Saylor uses this. It's all public information. It's a public company. We see the financial instruments he's using. We're going to use exactly the same financial instruments. And so that is, you know, again, I'm plagiarizing that shamelessly. So that's the financial engineering part. And with respect to the RIS, I mean, I'm not going to claim RIS, but I'm going to do my very best to explain to the markets and to our audience and to whoever is going to listen to me why Ethereum and why now and the utility of Ethereum and why that has the ability to rewrite the financial system, which is not something that can be done with Bitcoin. I'll do my very best.

David:
[25:15] There's another piece of alchemy that comes into play with Ether, the asset that's really just not available to Bitcoin. And that is making use of Ether the asset productively. So of course, the kind of the risk-free quote unquote way to do this is you just stake your ETH. And you coming from kind of a company that did Bitcoin mining, validating blocks for Bitcoin essentially in exchange for issuance and rewards, you know that very well, how that works in Bitcoin. So I guess my question is, what are you going to be doing with your Ether in general to increase yields. You can, of course, stake. You can get into some more exotic DeFi types of things with the Ether and generate returns that way. That has different level of risk and reward. But at the end of the day, I think a lot of the premium to NAV is going to be based on your ability to generate the highest amount of ETH per share in, of course, like a risk-adjusted way. So tell us about that type of alchemy. What are you going to be doing with the ETH?

Sam:
[26:13] Yeah, that's a great question. So So most entities such as ETFs are just passively holding crypto, holding ETH. We're taking a more active approach. We're staking all our ETH and operating validators, which generates yield. So that puts the capital to work and reflects a deeper operational commitment to Ethereum. It's interesting that ETH ETFs cannot stake. They don't have the legal ability to do that for now. So that puts us at a competitive advantage to ETFs because we're earning yield and not compounds. And in terms of yield and using more alpha maneuvers to juice up yields, you're right. We are looking at that already. And we have to be a little bit careful as well as balancing the risk reward trade off on that. But we are planning on being a little bit more aggressive on the risk curve to make sure that our yields are average. So that's what we're doing now. And I think that's true, Ryan. Like, I would like to put out ideally...

David:
[27:15] In fact, I think I'm going to commit to it.

Sam:
[27:18] I'll commit to it that every month we're going to show our ETH holdings. And if there's a way to show our yield, I would like to show that too, because I would like to call out the other companies and see if they could show their yields. And we could, you know, perhaps, you know, the audience in the markets can compare us with our peers and see who is generating more yield for their ETH. And I think that would be that would be really good. And of course, you know, you got to disclose what risks you're taking. So I think that'll be a good thing to do. And I think that should be done monthly.

David:
[27:50] Yeah, that's fantastic. So I guess this is not only a wreath, sorry, a race wreath, a race to acquire the most amount of ETH between all these treasury companies. It's also a race for more yields on that ETH as well. And one of the things that I love about this is I think there are a lot of traditional investors, Wall Street investors, who just for whatever reason, structure, like, you concern. I think a lot of this is structure, though. They just can't dabble in ETH yields and DeFi yields at all. There's no mechanism for allowing them to do that. As you pointed out, you can't get that in the ETH ETFs. And a lot of them just aren't structured to be able to use non-custodial wallets and kind of like, how do they do this? Where do they park their assets? And so these ETH treasury companies can be a vehicle to unlock a whole lot of capital, in addition to showing them what ETH can do inside of the Ethereum economy as a productive asset. Part of this is about just like saying, hey, Wall Street, look at our books, look at our yield, look what we're doing with our ETH. You can go do that too. And so I think that is a very bullish statement. And it's a differentiator when it comes to Bitcoin, which is much more of a, you know, it just stays there. It's not generating the yield. There's no staking mechanism. So that's definitely a positive for this stuff. I want to ask another, yeah, maybe reflect on that. And then I got another question for you.

Sam:
[29:12] Sure. I mean, look, we serve both institutional and retail investors for institutions. I guess we offer a regulated liquid way to access ETH and staking rewards without them managing custody or infrastructure. And for retail, you know, it's an accessible way to participate in Ethereum's upside through the stock market. So it solves both retail and institutional needs by offering both the youth exposure and the staking rewards.

David:
[29:41] Imagine a world where traditional finance meets the power of blockchain seamlessly. That's what Mantle is pioneering with blockchain for banking, a revolutionary new category at the intersection of TradFi and Web3. At the heart is UR, the world's first money app built fully on chain. It gives you a Swiss iBand account, blending fiat currencies like the euro, the Swiss franc, the United States dollar, or the renminbi with crypto, all in one place. Enjoy real-world usability and blockchain's trust and programmability. Transactions post directly to the blockchain, compatible with TradFi Rails, and packed with integrated DeFi futures. UR transforms Mantle Network into the ultimate platform for on-chain financial services, unifying payments, trading, and assets like the MI4, the MEth protocol, and Functions FBTC,

Sam:
[30:22] Backed by developer grants.

David:
[30:24] Ecosystem incentives, and top distribution through the UR app, reward stations, and Bybit launch pool. For MNT holders, every economic activity in UR drives value back to you, embodying the entire stack and future growth of this super app ecosystem. Follow Mantle on X at mantle underscore official for the latest updates on blockchain for banking. That's x.com slash mantle underscore official. Binance is the world's number one crypto exchange. Over 275 million users already trust their world-class security. Binance makes starting crypto as simple as it should be. Whether it's learning about crypto on Binance Academy or browsing hundreds of assets and viewing your newly created portfolio in a clear, easy-to-track dashboard, Binance helps you go at your own pace. For hardcore traders, Binance Pro opens up industry-leading services for trading professionals with fully bespoke trading products, along with a suite of white-gloved services for VIP and institutional clients. Need support? 24-7 customer service is on hand whenever you need it. And with some of the lowest fees and deepest liquidity in the market is no surprise why over 275 million users trust Binance for everything crypto. Download Binance today and get started in minutes. Binance is not available in certain countries, including the United States. Check its terms for more information.

David:
[31:32] It's incredible how fast all these ETH treasuries have really developed. I mean, just like a month ago, you know, like six weeks ago, there was literally nothing. There was nothing. Now we've got like at least five in a race to a billion. And actually, there's more that I've heard rumor of that are coming up.

David:
[31:48] There are at least two more.

David:
[31:50] Yeah, this is all moving very, very, very, very fast. And Sam, another trend, aside from ETH treasuries going public, is the trend of former Bitcoin mining companies. Actually converting to this ETH treasury strategy. And of course, you would be one of those, but it's Tom Lee's company, Bitmine Immersion Technologies. I believe this used to be a Bitcoin mining company, as well as I got to think the other ETH treasury company, BTCS. I think the B probably stands for something like Bitcoin. And you with BitDigital used to be a mining company, now moving to ETH treasury and ETH staking. Do you think this is a trend that will continue? And why is it? Was part of Michael Saylor right that like, hey, Bitcoin mining is kind of a shit business. It's really hard. And maybe this is a better way to kind of maximize the capital and also the intellectual capital that you've already built up. Do you think this is a trend that will continue?

Sam:
[32:49] Yes. Bitcoin miners already know that Bitcoin mining is not a promising business. This is a business that guarantees that your profits are halved, are taken out 50% every four years. Imagine being in a business where your profits are guaranteed to be cut in half every four years and you have to buy the latest hardware. And so you have to dilute your shareholders and to raise the money to buy this hardware that lasts for like not very long. And so it's just this hamster wheel where you're trying to squeeze out whatever profits you can before the next halving. And on top of that, the hash rate is going up. So it makes it even more difficult to squeeze the profits. And then I tell you what, I guarantee it almost that if Bitcoin gets to 200 or 300,000, and it probably will eventually. And by the way, with Bitcoin going up, it doesn't mean that the Bitcoin miners make more money. That's not how it works because you have to look at the hash rate and so on. But putting that aside, if Bitcoin gets to 300,000, then the sovereigns are going to come in. You're going to have companies, you're going to have countries that have basically free access to power and like Bitcoin miners. And so they're going to really go for it and they're going to start minting their own Bitcoin and the Bitcoin miner companies are not going to be able to compete with that and they're going to go out of business. That's why you're seeing a lot of Bitcoin miners doing either two things, leveraging their skill set to go into GPU, the GPU business, or Bitcoin.

Sam:
[34:18] Basically transferring themselves from Bitcoin to Ethereum, because that's a much more valuable way to maximize shareholder value.

Sam:
[34:29] And so, yeah, Michael Saylor was right in that meeting. We didn't agree on everything, but we did agree on his thesis that Bitcoin mining is a shit business.

David:
[34:38] Do you think that becomes a problem? I mean, I think all of us in crypto, obviously, we want the best for Bitcoin. We want it to succeed.

Sam:
[34:45] Yeah, absolutely.

David:
[34:46] Do you think that that could cause a problem over the long run? So what we're seeing is maybe the flight of smaller Bitcoin mining companies, and they have to kind of abandon the business. And so you get a lot of consolidation. I mean, we were talking to Paulo from Tether not too long ago.

Sam:
[35:03] He's got 100 million.

David:
[35:05] Sorry, 100,000 Bitcoin on his balance sheet. And he's like launching the largest Bitcoin miner, just to make sure that he can still produce blocks when the subsidies, the inflation issue, subsidies for Bitcoin kind of go away, that happening that you discussed over four years time. But if you kind of play that forward a little bit, does it become the case that Bitcoin mining gets more and more consolidated, fewer and fewer players, there's no longer room? It just seems to be the issuance policy of Bitcoin that that would be the case. And you see a time when transaction fees on Bitcoin are at basically all-time lows because everyone is holding Bitcoin. They're not moving it on-chain or they're getting access to it through Michael Saylor and other ETFs. Is this a concern to you over time? I mean, I know we don't want to besmirch Bitcoin, but it just seems to be like a growing concern in the network itself.

Sam:
[36:00] Right. I mean, there's a reason why we exited the business. That's why we exited the business. It's just not a promising future in that business. And those who... Continue to become pure plays on Bitcoin and just being stubborn about it. I mean, I wish them luck. And some of those guys are my friends. I'm not trying to prematurely dance on their graves or anything, but it's just a very difficult business. And it's just not promising because it just becomes harder and harder to squeeze out a profit. And there's going to be a point where you need basically free access to energy. Your energy costs have to be basically zero for your Bitcoin mining to work. And I don't think any Bitcoin miner has free access to power, only countries do. And once Bitcoin gets to about 300,000 or so, countries will just get involved in Bitcoin mining. And then the hash rate, the hash difficulty will explode upwards. And then it's going to be very difficult for Bitcoin miners to be profitable. And then you have the halving coming up, and then it's just game over.

David:
[37:05] Well, countries mining Bitcoin actually doesn't really sound like there's a problem with the Bitcoin security budget in that scenario.

Sam:
[37:12] Yeah, I guess not.

David:
[37:13] So Sam, all this brings up the question of how big do you think this could grow? And I run the risk of somebody correcting me in the comments because I'm just like remembering some numbers on the fly. But I think the total amount of Bitcoin in ETFs right now is something like 6% of total supply. It's closer to 3% for Ether, but that number is kind of ratcheting up. And I don't know the total amount of Bitcoin in Bitcoin treasury companies, but God, how much does Saylor have? He's got to be close to, you know, two to 3% of all supply, something like that. And we're less than half a percent of all ether supply in treasury companies right now, right? And of course, that is just like from, you know, gone up from zero about six weeks ago. Question to you is how big do you think ETH treasury could actually grow maybe as a portion of supply, maybe in terms of, you know, billions of dollars, however you measure this, is it going to be as big as Bitcoin?

Sam:
[38:07] I think it will be, but I hope it's not fully concentrated on one party, because, There is, there is sometimes I wonder, like when you're Michael Saylor, it's just like, all this is concentrated on one guy. And when you're that much of a percentage in the entire supply, it's not a good thing, actually. It's, it's, it's a bad thing. And I'm sure people who understand decentralization, decentralization, they agree with that. So I hope it's basically, you know, my, my, I really hope that it's basically a top three horses and it'll be as big as Bitcoin, but it's going to be shared amongst the three just, and there's a friendly competition amongst the three. That's, that's what I hope will end up happening. And I hope there isn't a, an MSTR of Bitcoin, although I'm aiming to be that, but the others are too. And I just think if there's like one giant MSTR that dwarfs everybody else, then you have sort of a key man risk. And that's what I think is happening right now with Bitcoin. You have a giant key man risk with Michael Saylor.

David:
[39:16] Sam, as we bring this conversation to a close, we've talked about your ETH treasury company. We've, of course, mentioned all the other ETH treasury companies that are out there. As we close, inform our listeners about what sets yours apart. Why is yours special?

Sam:
[39:31] Well, ours is very different for a couple of reasons. First, we have an underlying business. And secondly, I think it's just basically, you know, I'll call it rate of aggression. Like we're going to be as very as active as possible in buying Ethereum. And I think SBET has set the standard and I think that's great. That's the standard to beat. And we're going to do our best. We already have a roadmap. We're going to be executing that roadmap in order to be placed at number one. And that's all I can say. There is another thing I'd like to say is that I... I didn't just wake up and think, oh, wow, this is a very sexy thing to do. Let's do it. I've been in the Ethereum space for a very long time, since 2017. When I became CEO of BitDigital, I almost immediately said, let's put some Ethereum in our balance sheet. And we had more Ethereum in our balance sheet than anybody except Coinbase before SBAT came on. But we didn't market it. We didn't talk about it. We staked that whole thing. So we had the pipes, the infrastructure. We already had that going. And so this is not something we just woke up and thought, hey, this is trendy. Let's take what? Let's take advantage of it. This is something we've been building for a long time.

David:
[40:42] Well, Sam, we're so glad you stopped by. Best of luck on this mission. We want you to propagate this far and wide, of course. I think David and I have talked about Ether and Ethereum for a very long time. But to crypto natives, this is crypto media. We want you to go forth and talk to CNBC, get on Bloomberg, talk to traditional finance as well, because I don't think the story of Ethereum and even more importantly,

Sam:
[41:04] Ether, the asset.

David:
[41:05] Has propagated as far as it should. And I think part of what you're doing with your ETH treasury is to make that happen. So thank you for your work. I know you've got some important meetings coming up. We appreciate you stopping by.

Sam:
[41:16] Thanks, Ryan. Thanks, David.

David:
[41:17] Bankless Nation, got to let you know, none of this has been financial advice. Of course, crypto assets are risky. So are ETH treasury companies. They can be at least, you could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're Glad you're with us on The Bankless Journey. Thanks a lot.

Music:
[41:45] Music