Discover how a small UK company adopted a Bitcoin treasury strategy, turning millions into over a billion, and why this model may be the future of investing.
Timestamp Overview
[00:00:00 - 07:20] From Small Business to Billion-Pound Bitcoin Company
- Andrew Webley explains how his small web design company went public in the UK.
- The company adopted a “Bitcoin Treasury Strategy,” holding Bitcoin as its main asset.
- Its value grew from a few million to over a billion pounds in just a few months.
- The company holds its extra cash in Bitcoin, believing it’s the best asset in the world for future growth.
[07:20 - 10:42] Why Is a Small Company Worth So Much?
- The company’s value isn’t based on its profits, but on its growing pile of Bitcoin.
- Investors are willing to pay a premium for the shares, similar to what happened with a Japanese company called Metaplanet.
- This premium exists because the company can raise money and buy Bitcoin more effectively than an individual can.
- There are limited ways for people in the UK to invest retirement funds in Bitcoin, making companies like this very attractive.
[10:42 - 15:59] A New Way to Create Value
- Traditional companies are valued on profits (P/E ratio), which can take decades to earn back your investment.
- Bitcoin treasury companies are valued on how quickly they can add more Bitcoin to their balance sheet.
- This new method creates value much faster, sometimes in months instead of years.
- Smaller companies can grow their Bitcoin holdings much faster than giant ones like MicroStrategy, making them potentially more explosive investments.
[15:59 - 23:14] The Lifecycle of a Bitcoin Treasury Company
- As these companies grow, they attract bigger and more stable investors, like large investment funds.
- Currently, there are very few publicly traded companies aggressively buying Bitcoin, so the opportunity is still new.
- The goal is to create different investment products in the future, like special shares that pay a fixed income (a dividend).
- This strategy allows them to learn from successful companies like MicroStrategy in the US and Metaplanet in Japan.
[23:14 - 29:20] The “Backdoor” for Bitcoin Investing
- In countries like the UK and Japan, rules make it hard for people to buy Bitcoin through traditional investment accounts (like a 401k or an ETF).
- These treasury companies provide a legal and accessible “backdoor” for people to get exposure to Bitcoin.
- There is a massive amount of money (trillions of dollars) in low-return investments like bonds.
- These companies can attract that money by offering better returns, using the capital to buy more Bitcoin.
[29:20 - 38:05] How They Did It and The Risks Involved
- Smarter Web went public using a “reverse takeover,” which is a faster, more efficient way to get listed on the stock market.
- Jesse Myers describes these companies as a “release valve,” allowing money to flow from overvalued traditional stocks into Bitcoin.
- A new metric called “Days to Cover” is introduced, measuring how quickly a company can grow into its valuation—it’s like a P/E ratio, but for days instead of years.
- Important: Bitcoin is extremely volatile. While the potential rewards are high, so are the risks, and its price can drop suddenly.
[38:05 - 49:40] The Genius of Preferred Stock
- Companies can raise money by issuing “preferred stock,” which pays a fixed income (like a dividend) to investors.
- If Bitcoin’s value continues to rise dramatically, the fixed dollar amount of that dividend becomes a tiny fraction of the company’s total value over time.
- This allows the company to borrow money very cheaply in the long run while providing a stable, high-yield income stream for investors who want less risk.
- This is a key strategy used by MicroStrategy to fuel its Bitcoin purchases.
[49:40 - 55:18] The Future: A Winner-Take-Most World
- Jesse Myers believes the only thing better than owning Bitcoin is owning a company designed to get more Bitcoin.
- He predicts that in each country, one dominant Bitcoin treasury company will emerge as the “winner that takes most” of the investment capital.
- Smarter Web has a huge head start in the UK, similar to Metaplanet in Japan and MicroStrategy in the US.
- The race to become the dominant player in other countries is happening right now.
Notable Quotes
The Next Financial Giants
These companies are going to be almost like the banks of the future. And I mean that in a capital slash balance sheet perspective.
Andrew Webley @asjwebley
A Generational Opportunity
This reminds me of those sorts of times a hundred years ago when there was something so significant happening in the world that was not just the chance of a lifetime, but the chance of a hundred years.
Andrew Webley @asjwebley
New Valuation
You can go buy Apple for 35 PE or you can buy a Bitcoin treasury company that's delivering, growing into its value in maybe less than a year.
Jesse Myers @croesus_btc
Embracing Volatility
Volatility is vitality. When it comes to this strategy in particular...you want volatility because that volatility skews to the upside.
Jesse Myers @croesus_btc
Winner Take Most
I think what's happening here is that there will be a winner take most in each capital market. We've seen that in the US, that's Strategy. We've seen it in Japan, that's Metaplanet.
Jesse Myers @croesus_btc
Asset Performance
The only thing better than bitcoin is more bitcoin, as Saylor likes to say. And Bitcoin treasury companies are designed to achieve that.
Jesse Myers @croesus_btc