Transcript

The Bitcoin Treasury Reckoning - Why People Are Blaming JPMorgan

From The Plain Bagel · Episode page · Watch on YouTube

· 20 min · 3,878 words · 29 timestamped sections

This is the full, timestamped transcript of "The Bitcoin Treasury Reckoning - Why People Are Blaming JPMorgan", an episode of The Plain Bagel published November 28, 2025 (20 min, about 3,878 words). It mentions 5 people, works and ideas, including Strategy, JP Morgan, Federal Reserve, Metanet, CFA Program.

What is discussed, and when

  1. – 5:00: Strategy, JP Morgan, Federal Reserve
  2. – 10:00: Strategy, Metanet
  3. – 15:00: Strategy, JP Morgan
  4. – 20:00: Strategy, JP Morgan, CFA Program

Notable quotes from "The Bitcoin Treasury Reckoning - Why People Are Blaming JPMorgan"

  • Just on the announcement of their Bitcoin or other crypto treasuries. and Strategy, the leader of the pack, run by Bitcoin and AI image generator enthusiast Michael Sailor, was…
    about Strategy · at
  • The sell-off in strategy is actually a premeditated attack by none other than America's largest bank JP Morgan with many enthusiasts encouraging others to boycott the…
    about JP Morgan · at
  • Grown worried about lofty tech valuations or the so-called AI bubble and the potential for the Federal Reserve to hold off on further rate cuts given that it see signs of a…
    about Federal Reserve · at
  • Have lost money on their Bitcoin purchases. And companies like Strategy and Metanet, another popular Bitcoin treasury, have seen their valuations decrease recently from two…
    about Metanet · at
  • Of doing. And hey, there's certainly been evidence of that in the past. But it'll be interesting to see when the CFA program starts teaching spreading rumors of a short squeeze…
    about CFA Program · at

Who and what is mentioned in this episode?

Companies & orgs

Concepts & topics

Full transcript with timestamps

Hey everyone, it's Richard. You're watching the Plain Bagel. It hasn't been that long since we last talked about Bitcoin Treasury Companies uh here on the channel, but oh boy, it's been a painful short while for many of these stocks. Just a few months ago, these so-called digital asset treasury companies or DATO for short, were having the time of their lives. Stocks were jumping hundreds of percentage points just on the announcement of their Bitcoin or other crypto treasuries. and Strategy, the leader of the pack, run by Bitcoin and AI image generator enthusiast Michael Sailor, was taking advantage of what many would dub the infinite money glitch, whereby it would issue shares to buy more Bitcoin and see its stock price surge as Bitcoin's price continued to rise. But over just the past couple of months, the unthinkable has happened.

Bitcoin's price stopped going up with the crypto having fallen 30% from its all-time high reached in October and cryptocurrencies as a whole experiencing a broad sell-off with the Treasury companies who dedicated themselves to acquiring these assets being hit even harder with strategy itself having fallen over 60% since its high in July. Now, of course, if you zoom out, the latest correction in Bitcoin's price isn't really that meaningful on a relative basis. It really just marks the reversal of the rally we've seen under President Trump. But given that many of these Bitcoin treasuries entered the space while Bitcoin was approaching its all-time highs, many of these companies are now underwater on their investments.

With even Strategy, who's been accumulating Bitcoin over many years, having a cost basis that's now not far off of the current price of Bitcoin. And it's raised some concerns and questions over the financial health of these companies and whether they could find themselves being forced to liquidate their holdings and pulling cryptocurrencies down with them, which is notable given that these companies have come to own 5% of all outstanding Bitcoin and over the past couple of quarters have been the largest buyer of the cryptocurrency. Now, naturally, this troubling news has led to some turmoil among those who are irresponsibly long on strategy. And to handle the fallout, we've seen some investors adopt a interesting tactic to shunt responsibility for entering a leveraged investment on a volatile asset, blaming Wall Street. You see, over the weekend, we had some pretty wild claims circulating online around the company

strategy, ranging from claims that the US government was contemplating a multi-billion dollar investment in the company and was just waiting for the stock to fall low enough. A tweet that the CEO sailor himself brought some attention to after liking to claims that the sell-off in strategy is actually a premeditated attack by none other than America's largest bank JP Morgan with many enthusiasts encouraging others to boycott the institution and many online creators declaring proudly that they stand with Michael Sailor in this madeup conflict. Now here it's worth highlighting that not all the posts against JP Morgan are specifically part of this sort of pro- strategy movement.

Uh there are some who have criticized JP Morgan for banking Jeffrey Epstein and alternatively for debanking a number of prominent crypto investors or institutions. And look, I'm not going to sit here and claim conversely that I stand with JP Morgan and whatever this is. I think there are a lot of valid criticisms of many of these large financial institutions. We're definitely seeing strategy investors trying to tag onto that movement, encourage investors to try and prompt a sort of GameStop meme stock rally 2.0 0 despite a lot of the claims around JP Morgan sort of targeting this business not really showing any evidence and those that do claim to have again evidence often just misinterpreting the data we do have. And so today I wanted to tackle these two types of topics. On the one hand, what this decline in Bitcoin's price means for these treasury companies including strategy where there's some kind of

disagreement around whether this means that the company will have to liquidate if the price falls below their uh average cost basis or if the company will be completely fine as the CEO claims. and then separately at the risk of being accused of being an industry plant attacking the JP Morgan situation and what we actually know about what's going on there. So, we're covering a lot of ground. I'll leave chapters in the description down below if you want to skip to the different sections, but let's start off with Bitcoin's price and what we know so far about its decline.

And frankly, it's not a lot. So far, a lot of Bitcoin's price decline has been broadly attributed to a general flight from riskier assets. Markets have seemingly grown worried about uh lofty tech valuations or the so-called AI bubble and the uh potential for the Federal Reserve to hold off on further rate cuts given that it see signs of a weakening economy but still wants to keep inflation under control. And over the last little while, we've seen signs that the restrictive monetary policy from the central bank has started to bite into markets and started to decrease liquidity in the system. Uh, for example, we've seen the repo market, which is really just a short-term lending market for financial institutions, start to experience some strain with the Federal Reserve's reverse repo facility, which you can just think of as a place for financial institutions to park their excess cash, having fallen dramatically from $2

trillion to 2 billion. And the standing repo facility, which you can think of as a place for financial institutions to borrow from the Federal Reserve when cash is harder to access, has started to see some activity, albeit currently just a small amount. Now, I've seen a lot of posts really blow these two charts out of proportion. But all it really means is that we are seeing lending conditions starting to tighten up, which you generally expect from quantitative tightening and restrictive interest rates. And generally when it gets harder to borrow money, we tend to see money leave assets like Bitcoin to be used for other purposes like deleveraging debt.

So while there aren't any clear catalysts contributing to the sell-off in the same way that we saw in 2022, we have seen a general sense of pessimism take over the markets which has contributed to the crypto sell-off. And for digital asset treasury companies who have gone allin on these crypto assets, it's been pretty devastating. Prior to the sell-off, many Bitcoin treasury companies were trading at premiums to the value of the Bitcoin they held, meaning that their market cap to net asset value or the price per share divided by the Bitcoin per share was above one. Strategy in fact saw its multiple rise as high as three times during 2024, meaning that investors were effectively paying $3 to Strategy for $1 of Bitcoin exposure. And this premium valuation is ultimately what allowed companies to continue this type of operation to raise capital by selling shares uh cycle that into Bitcoin thereby increasing the price of Bitcoin

and improving their valuation for the Bitcoin they already hold leading to again this so-called infinite money glitch. With this recent decline, however, that boon has quickly evaporated. Standard Charter estimates that with Bitcoin's price under $90,000, half of Bitcoin Treasury companies will have lost money on their Bitcoin purchases. And companies like Strategy and Metanet, another popular Bitcoin treasury, have seen their valuations decrease recently from two times to now under one times, meaning that these shares now trade at a discount to their Bitcoin net asset value. Now, it's worth noting that strategy on its website does show its MNAV multiple as still being above one times, but that's because it's using its enterprise value rather than the market cap for their common shares, meaning they're including the value of their debt in the numerator, which in some cases isn't inherently

unreasonable. And as is, the MNAV is a very limited gauge. But even this figure has quickly been approaching one, and it's worth making the distinction that price per share is currently less than the value of Bitcoin per share. And this valuation compression puts some of these companies in a precarious position. Uh the only reason the business model of selling shares to buy Bitcoin worked was because of this valuation premium. The fact that investors were kind of turning a blind eye to math for a second. Now that the shares are trading at a discount to net asset value, it doesn't really make sense to keep issuing shares. It will actually destroy value for current shareholders. And in fact, it actually incentivizes these companies to now sell their Bitcoin to buy back their shares since that would be a better use of shareholder capital. And we may in fact see shareholders start pressuring these companies to do that.

The issue, of course, is that that could naturally trigger a sell-off for the very crypto assets that these companies base their value off of and further exacerbate the issue. As treasury companies sell, Bitcoin's price could decrease, thereby further compressing valuations and forcing further treasuries to also start selling, hurting the valuation of whatever cryptocurrencies these companies have left over. And in fact, some have speculated that part of the sell-off we've seen has been a result of just this. There's also, of course, the issue of how many of these treasury companies actually funded their Bitcoin purchases.

Because in addition to issuing shares, many firms also took on leverage by issuing convertible notes. uh something that works great when the asset is growing hundreds of percent a year uh but not so much when the price is suddenly stagnant or even decreasing. We may see companies again forced to sell some of their holdings to meet the payment obligations that they've promised. Now for strategy itself, there's been a lot of debate online about whether the company would survive a decline in Bitcoin's price below its cost basis of $74,000, the point in which the company would actually have an unrealized loss on its Bitcoin holdings. But there is some truth to the argument that strategy would survive a price decrease below this cost basis of $7400.

It's just not evidence that the company is a safe investment like some are interpreting it. You see, as of September end, Strategy had $8.2 billion in convertible notes and $5.8 billion in preferred shares. Both of which we'll refer to as debt here, but are technically hybrid securities with features of both debt and equity. Now, for the last quarter ending September 30th, the company paid 8.6 6 million in interest and roughly $140 million in preferred share dividends which if we crudely annualize gets us an annual obligation for these instruments of roughly $600 million a year. Now in addition to this strategy just this month also announced a new europriced preferred share that self will be paying 10%. So if we assume that the company sells all 7,750,000 shares of this new class, it'll add another roughly $90 million to our obligations here. So, in total, we have a ballpark estimate of $684 million a

year in payments the company has to make to its so-called creditors. Now, because Strategy's earnings come almost exclusively from the price appreciation of Bitcoin, uh they don't have any cash flow to pay these amounts. What they do have, however, is $59 billion worth of Bitcoin on their balance sheet. So, if the price doesn't fall further, they could in fact meet this annual obligation for quite a long period of time or alternatively just pay off their creditors at face value outright. On top of that, as mentioned in our last video, Strategy doesn't have standard leverage.

The company's most expensive form of capital, the preferred shares, currently offer yields of around 10%. Which is considered very high. But the reason for this high yield is that missing a preferred share dividend to your investors doesn't constitute a default like missing an interest payment on debt would. So if strategy found itself unable to pay its preferred share dividends, it could simply skip them without that constituting a default or forcing any sort of liquidation on the company. Meanwhile, many of the convertible notes which do actually constitute debt don't actually have an interest payment that Strategy needs to make. Finally, strategies obligations to its creditors here do come with a number of conventions that again give the company a lot of leeway during a crypto sell-off. For example, one of the preferred share classes can actually pay its dividend in MSTR shares. So again,

there is some truth to the argument that strategy is not really on the cusp of bankruptcy because it has a lot of rights and privileges with the debt that it's raised from creditors. But while that addresses one type of risk, it doesn't actually make the company a safe investment. Yes, the company has the money it needs to pay back its creditors, but that money will ultimately be coming from its common shareholders, the shareholder equity on its balance sheet. If Strategy starts selling Bitcoin to meet its obligations, the stock is likely to crash further. Uh the company's supposed Bitcoin yield or the increase in Bitcoin per share would turn negative. Shareholder equity would fall as money is transferred from shareholders to creditors. And any shares issued in the process while yes it will help the company meet its creditor obligations would just further deteriorate the value of current shares

held by investors given the valuation discount. Now, alternatively, the company could say screw over its preferred shareholders in favor of its common shareholders to keep its Bitcoin, but that doesn't put it in a much better spot, right? Because at that point, the company is inhibiting its ability to further raise funds down the road, uh, effectively killing its Bitcoin accumulation growth engine, and you'd likely still see MSTR share price decrease as, uh, shareholders convert into common share, and just the news of it missing payments would still hurt the price. So yes, technically the company could survive a further Bitcoin price decline by liquidating its holdings and hurting investors, but that's not really much consolation for investors who are currently down on their investment. Not to mention that with Strategy being the single largest institutional holder of Bitcoin outside of ETFs, the sale of the

company's Bitcoin would certainly hit the price of the asset, which could shift the infinite money glitch into a sort of death spiral for digital asset treasury companies. So yes, even with strategy not being in as precarious of a situation as other treasury companies here, there is a reason we've seen this meaningful decline in the stock's price. And naturally, it doesn't bode well for DACA as a whole. But that, my friends, is where we come to the old ace up the sleeve, the strategy from strategy enthusiasts to combat this decline, play victim to a conspiracy. Again, over the weekend, we had a number of rumors about Strategy circulating online with the one that got the most traction being that JP Morgan, the US banking giant, was actually shorting the stock and trying to crush the cryptocurrency. With some suggesting that the stock was actually on the cusp of, get this, a short squeeze.

Sounds familiar. with some suggesting that JP Morgan had entered a short position so large it could put the bank out of business if strategy rallied just 50% leading many to push others online to join the fight by buying their shares. No, those are some pretty tall claims. Surely there's some evidence to back up these arguments, right? Uh no, not even a little bit. The publicly reported short interest on strategy is currently around 10% of their outstanding float, which is sizable, but not really aligned with what many are suggesting. And in fact, this lack of evidence has itself been used as proof that JP Morgan is surely hiding a massive short position. But then why JP Morgan? Why are we seeing this bank specifically being targeted here? Well, it seems to revolve around a recent note on an announcement that strategy faced the risk of being delisted from a number of indices. You see, on October 10th, we had MCI, a

global equity index company, publish an announcement indicating that it was reviewing whether digital asset treasury companies should be included in its indices. This after it had made a similar announcement around MetPanet specifically back in September with MCI noting that these DACA, which again raised funds for the purpose of buying a financial asset, have characteristics similar to investment funds, which are currently not eligible for index inclusion. Now, this was followed by a note sent out by JP Morgan to its own investors, warning that strategy in particular faced the risk of being dropped from benchmark indices like MCI USA and NASDAQ 100. Something it argued would hurt their liquidity and decrease investor appeal. And this whole issue isn't really anything new. The company itself was snubbed by the S&P 500 because of its focus on just buying one asset. It's not really an operating

company that fits nicely into that sort of index model. But this JP Morgan note has been highlighted as the smoking gun, the irrefutable proof, your honor, that JP Morgan is secretly shorting strategy because their note warning about this risk came over a month after MCI's own announcement. I guess the argument is that the company's looking to dig up dirt and and bring attention to this old news to to crush the company. But yeah, now since this initial note, people have also dug up some other items that they believe further proves a coordinated attack here. Uh, for example, last Wednesday, Empory Digital CEO Ryan Lane shared that some JP Morgan clients he was in touch with had allegedly seen their margin requirements increase meaningfully on their strategy shares early in July, meaning they could no longer borrow as much against the shares for the purpose of investing. Something that he framed

as a way to reduce demand for the shares and force selling. And just this week, some flagged the announcement by JP Morgan that they had filed to sell structured notes offering leveraged exposure to Black Rockck's Bitcoin ETF with this adding to the narrative that JP Morgan is trying to take down strategy and eat their lunch. But to the first point, on top of it being hard to verify these claims and the fact that the stock didn't actually sell off after the supposed July 7th shift, it's not really uncommon for brokers to limit the margin on volatile or risky positions.

In fact, if you go to TD, another brokerage, you can see that they too have a restricted loan value on strategy of 25%. So, bit of a smaller margin requirement, but still high at 75%. And you can see that there's some positions here that don't allow for any sort of borrowing, which makes sense because banks don't want to lend money on stocks that have a high risk of losing investors money because it means they might lose the money on their loan. And last month, Strategy received a highly speculative credit rating. So there's definitely this industry perception that it's a high-risk position. And to the second point on the product launch, yes, JP Morgan might be trying to compete with strategy on this, but we've had financial institutions, including JP Morgan, launching crypto offerings throughout all of 2025. And it's interesting because an attack on strategy won't actually help the bank

with a launch of a competitive product if it scares investors out of leveraged Bitcoin investments. Now, there are also some who have highlighted a recent sale of 772,000 shares of MSTR by JP Morgan as proof that their targeting strategy, but even that's sort of a nothing burger. Outside of this just being a minuscule amount relative to JP Morgan and even strategy size, if you go to the company's 13F filings, you can see that yes, the company did in fact sell shares in the last quarter and does also actually in fact have put options on the stock, which is a type of short bet. But on the net, they actually have a net long position in the hundreds of millions on the stock. Now, again, some are arguing that JP Morgan's hiding a short with uh swaps and the like, but you can't really, you know, debunk claims that something's being hidden. So, that's as far as I can go. And of course, the idea

that a 50% increase in Strategy stock price would bankrupt JP Morgan, who's 16 times larger than Strategy and has six Strategies worth of shareholder equity alone, is fiction.

It's a total fabrication. We made it up. It's fiction. It never happened. So, it seems pretty clear that most of these rumors are very much unsubstantiated uh attempts to just drive demand for the stock. So, you got to be careful of any sort of claim you see on social media or any personality who blindly cheerleads a given investment. While some people try to build this sense of community around a given stock or position, uh, suggesting that it's about more than just the money they're trying to make, we're clearly seeing people using false narratives here to try and enrich themselves, which is funny when you consider that that's exactly what they're accusing big banks of doing. And hey, there's certainly been evidence of that in the past. But it'll be interesting to see when the CFA program starts teaching spreading rumors of a short squeeze and blaming banks as a strategy for managing positions you've

lost money on. Now, none of this is to argue that Bitcoin is bound to collapse or even that strategy is bound to see itself liquidate. Of course, if we see the cryptocurrency recover to its longerterm trend, the company is likely to follow suit. But I did find the story fascinating and wanted to take the opportunity to highlight that for a business whose sole purpose is to sell shares to buy Bitcoin, there is downside risk as we're seeing when those shares sell off and no longer command that premium price. Anyway, that's the video.

Thank you guys for joining me today. I hope you found this video helpful or entertaining if if nothing else. If you did, please do make sure to like, subscribe, all that good stuff. It does help the channel tremendously. and let me know your thoughts on Bitcoin Treasury companies, the current situation we're seeing around strategy, and which companies you think uh JP Morgan is secretly shorting into oblivion. Any and all thoughts welcome down below. Uh, thanks again for joining me and as always, be safe out

Questions about this episode

What is discussed in "The Bitcoin Treasury Reckoning - Why People Are Blaming JPMorgan"?

In order: 0:00 Strategy, JP Morgan, Federal Reserve; 5:00 Strategy, Metanet; 10:00 Strategy, JP Morgan; 15:00 Strategy, JP Morgan, CFA Program.

What is mentioned in this The Plain Bagel episode?

5 people, works and ideas are mentioned, including Strategy, JP Morgan, Federal Reserve, Metanet, CFA Program. Each one on this page links to its own page with every episode that mentions it.

How long is "The Bitcoin Treasury Reckoning - Why People Are Blaming JPMorgan"?

The episode runs 20 min; the transcript is about 3,878 words in 29 timestamped sections.

More from The Plain Bagel

About this transcript: the episode's spoken words as captioned on YouTube, split into timestamped sections. Reclip.Me locates every person, work and idea in the text, keeps the time it is first named, and quotes the words around it verbatim. Last updated January 24, 2026.