Power Analysis

Hedge Fund Q&A with Eric Jackson, EMJ Capital: IREN, HUT, CIFR & OPEN!

• Anthony Power & Bryce McNallie • Season 1 • Episode 617

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We go from Drake and viral stock videos to a serious framework for investing in OpenDoor, AI data centers, and the miner-to-HPC transition. We also break down why executive compensation headlines can be a distraction and how systematic crypto regime models can help manage brutal volatility. 

• Drake’s unexpected role in building an audience for stock research 
• OpenDoor’s turnaround timeline under new leadership and why rates matter 
• Why pullbacks do not automatically break the OpenDoor thesis 
• The Iren RSU backlash and why insider activity can be misread 
• Iren’s strategic path with NVIDIA and how vertical integration could lift GPU economics 
• Token based AI usage and what rising demand means for power consumption 
• Cipher’s co-location model versus CSP style full stack compute 
• Why popularity increases volatility and how newcomers change price action 
• Letting winners run while sizing risk with systematic regime signals 
• EMJX and the case for a hedged multi-asset crypto treasury approach 
• Prediction models beyond markets from Bitcoin to Supreme Court decisions 

Let us know in the comments section below what you thought of today's discussion and your top picks in the sector currently!


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Welcome And What We Cover

SPEAKER_00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis. In today's episode, Anthony Power and I are pleased to welcome Eric Jackson back to the program. He's the president at EMJ Capital. Looking forward to picking his brain on Outlook as we enter earnings season here, not to mention an updated bullish thesis for iron, cipher, and open door. We've got a lot to talk about. Before we get into it, take a second, smash a like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. And let us know in the comments section below what you thought of today's discussion and your top picks in the sector currently. With that being said, let's get into today's interview. Alright, guys, away we go. Friday afternoon, finishing the week off in style. We've got our good friend Eric Jackson back on the program. He's the founder, president, and portfolio manager at EMJ Capital. Also happens to be a bull on Iron Cypher and Open Door, which we're looking forward to discussing. Eric, always a pleasure. Thanks for making the time.

SPEAKER_02

Great to be with you guys.

SPEAKER_00

Likewise.

The Drake Campaign And Viral Investing

SPEAKER_00

Now we were just saying before we started, uh, World Cup going on in Toronto, your home city, a big match yesterday with Ronaldo. Your buddy Drake was in attendance. It looked like we wanted to get an update on the Drake stakeout, the open door situation, and uh where your thesis is at for that company right now.

SPEAKER_02

Okay, so Drake, uh I guess I'll split them in two. Um, you know, initially I it was about a year ago I started going in front of Drake's house holding up my sign uh when I was uh because my seven now 17-year-old son suggested like, Dad, if you want to go viral on social media, you know, you should stand in front of Drake's house every day until he buys like one share of open door. And then that everyday factor, uh including like weekends and holidays, is what is going to make it go viral. And he was right about that. But I think I think it was after like about two or three weeks I thought, you know, this is kind of getting a little redundant. So I kind I'm still doing the daily videos. Uh today, this morning at 5 a.m., I was walking my dogs, that was day 318. But they've kind of morphed into uh you know stock updates, uh market updates sometimes. Um uh and uh or or but more recently, I mean I did get back into the Drake um universe because uh he obviously had a big album release in May. And I thought it would be kind of interesting leading up to that album release to dive into the business of Drake and how Drake, he's now 15 years into being a rapper or performer, and that's unusual actually in the world of rap or just in you know music in general. You know, most of these artists like they burn bright for like maybe two or three years and then they die off, and he's kept it going and kept stayed relevant and stayed interesting, and and so uh sort of unpacking how that you know how he's been able to do that. Um he has some contract negotiations with his music label, Universal Music Group, coming up where um you know he might resign or he might go off on uh sign with a new label or go independent and all this kind of stuff. So I've I've gotten into that. So uh and and it turns out that you know that those discussions uh they themselves kind of I I wouldn't say it was as viral as Open Door, but it did get a whole new crop of um, I guess, fans starting to follow me, mostly on Instagram, actually, more than and and YouTube, more than um than X, which is more of like the stock focused uh audience. And uh and Drake himself uh started following me on Instagram, so that's great. Um he liked one of my videos that I that I did on him talking about him and his relationship with Toronto. Uh so I haven't I haven't hit him up in the DMs to you know to buy the one share of Open Door or anything like that. So

OpenDoor Bull Case And Rate Pressure

SPEAKER_02

that's sort of Drake on on sort of one side, and then on the open door side, I think the last time I was home with you guys, uh I looked it up, it was like last September. And that's when um Open Door was uh at its, you know, I'd gone from like 50 cents in June of 2025 to I think almost 11 bucks by uh I think it was like second week of September of last year, and that was maybe the like the week after Kaz got announced as the new CEO. So I think Kaz is an awesome like Travis Kalnik type CEO. I think he's doing all the right things, but the stock has obviously pulled back from 11 to now it's I think it's just over five bucks now. So it's still up a lot. It's like sort of 10x up from like a year ago, which is great, but a lot of people didn't get in at 50 cents or 70 cents or 80 cents. And so I I I've gotten a lot of hate uh in the last few months um from people that got in maybe at 10 bucks or nine bucks or whatever, uh, impatient or kind of what is it? What's wrong with Open Door? Um, and the answer is like nothing's wrong with Open Door. I mean, I think again, like they're they're fixing a lot of the sins of the past management team and past CEO uh in these first few months. They can only do so much. They're building out the team, they're hiring a bunch of people. I got to visit, they actually have an office in in Toronto, uh, even though they don't, they don't uh you can't buy and sell any houses on open door in Canada, they're only in the US uh because you know they they open an office here though because uh they've been hiring like like crazy some of the AI uh talents up here. And so uh I got to visit with Caz in person and with uh this guy Lucas Matheson, who's their president uh and based in Toronto, and see their offices. And you know, it's all systems go. I think uh again, like they're they're doing the right thing. I mean I still have I still believe in $82 as sort of the price target, but that was always a 2028 target. It wasn't a December uh you know 2025 target or anything like that. So um uh you know, I'm I'm hopeful. Obviously, like uh interest rates have been a big uh bear for them and and sort of held the stock down. Hopefully, though, with the jobs number that we got recently uh you know showing some weakness in the US jobs market, uh that's gonna, you know, get the the Fed hawks like Kevin Warsh um you know off their high horse, talking like they've got a hike interest rates because of the strait of hormoons and and all this other stuff, when I think a lot of this sort of uh new inflation that we've seen is sort of artificial one time and will start to recede hopefully as the war wraps up and uh and other things uh you know take take place. So uh still very bullish on on Open Door and on Caz and the new management team there.

Iron RSUs And Executive Incentives

SPEAKER_01

Awesome. And just to keep that theme of music going along, I'm a big music fan myself. We had a little group over here in the sort of like the 60s who who per who got together at an early age but only released their first single in 1963, released their last album in 1970, so maybe seven years in total performing, and they were called the Beatles. Um so you know you're quite right to mention if you get to 15 years, you're doing quite well. And so another company, like the company you've just already talked about there, Open Door, had a phenomenal rise last year. I mean, back in April, I think April 13th, you could have bought the shares for $5.13 if it had kept holding for six or seven months. That share price rocketed to $76 and looked like it was going to go even higher. Now, yesterday, you know, we had an announcement, and bear in mind this company's built up a retail phenomenon over the sort of last uh two years, and we've been part of that that process, we've highlighted you know everything that Iran's done for the last probably five and a half years uh since I've been in the space dealing with the company, but certainly from the platform perspective, um you know, we've watched every movement. Um, yesterday's announcement this $800 million of RSUs issued to the co-CEOs, co-founders Dan and Will Roberts, um, effectively put a brick wall to that sort of momentum. And I just want to get your uh your take on on your view on it. Now remember, these RSUs, they're they're four years vested, they've got another two-year lock-in, so these are tied down for quite a quite a long time, but it doesn't appear there's any performance measurements against them, and also they're not going to get any more RSUs until at least 2031. So there's another five years before we see this type of um RSUs issued um again in the future. Just get your your take from a sort of from your experience and professional point of view, it might sort of um you know give give some of the retail shareholders a little bit more to think about.

SPEAKER_02

Sure. I I think it's a much ado about nothing, uh Anthony. I think I I like I'm of the opinion that uh people who perform, uh executives, should should be compensated, well compensated. And um uh what's more is that people uh tend to focus on the trappings of um success. So Dan, I think, has been criticized in the past, mostly in the Australian media, for like buying a beach house in Bondi Beach and all this kind of stuff. The same sort of stuff happens all the time in Canada, uh these in these sort of countries where uh not as much as in the US, but again, like uh it doesn't mean anything. It doesn't, you know, the crit the the criticism uh has no connection or no bearing on how well the company is going to do going forward. And the other thing that I'd point out is that um if you actually run the numbers on when executives uh buy stock uh or are given stock or sell stock, uh oftentimes people will conflate the two and and assume that if they're buying stock, that means they're bullish. But if they're selling stock or you know, or get getting stock handed to them, you know, that it's somehow bearish. And there's no there's no basis in in reality for for that conclusion. Uh if you pulled up the the insider filings for Jensen Wong at NVIDIA over 25 years, um basically he's never bought stock once. He's only sold shares. And so uh you could conclude, according to these critics, that he's obviously very bearish on NVIDIA. And then obviously, you know, you know, the stock just continues to go to all-time highs. So I think, you know, uh the the um of all the of all the uh Bitcoin miners to transition, I mean, uh I would argue that iron's been the most successful to date. Uh so there's a lot of um uh good that that uh both brothers have done, obviously. They come from the investment banking world, so they're not, I don't think they're uh they don't see uh compensation as uh somehow bad. I mean, I you know, so I and I I don't I don't uh you know blame them or you know begrudge them for for uh feeling that way. And so I just I just think it's it's a nothing burger, you know, if we move on uh and we focus on the actual operations of the business and you know continued you know milestones as they as they continue with their build out.

SPEAKER_01

So I think you're quite right. We we did highlight um the sort of both sides of the argument on the podcast last night, and we gave our view, which is like have a look at the bigger picture, guys. You know, we're at the very, very start here. They've got this big deal with Microsoft, they've got another five gigawatts of power to release in the future, never mind what they've got out now, and that's going to put the company in a really good um standpoint from there. But uh yeah, I take I take your view there, and I think uh maybe some of the retailer jumped a little bit making assumptions on not knowing all the facts and all the information, and it helps when you sort of like put it put it across like that, and like well, and I think I mean uh the one uh uh case study I'd point to is Elon Musk, like back in I think it was 2019 or something like this.

SPEAKER_02

He was given this big compensation package, which was later clawed back by this sort of activist uh judge in in Delaware. Um, and yet I remember the day, you know, sort of within the day or two of that being announced, uh, Davos happened over in Switzerland. And I and I remember turning on CNBC that that day, and and the hosts of the the morning show over there were just laughing at because you know, to make the most of this compensation plan, he would have he had to 10x the stock, which he did subsequently. And but they at the time they were like, oh, it's you know, how crazy, you know, like who could imagine such a thing? It's you know fanciful and all this stuff. And so, you know, and and then and yet later on, like people were mad that he had you know done this and it was too too much compensation and all this kind of stuff. You know, uh if if uh these you know, I don't think any iron shareholder will um will uh get mad at the brothers if uh they see a 10x uh in the in the in the price of iron over the next little while. Although I certainly hope hope for more. And I've I've argued for more in the past on this podcaster thing.

SPEAKER_00

Yeah, we do too. And you look at the SpaceX compensation milestones, even more aggressive for Elon. So a good uh case study there. Now, digging

Iron’s NVIDIA Path Beyond Microsoft

SPEAKER_00

into iron a little bit more before we move over to Cypher, Anthony and I have been covering this story. Obviously, the Microsoft contract, the bare metal, that was kind of the go-ahead flagship contract. Since then, we've seen this NVIDIA partnership really deepen. Anthony and I feel there's a lot more than maybe meets the eye here. They've got the power, they've got this strategic partnership, uh, they've got their credit uh accreditations from NVIDIA. Where do you see this going? And do you potentially see uh them cutting out hyperscalers like Microsoft and just going straight with NVIDIA?

SPEAKER_02

I think that's where it's heading, Bryce. I mean, I I I don't know if it's I'd say like Microsoft is in their crosshairs as much as it's the core weaves of the world are. I I think like that's that's sort of where where things are going. But I I definitely see them sort of using their um their grounding in their real estate, their hard assets, you know, their various sites that they control and now building up from there uh with this relationship with NVIDIA to actually get in the game themselves uh and sort of disrupt Core weave, which is, you know, they've done that core weave, and I tip tip my hat to them. I think they've they've done much better uh than I I guess I expected. I sort of I always sort of thought they were in this awkward um messy middle position where they didn't actually control anything underneath them, which is why they went after core scientific and all this kind of stuff, um, and that didn't didn't succeed with that. Um but I I do strategically, I I mean I think uh iron's positioning is is much stronger longer term than than a core weaves. So I I think that's that's sort of the game for them, is that they want to uh you know, they're they're never gonna put uh Microsoft or AWS out of business or Google, but I think they can become uh maybe you know like the the next, you know, the the the the the greatest success in whatever the next tier down is from those hyperscalers.

SPEAKER_01

I think you raised a really good point there. Um, you know, I mean I think if people to sort of like pigeonhole iron now, they'd probably say core weave nebius in that sort of area there, away from most of the other companies that we talk about on a daily basis, like Cypher, Terra Wolf, Core Scientific. But there's maybe an argument because Iron owns its power, owns its land, that it's actually a bit more than core weave and has the potential down the line. And with this partnership with NVIDIA, it it could really open the door to making that step away from that sort of the NeoClouds, the enterprise value companies there, and and and and see where it gets to that way. So there's definitely an argument for that. Obviously, they have to scale up, and I think at the moment now you're getting retail think these contracts can be signed in a weekend when we know they take five or six months to to go through. We've we've had Patrick Fleury on the channel. Six months was the first contract with Terra Wolf. Once you've got that template uh there, it can take a little bit quicker the learning curve through future negotiations. But um, Iron, you know, they've got all the power of coming online and they've got some ambitious um targets to get to over the next 18 months. They want to release another 730 megawatts of power um by the end of next year. Bear in mind they've only got 480 megawatts of power in the AI space at the moment, so that's a big jump, and then they've got the remaining amounts of sweet water coming on, they've got the the Oklahoma site there, and and they and they've got the site in Spain. And they mentioned something about they want to do a big data center down in South Australia as well, in their own neck of the woods.

SPEAKER_02

Right, yeah, and then there's been another uh player uh uh out there in Australia, uh SH uh A Z is the ticker, I I believe, and they just got a big boost down because um the the I forget the guy's name, Leopold something. Oh, yes, the the the Ashenbrenner Hedgephone, yeah, bought a 20% stake or something like this. Yeah, um they they yeah, so uh yeah, there's money to be made out there in Australia for sure. And the and the brothers would know.

SPEAKER_00

Hey, now one more question on the CSP model, then we'll go over to the Colo and Cypher. Uh Anthony and I, as you just said, Anthony, have been looking at Nebius and Core Reav as maybe more direct peers to Iron. You look on their websites at the hourly GPU pricing, the numbers are getting pretty high there. Six, seven, eight dollars an hour for some of the newer models. The iron contract with Microsoft, I think we calculated just shy of $3 an hour over the whole duration of the term. Do you see the actual metrics finances improving uh on a GPU per hour or a value per megawatt basis if they're able to go this full stack route with Marantis, with NVIDIA the whole way up?

SPEAKER_02

I think that's the plan. I mean, it's it's the vertical, vertical integration model, which is always sort of like a, you know, in in time and with scale, you know, they the the the the economics work in your favor uh if you can pull it off. But it's it looks uh more difficult in the in the beginning stages. And and when they really started to really push on this uh NVIDIA relationship, you know, they were doing it mostly out of Prince Rupert, I believe, in BC, um, which was a relatively small site. So I think um I think there's reasons to believe, you know, like with uh with you know with what they own uh and and sort of what's left to kind of uh expand into uh in places like West Texas, for example, like they've that they'll their economics will will improve significantly.

SPEAKER_01

Yeah.

Token Pricing And The Real AI Demand

SPEAKER_01

In terms of the sort of like the model from the retail perspective, obviously more and more people now are starting to pay for AI services. I I have a subscription, I know Bryce has a subscription, I'm sure you yourself Eric has a subscription. Um and and tokenization obviously is coming in in a big way. I mean, we you know we've we've had these packages where you pay a monthly fee and you sort of like get unlimited use. And what we're starting to see now from the AI providers is actually that model sorts of it's gonna be changing, you're gonna be buying tokens for your usage. And so, do you see that sort of where it's gone from like if I use the analogy, you've got a Netflix account where you're paying a monthly fee to watch Netflix, but really it's gonna be closer to an energy contract, the more power you're using, the more you will pay on a monthly basis. So, how do you how do you use that market? Because that's probably the one way how we'll see these hourly rates really start to um you know increase for the providers um in the longer term.

SPEAKER_02

Yeah, I I think the way that uh like when I came on the show uh before, like last year, um, and sort of made the argument for iron and cipher and and all the rest, uh, just like you guys. I mean, I think I think what maybe what we saw then, which now is sort of conventional wisdom, is that uh, you know, there there was just wasn't enough providers like the irons of the world to kind of meet this demand. And now the rest of the world is sort of caught up with that. And and and that's really what took iron from, you know, I got into it at uh, I think it was nine bucks uh last last year, like May or so, uh, to 70, whatever it was, 75 or 70, 77 or something by November. And and so that that's that's sort of the power of the, you know, the the narrative shifting uh and and sort of the conventional wisdom sort of catching up to sort of being early. So now uh and and now we've obviously had this big pullback in all the names, like you know, now iron's sort of roughly half of where where it was like last fall. So the way I like to think about it, Anthony, and and I and this sort of goes to your question, is I think we would all agree, like none of us is gonna use AI any less in the few years, right? It's it's just only going to increase. And so then I think the and and we're sort of at we're the ones at the leading edge or the bleeding edge, right? You know, and so that it's gonna be my wife and then my you know my neighbors and stuff that are gonna catch up in the years to come, which is gonna obviously drive adoption and drive usage and drive. Power consumption. So I I think the question is if if we if we think maybe I don't know five years ahead, if if AI usage 100X is what are the things that that have to support that that are going to perhaps, you know, 2000 X or 5,000 X. And so, you know, obviously, one of the reasons I think why the memory stocks have gone crazy, which, you know, I I haven't, you know, full disclosure, I haven't participated. I wasn't smart enough to catch them this year, is that obviously people see like that's an immediate need uh as the the kind of demand for AI up up increases. So then the question is like, what are the other things? And so that's when we get to your question, I think, is like how you know, obviously there's just gonna be the great demand. So so will there need to be different models for uh power consumption? And that puts certain people like front of the line uh to to get to kind of get that. And I I think that will happen. And then and and then what are the other, you know, what are the other things to fall out from like this AI 100xing? Well, you know, what else has to catch up and then what's gonna be in demand? So, and I'm not you know, I don't have like all the answers yet. I'm like that's that's what probably the the most important questions that I I try to think about, uh walking my dogs and stuff in the morning. Uh, but it's you know, I think it's about things like trust and identity, you know, is gonna become uh you know much more important in in this new world. Uh so what you know, how are we gonna know that it was Anthony Power and Bryce uh McNally who said such and such on a podcast? And you know, are there gonna be ways of fact-checking that and verifying that uh as opposed to just sort of taking it and running with it? Um, you know, so or you know, governance, you know, if we're gonna pass off our you know more work to AI agents to do on our behalf, you know, how do we really, you know, you know, you know, I I love AI, but you know, obviously Collide Code and and and Codex, you know, make a lot of mistakes still. So, you know, where where's gonna be the controls if we're gonna be willing to kind of pass off more and more work to to these agents to you know to do for us? So I think those those are some of the questions that I'm I'm trying to think of because you know that that that's where I think you as an as an investor, like that's where the most money will be made is not just sort of taking like the the conventional wisdom, but sort of like thinking ahead. So iron, you know, iron, so I I I think the challenge for iron and cipher is these stocks, like now they're popular. And when the when you when stocks become popular, um and the and the the initial thesis gets adopted the way that it has, they get they get more dangerous. You know, like you're not you're not buying in at the sort of bargain basement price where you know, you know, there's probably minimal downside, huge upside. Um, and and you get sort of these like violent pullbacks, especially when, you know, in Bitcoin retraces or what have you. So I think the the question that's most interesting, I think, with all of these names is is sort of like thinking about like maybe the vertical vertical integration uh you know uh answer. You know, you know, what what if that happens, you know, what's that really gonna mean? How uh how long will it take for it to play up for an iron? How disruptive is that gonna be for to a core weave or to a nevius or something like that? And are you, you know, are you gonna play it long and short and things like pear trades and all this kind of stuff? So I think that that's uh you know, that's where I'm I'm trying to think about uh is sort of like, you know, what's gonna what's gonna become the conventional wisdom, you know, a year from now or two years from now.

SPEAKER_00

Great point. That's uh some of the questions I think about when I go to bed as well, Eric. And I wanted to say uh you're right about the the popularity of these stocks. What Anthony and I talked about yesterday, a lot of these newcomers, they don't understand the core thesis, they don't have the conviction, maybe they're traders. So yeah, it creates a lot more volatility for us, uh long fundamental investors.

Cypher’s Colo Model Plus HUT 8

SPEAKER_00

Now you just mentioned Cypher as well. They've got a bit of a different approach going the co-location route. Anthony and I are a big fan of this. It's a little more simple, uh, a little maybe easier to set up, less CapEx intensive. What's your update on Cypher? Are you still bullish uh holding shares? And what's your thought on colo versus CSP?

SPEAKER_02

Yeah, I I um I'm still very bullish on Cypher, still own it. Um and uh the third name that I'll throw in there um that I'm also have been very bullish on and continue to be is HUT 8, uh with Ashogana and um on what what they're doing. And I think Cypher and HUT 8 have both been um a little bit more um you know, cards closer to the vest, you know, in in terms of uh not not giving, you know, not not not hinting as much about you know what their plans are, what their big projects are, and the and then letting, you know, you know, whatever the state filings that the mandatory filings that they have to do, you know, that that becomes their their press release effectively, um getting getting uh that news out there. So uh but I you know the stocks have done well. The cipher has always uh being smaller than an iron, um, you know, it's it's had uh you know more leverage, you know, both to the upside and the downside, um, you know, when things turn. But um it's been remarkable to me, like even though um you know all of these names have had some some you know a pullback in the last couple of weeks, for you know, Bitcoin has been has been weak, you know, really for the last couple of months. And yet these stocks have really held in there strongly. And yet, you know, last fall, um, you know, I think there was a wobble, you know, in in Bitcoin starting in October because of um you know an issue on on Binance's platform where there was like a mispricing of a stable coin, and then but then and then a forced deleveraging that happened there. And then that sort of caused this sort of uh cascading you know impact on other DEXs and stuff. But it was like about a month later that iron and cipher started to roll over. And remember, like those tech stocks were really the first uh tech stocks to kind of show like to start weakening. And then it took another few weeks before you saw that sort of bleed over into other tech names and then eventually like the mag 7 start to go down. So I've been impressed with Iron and Cypher that they sort of like held out longer, you know, in this current uh Bitcoin drawdown, um, you know, stick sticking with things, um, and uh until just you know just recently. So uh maybe that's a sign that um, you know, in that in even though there are a lot of newcomers, as you say, to the stock, that there's also a recognition by investors that you know these are more mature companies today than they were six months ago or 12 months ago. Uh they're less sort of Bitcoin uh mining, you know, dependent in terms of the revenues, even though they're those the revenues are still large relative to you know the the new revenue that's still starting to flow in. So anyway, I I think uh you know we'll have to see. Uh I think Bitcoin's had uh, you know, you know, we can talk about this later, but um you know, probably getting to the point where it's gonna start to come out of this really uh stress regime that that it it has been in. And so as it continues to kind of strengthen and move up, you know, I would expect that that would be bullish for the ciphers and HUD 8s and irons of the world.

SPEAKER_01

Yeah, the the metrics haven't been uh great for Bitcoin mining for for a few years now. I mean the halving is supposed to you know occur, it occurs every every four years and you your rewards are reduced by 50%. But we've had things called the mining difficulty, which has basically incurred not one, but maybe another two halvings during that four-year period because it affects your production. So, you know, when I I spent some time as an accountant, I look at the balance sheets of all these companies in the public space who've been Bitcoin mining now moving that power towards HPC. And if you go down to the bottom of the balance sheet, it has one line on there which says accumulated profit or loss for the duration that they've been in business, and there isn't one company in that space that has a profit, they're all in negative territory, which shows you the challenge that it is, and some are significantly high, and some are you know maybe only a couple of hundred million losses, but it's still a lot of money to invest in machinery, in infrastructure to deliver Bitcoin when you've got no idea what the price is going to be tomorrow, next week, or next year, and then you have to come combat with a with a harming every four years, and you're then competing with effectively companies or or play places around the world where they may be tapping into some of the cheapest energy around, making their model look really good, and yours, you know, you're you're just playing catch your you know the global hash rate increases because more machines are probably tapping into stranded power, and the power companies in the US, you know, even if they're only paying three, four, five cents, which is uh towards the lowest area, it's still too high to mine Bitcoin. Um, in terms of in terms of the the the move across there, obviously you've mentioned HUT 8 and we're we're we're fans of Hut 8. We've had Asher on the podcast there, they've had a remarkable rise since that merger of um you know HUT 8 and USB TC about three years ago. And we had we had that Asher on, I think it was like six months after he became CEO and said, you know, tell us how it's things performed. He says, give me another couple of quarters, and then we'll and and and then report on how I performed. And we did that, and we gave him an A plus report because really that company at the merger was a $1 billion company, and more recently it's it's been a $12 billion company, it shows you the growth, um, and those people that managed to hold on to their shares have seen them sort of like multiple as much as the likes of the iron shares or the the sci-fi digital, they've really gone on a on a stretch there. Are you looking at um uh I know you've you've narrowed it to two or three companies. Are you looking at any of the other companies in the space? Interestingly, we do a lot of uh daily analysis on on how share prices have increased over the last year. One company keeps coming up, um uh Keel Infrastructure, they haven't even announced the deal yet, but Ben Gagnon has sort of like probably as big a following on on social media in terms of when Ben talks, everyone stops to listen than probably any of the CEOs at the moment, and he's now said we're gonna sign three deals by the end of the year. That's the end of 2026, they've got three sites, and um, even the Wall Street guys now are putting it into their programmes that they're about to do this. The share price has gone, you know, uh, like uh you know, effectively a six or seven X in the last 12 months. I mean, it's uh it was up over 500% a couple of days ago, pulled back a little bit since then. But are you looking at any other companies in the space there to see if there are any sort of like potential diamonds that you know you could maybe uh see benefiting, or are you sticking to to sort of like the the analysis that you've done on Iron, on Cypher, and now um you know HUT 8 as well, which will probably please a lot of the viewers of this channel because we know we always get a lot of questions in about HUT 8, and they don't want to give out too much information all the time. They do wait for those earnings updates to give you more nuggets of information, throw out a presentation. But what are you what are you seeing elsewhere in the space at the moment? You see anything else that's catching your eye?

SPEAKER_02

Yeah, no, I try to I try to keep up, obviously, um uh with what's going on in the on the newer um entrance. I would say that um you know I was fortunate obviously to get in pretty you know at a at a pretty attractive price, both for iron and and cipher and and HUD A. Um and have been holding them for a while, so have done well. But uh then the question becomes like, okay, do I want to stick with my winners or you know, or do I want to sell them and kind of move into some of these like smaller um you know startups uh and and hope that they have a similar kind of run to what Iron and Cypher do? Or do I want to add to that? But then I would be adding obviously like you know, waiting more in my portfolio portfolio overall to towards you know um other names that have that aren't necessarily worse, uh, but there's like higher correlation, obviously, you know, between all these names. So if one of them catches a cold, you know that the entire sector is is gonna go down. And so do you want to have uh more exposure to those names? And so I guess you know, I I would say, Anthony, like, you know, I I I I was early in it into Carvana when it made the turn, and uh it it was always tough to hold Carvana, you know, through through the the rise. It looks great now after the fact that that it went from, you know, in its before it split, um, you know, the the old prices, it got to a low of three dollars and fifty cents, and then I think in January of this year it hit 487. So 129x from the bottom to the top. I didn't get in at 350. I was like, I got in at uh 15 bucks, you know, and wrote it up. But uh along the way, after getting in to 15, you know, it it it acted very much like iron and cipher, where you know, it was it was not on. I think I think at one point there was like a 69% drawdown in carvana, you know, from from its you know, whatever the peak was to wherever it bottomed. And you know, that you do not feel good, you know. Let me tell me I'm I'm sure you guys have experienced the same. When you see these paper profits sort of evaporate, uh, you think like what a what a fool was I, and you know, and then and then and then maybe you sell like near the bottom is sort of like the the common problem. And then right before it's you know the thing takes off again. And so I I've tried, you know, so my my lesson learned from the Carmana experience and then and even Open Door was is just sort of stick with my winners. And like if I have this sort of longer term thesis, and then and then just sort of size it appropriately in the portfolio. So I haven't just I haven't because of that, I've I've chosen not to get into some of these names like heel. I mean, I'd say the other two that you know I hear, I get a lot of people, you know, messaging me or asking me about the other two are uh S L N H and then um and I would say N U A I are the you know probably more N U AI than any any others. And so uh I've looked at them, you know, I I've like you know debated about jumping into the you know those names. Um to this point, you know, not getting into them probably has been the right thing to do in the sense that uh I I might have gotten in right before like the recent sort of drop in the shares that that uh correlated with the with the decline in Bitcoin. So um I but I I think you know for a new person who's like coming into the space and doing their own research, I mean, it's a it's a totally different uh calculus, I think. And so and I could I could see a lot of reasons why they might choose uh to get into some of the smaller names because they haven't you know been been a part of the train, you know, the iron train or the cypher train and and so forth.

SPEAKER_01

Yeah, I think a lot of people, certainly in the Twitter space, they they follow people like yourself and Mike Alfred, and when they hear you mentioning similar companies, the next thing is Mike's recently got sort of reasonably well invested in in Soluna Holdings, which is the SLNH, and they they've got a sort of like quite a large fan base as well. You know, I mean these companies are small uh in terms of market cap when you compare them to Hutt and Iron and Cypher, uh Soluna's you know, market cap is a couple of hundred million, it's still got a long way to go, but you know what? It does tend to punch above its weights. I like the CEO. Um, you know, he comes and communicates on on social media really, you know, he articulates that the the journey really well, and I think retail they thrive on on information. You know, we we they're so used to now through Twitter, through the fact of what we do on power analysis, we get CEOs on, we get the likes of yourself on and mic on to talk about what's happening in the space, your views, and that information's there, and and I think they just yearn for more and more. And it's like when something doesn't quite go their way, it's like we didn't get the information. Why don't we got why don't we hear them from the company, you know? And I think some of these companies, HUT 8, did a lot of um updates up until recently, and you're quite right, they've now pushed back a little bit. We're not getting as much access to some of their senior team, they're obviously working extremely hard, and so you know there's that side there. But I think that the link with you and Mike, because you were both talking about very, very similar companies, and two or three of those companies you were both effectively buying shares in. I think any company that one of you mentions now, everything one goes over to the person and said, Have you seen what what Mike's doing there? You see what Eric's doing there, you know. What do you think on this? What's your view on this? And I think the Saluna one is a constant story. I mean, I've I've been covering Saluna with Bryce, you know, for the last three years, and um, you know, it's been nobody else is covering me in the space when we were, they were a $20 million company. Yeah, and so we we put all you know the information out there, help people with the due diligence, and now you're seeing you know, people now understanding the team, they're understanding the projects that they're dealing with, more than one project at a time now. They're building up that sort of like um uh business model that they they look like they can exceed, they've got the sites, they've they own their own power now. I mean, you know, not many of the companies we talk about, not even Iron owns its own power. Saloona has behind the meter power, 150 megawatts behind the metre power wind farm in Silverton, Texas. So they're just ticking all the boxes. But as I say, if you don't get the message out there, it's very hard sometimes for these companies to grow. And Saloon have been great at getting that message across. But uh, I just thought, yeah, when when you mentioned SNH, I can understand why you get those um uh uh uh messages. I I don't tend to send messages to people out with their view, we just tend to get you on the channel and ask you directly, and then that way we can see the whites of your eyes when you give them the answer and making sure that it's a truthful one. But uh really take your points on those uh good good to hear.

SPEAKER_00

Yeah, new era is another one. Uh I've covered on the McNally money, and it's a popular one. We're we're hearing a lot about. I just wanted to touch on one thing um as my last question for you, Eric.

Taking Profits With Regime Based Models

SPEAKER_00

You mentioned letting your winners run. You also mentioned uh portfolio size management. A lot of our audience here, they've been in maybe for the last couple of years, they've seen that big run up in some of these names. What's your advice on taking profits? Anthony and I have been pretty consistent. Dollar cost average in, dollar cost average out. I honestly find the days you're bragging, you're pulling up your portfolio, you send it to your buddies, those are the days to sell. The days that you don't even want to look at your account, you probably should be buying. Uh, what's your take on that?

SPEAKER_02

Well, it's evolved. Um I I think um I uh I one one area where I've been spending probably the most amount of my time in the last six months, uh is um I don't think I've mentioned this before when I was with you guys. I developed some um AI models within my own hedge fund, uh EMJ Capital, that was specifically kind of geared towards Bitcoin and Ethereum and crypto. And um the models were like obviously, you know, trying to predict where the price was going of Bitcoin or Ethereum over the next, say, you know, 30. I mean, we looked at all kinds of time frames, but we found like 30 days was sort of like a sweet spot for making a prediction. You go out any further than 30 days, and you know, so much can change, or so much outside of you know, you know, related to Trump or you know, other macro factors starts to come into play and the the the quality of the predictions goes down. And so um I uh so I ended up selling, uh, you know, taking some of those crypto models and doing a deal last year with a uh public stock called SRXH, where they bought these uh AI algorithms tied to Bitcoin and Ethereum, uh in and we in a little uh so we I call that EMJX, sort of like a and the idea was this is gonna be a generation two treasury that's sort of different from the micro strategies of the world or the strives or you know, bitmine inversion. Um, because I looked at all of them and I, you know, these are these are one for one thing, uh none of them were hedged. And uh so they were sort of like almost like triple X uh ETF on the underlying asset. So like when Bitcoin was going up, they you know, MicroStrategy does like 3x what Bitcoin does, but and then it does the same on the way down. Uh and the same with BMNR, with with ETH. So there was no hedging. And they were also like typically like single asset only, like they were only Bitcoin, or they were only Ethereum, or you know, sometimes they get into some of the smaller coins. And so my idea was like, hey, let's let's have a multi asset treasury and let's let's hedge. Uh because it it sort of speaks to your point that um a lot of times when you're dealing with the volatility in a Carvana or a Hut 8 or a you know any of these names, S L N H, um, you are really what what's happening is the macro environments changing. And so for whatever reason, you know, tech stocks go out of favor and then you know price of Bitcoin goes down or uh and then micro strategy follows or or HUD aid or or cipher or whatever. And you're you know you're dealing with like 50% loss. So if you could kind of understand how the how the macro is changing and then you know reduce out, you know, obviously now ideally like right before that drawdown, you could do much better. Because the other way you could do it is you just size it small and just let it ride. And that's a way to do it. But you know these stocks are so volatile. Like it's it's really you know like a 50 like like I said with Carvana, like a 60 I think it was close to a 70% drawdown at one point, you know, wasn't uncommon. And that that that's tough to take you know for any investor, whether you're retail, institutional, whatever. And so uh so anyway, to answer your question, Bryce, you know, we've we've had some success recently with these models with um with predicting. So like on uh at the end of May like uh we built this sort of uh model that predicts like what's what's what kind of regime are we in like in in Bitcoin? Is it a you know bullish regime where like everyone's everyone's excited and the price keeps going up is it a mixed regime meaning it's sort of choppy kind of kind of like what we've seen in the last few weeks or is it a you know full-on bear kind of uh environment regime that we're in uh in in which case the price of of Bitcoin is probably gonna drop and so um the the last time we were bullish is so this this this model that we've been building this year um you know has gotten really good just in the last few months and so uh what it says is that you know Bitcoin was bull bullish from kind of like mid-March to the beginning of April starting then it sort of moved into like a choppy market you know uh from I I'd say like second week of April until uh sort of the end of May and but on uh like May 26th I came into the office and the model said oh boom we just flipped from mixed to bearish and so immediately I like I made some changes and tweaks to the um to the the crypto portfolio that we managed for EMJX uh and then I you know later that day I I made some I made a you know I sent out a tweet basically saying oh by the way you know uh this model that we've developed flipped to um you know bearish now it's we're in a stress environment for Bitcoin at that time that that morning anyway bitcoin was at 77000 and as we're sitting here today it's like you know I think it got as low as 58000 a few days ago uh we're still in a stress kind of an environment but now it's sort of like 62000 I think today so so anyway my you know what I'm saying is that um so my my my thinking has evolved so that the treasury that we now manage as we move like from you know a stressed environment to a mixed environment or to a bullish environment uh I've I've developed a a sort of a system where we sort of size our positions in things like Bitcoin and Ethereum and in names like Iron and Cipher and or Carvana or Open Door sort of appropriately. So you know when you move out of a bullish market you want to take the weighting of those positions down sort of appropriately and sort of wait for like kind of um be you know till you move back uh into that bullish environment to kind of fully size up. And by doing that making those kinds of tweaks along the way uh what what we found through the back testing is you can do much better. So I'm trying to uh evolve from sort of a guy who was just like you know doing everything as you know with my own brain, human brain and just sort of uh you know because I liked all these sort of high flying tech stocks um and couldn't tell like when they were going to have these dramatic like 50% drawdowns just sort of grit grit and bear it you know and get through it I'm trying to you know we've we've evolved to this um you know I think more sophisticated approach where we're we're sort of tweaking things we're being more systematic we're sort of following you know what the data is saying and as we move kind of in these different environments sort of sizing down and then sizing up appropriately.

Treasury Plays And A Hedged EMJX Approach

SPEAKER_01

Makes sense final one for me um is is is you mentioned um uh that's before and obviously we we we saw um an influx of them last year uh coming to the market and a lot of them seem to have fallen by the wayside obviously the Bitcoin price hasn't uh rallied as many sort of like big names were expected I think Kathy Wood was uh suggesting of last year maybe 250,000 I'm sure a target is a similar amount for the end of this year and many other big names were also giving out seriously big targets where it never really got to that point. We saw the hundred and you know uh twenty-six thousand dollars back in October but as soon as it reached that all-time high uh we've seen it tumble to you know to less than you know 50% of that number as we sit today. Two sort of did stand out in terms of strive um and in or in in in terms of uh SATA for strive and stretch for strategy um it looked like they'd found a sort of like um you know a a process for raising capital to buy more Bitcoin and grow and uh but in this recent couple of weeks we've seen uh a pullback on both of those prices what do you have a take on sort of like you know on on how you see those two companies they do seem to be the ones that stand out from the rest of the crowd um they've got very very much similar uh similar um uh uh processes in place there to to drive this and it looks like they you know they're both obviously fan of each other I think Michael um you know talks a lot about Matt and Matt vice versa so they you know they seem to have you know coded up that way there and it's not just about strategies in the space I think if you ask Michael Saylor everyone should be in the space delivering like that he's not there to compete with people he wants as many in the space doing it because he feels it'll only be good for Bitcoin um but what do you think about the two um preferred um share prices at the moment below that $100 mark and at one point I think um um uh stretch was like probably in the $74 mark um how do you think about that is this just a blip do we think we're gonna get back to $100 so they can start reselling at that point to to raise more funds for uh capital or do we think these dividends that they're paying which are double digits and increasing by the day could be a sort of like potential um uh a dent in the armors to to coin well I think I think they're uh like both smart approaches uh I think there is merit uh to them uh and and there there is a place for that type of product in the market and I I do agree with I think both I think both of them have made this argument that um the bear case against them is like really if if Bitcoin uh stays weak the way it is you know for a significantly long period of time i.e like four years or more uh and so the bears like to say you know uh if the price stays low they're they're gonna be out of business they can't afford it and and so and so forth and I mean that I mean there is a there's no like there there is a come comes a time when that that would be true uh but it's sort of uh you know a number of years away um so I think that um uh they there is a market for for their approach you know what I'm what I'm trying to do with uh EMJX as part of uh SRXH is different I think where obviously it's a it's a more uh hedged approach it's one that's built on uh you know developing models that that tell you in advance of uh you know where the prices are going.

SPEAKER_02

And you know uh I I can't you know as a some as somebody now the deal is closed just like a couple of weeks ago so I can't just sort of like off the top of my head like spit out performance numbers and and and so forth without kind of you know getting all the blessings in advance and and so forth uh by the powers that be uh on the board and such. But uh obviously like with my public tweets like the numbers have been good and so which you know which means like we've significantly like outperformed Bitcoin itself or any of these other um gen what I call gen one kind of treasuries that are just sort of like these more like 3x levered plays on it. I think uh so like over time you know think you know thinking like an Azure you know like we'll we'll reveal like everything to the world and and we'll be judged by that and and some and I've gotten some criticism just in the last few weeks like I don't tell everything all at once and open the kimono and you know uh you know make a copla for that um but you know eventually everything will come to light. But I I think there are lots of interesting ways though that you know assuming that I am right assuming that uh we we do have an edge in sort of predicting where the price is going I think that could be very valuable to like you know a strategy uh of the world or or or others uh and so you know I I would uh hope and and uh I'll do my my part to try to have those conversations because as somebody who is interested in Bitcoin and in iron and cipher and and all the rest uh you know there's there's there's a there's a way that all of this sort of comes together crypto you know and AI you know they they go in hand in hand uh as more AI agents do more work in the world um it's good for Ethereum I think because that which it will handle more and more transactions but it's also good for Bitcoin because Bitcoin sort of will go will sort of become the the collateral of the world you know sort of pristine collateral that uh that this new digital world uh will best um uh appreciate and use rather than something like gold or something like that. So um and and so if if I want to see that world happen and I think it makes sense like ideally I'd like you know I want I want strategy to succeed. I want Michael Saylor to succeed very well. And I think um answering his critics you know with with the more hedged approach is is sort of like another way beyond just the the dividend approach that they've that they've put out there and strive has put out there to kind of help help them. So that's how you know I would like to try to help uh make a dent in in this world uh is sort of assisting players like that. I and I think over time then you know you I think what we'll we'll naturally see is like why would you just want to you know basically own a a passive uh beta ETF like like an iBit or like Kathy Woods you know copycat version of that what that that she offers and you know 10 other people offer which is just sort of mimicking or you know the price of Bitcoin when you could have um another asset that you could own that would be you know sort of better performance over time less drawdown you know during during the down periods that so that that you know that's that's what what gets me excited that's what what what I'm trying to build. And I think you know assuming that we build it you know there there will be people out there that that want to use it and and for their own benefits.

SPEAKER_00

Yeah makes sense. No it is all converging robotics ai bitcoin crypto it's all coming together it's an exciting time we've covered a lot of ground and Drake let's get let's get Drake involved World Cup Drake yeah everything's going on uh we've covered at to that point I guess a lot of ground here today Eric everything from Drake to soccer to stocks uh any closing thoughts if people want to learn more about emj capital where can they do that and thanks so much for coming again.

SPEAKER_02

Uh yeah so emjcapital uh Ltd is is the website for for my uh hedge hedge fund the tech focused hedge fund uh emjx.ai is the website for the the Gen 2 Treasury which is now part of SRXH so you can you can follow along uh for news from from SRXH about what's what's happening with that.

Event Horizon IQ And Where To Follow

SPEAKER_02

And uh the other new business that I've spun up recently is called eventhorizon iq.com where we're we're also taking we found that some of the AI models that we built for predicting the price of Bitcoin actually amazingly they do a good job of predicting uh the SCOTUS decisions we just went like six for six in predicting last week you know how the Supreme Court would come out and and and make you know make decisions on six of the cases that they announced in the last in the in the last week or so uh the models apply to you know uh you know predicting whether Drake's gonna be the number one artist you know of the year and things like this. So uh elections uh it's you know election calls it starts starts to bleed into some of the what the prediction markets have been doing up until now except everybody sort of thinks that the prediction markets oh oh they're so smart because of the wisdom of crowds well actually the crowds are pretty dumb sometimes and and I I've you know what what I found in with the Event Horizon IQ is that uh AI is often uh further ahead than even the crowd. So um it's gonna be interesting to see as you know again like I go back to this idea if AI is going to 100x you know what are the things that are going to 1000 X you know 2000 X. I think that's that's where we we can all you know probably make some money if we spend some time you know thinking about that uh before we go to sleep at night.

SPEAKER_00

Yeah so strategy watch out polymarket sounds like uh you're in the crosshairs as well there. So Eric you're a busy guy thanks so much for the time always a pleasure uh for all the American viewers happy 4th of July weekend we'll be back here on Monday talk to you guys then