Derek Hui

8-figure founder, 4 industries deep. YouTube + Substack about cutting your own path through life 🦉

[Jay Yang @Jayyanginspires]

Opportunities flow through people.

Treat every conversation like an audition.

[AvantPrince_ @AvantPrince_]

Grit is your key to the life you want

It doesnt matter how gifted you are if you are a weak little coward psychologically

My resolve is unbreakable

That is why I am unstoppable

[THE BITCOIN PHARAOH @thebtcpharaoh]

What Comes Out of the Kiln
You don’t prove gold by weighing it. You prove it by burning some.

Around 1350 BC, a Babylonian king named Burna-Buriash sent Pharaoh Akhenaten a complaint that survives on a clay tablet: the gold Egypt had shipped him went into the kiln, and less gold came out. Egypt was the gold superpower of the Bronze Age — “in my brother’s land, gold is as plentiful as dust,” King Tushratta of Mitanni wrote to Amarna — and none of that mattered at the moment of settlement. Babylon did not extend alliances, brides, or credit against Pharaoh’s word, and not against the size of his hoard either. It assayed every shipment: melt a sample, burn off everything that isn’t gold, weigh what remains. The fire was the rating agency of the ancient world. The hoard in Thebes could be infinite; the only number that counted was the weight after the fire.

Last October, S&P became the first major agency to put Strategy through its fire, and what came out was a B-. Junk. The rationale named four impurities: narrow business focus, high bitcoin concentration, low U.S. dollar liquidity, and “very weak risk-adjusted capital.” That last phrase deserves translation: in S&P’s capital framework, bitcoin is deducted from equity entirely. The 843,775 BTC on Strategy’s balance sheet — roughly $52 billion at today’s price — counts, for that calculation, as zero. Not discounted. Zero. The treasury was marked at nothing because, in the committee’s kiln, it had never been melted.

Today’s 8-K is Strategy running the assay itself. Between June 29 and July 5 the company sold 3,588 BTC — about 0.4% of the stack — for $216 million: 1,363 coins at an average of $59,256, then 2,225 more at $60,773. The dollars went into a USD reserve now standing at $2.55 billion, against a new board policy of holding at least twelve months of preferred dividends and interest in cash at all times. #Bitcoin moved about a thousand dollars on the headline and had recovered most of it by afternoon. Seven days, a fifth of a billion dollars through the furnace, and the market barely noticed the heat. And that was the whole point.

The uninformed take on X is capitulation — Saylor broke the never-sell vow and is dumping at $60K what he paid $75,476 for. But read the sequence the way a credit analyst would. June 29: a published framework with a minimum-reserve policy, a fenced $1.25 billion monetization program, and a 12% coupon on $STRC. July 6: a disclosed, orderly conversion of collateral into dollars, executed inside the fence, with the reserve replenished and the tape intact. Line those up against the rating rationale and each answers a clause. Low dollar liquidity? There is now a policy floor on dollars. Collateral that can’t be trusted to become cash? It just became cash, in size, at a two-and-a-half-percent spread between tranches, without breaking the market it sold into.

Write the costs in the assayer’s own ledger, though, because the fire is not free. The sample is consumed: 3,588 coins are gone from the hoard (for now). But read the loss line — the 8-K books just $0.9 million of realized loss, because Strategy sold near-the-money lots at roughly cost, not its $75,476 blended average. The metal came out pure and the ledger barely moved; the price of this assay was the stack getting smaller, not a fire-sale loss. The 12% STRC coupon is the rate a lender charges while he still doubts your metal. And an assay proves purity, not abundance: it does not fix mNAV, it does not reopen the equity machine, and just over a billion of the authorization remains — if the doubt persists, the kiln runs again.

This was a demonstration, not a liquidation, and demonstrations are only worth what the audience concedes. Now we watch for three things: 1) Whether S&P’s next review still contains the words “low U.S. dollar liquidity.” 2) Whether sales stay inside the $1.25 billion fence while the reserve holds twelve months. And 3) whether proceeds shift from paying coupons to repurchasing preferreds below par — $STRK is the one to watch: near $63 against a $100 liquidation preference, an 8% coupon running at a ~13% effective yield, and a conversion right into $MSTR sitting deep out of the money with the common down two-thirds on the year. Retire it there and you extinguish a hundred-dollar claim for sixty-three while cancelling the stack’s only equity-dilution option, cheap. That is the difference between feeding the fire and profiting from it.

Burna-Buriash never doubted that Pharaoh had gold. He doubted what would come out of the kiln. Strategy just ran the melt itself and published the weight — and the assay proved more than purity: it proved the fire could be lit at will, for a rounding error, nine hundred thousand dollars of realized loss to turn collateral into cash on demand. Whether the men who mark bitcoin to zero can read a scale — that’s the next letter.

[AvantPrince_ @AvantPrince_]

Anything that you let govern you or impede your aggression becomes the master of your legacy

[Kori Wilson @mskoriwilson]

The only goal in life is to die empty.

Having used every gift and talent that was given to you.

And not one less.

[Reads with Ravi @readswithravi]

A reminder from Poems & Prayers by Matthew McConaughey:

“So much of life seems to come back to courage, doesn't it? Being willing to go one more step before you quit. One step deeper into your relationships, one step further in being faithful to yourself, to your God. What if everybody took one more step to salvage their marriage, to secure their own character, to not sell themselves short? One more step by enough of us can change the world.”

[Justin Skycak @justinskycak]

Every time you practice something correctly, you lay another brick. One brick doesn't seem important, but after thousands of bricks, you've built something amazing.

[AvantPrince_ @AvantPrince_]

I have no doubt my future is incredibly bright; I'm the only person who is going to write it

[Justin Skycak @justinskycak]

One of life's great pleasures is becoming the person your younger self would have looked up to.

[Derek Hui @everythingderek]

@DylanLeClair @NYCMayor 👏🏼

[Justin Skycak @justinskycak]

Potential is the most overrated asset on Earth. Potential doesn't build companies. Potential doesn't write books. Potential doesn't solve problems. Output does.

[Justin Skycak @justinskycak]

Your bottleneck is sometimes the place where your excuses have the best vocabulary.

[Orange Book 🍊📖 @orangebook]

Confident people are just people who consistently kept the promises they had made with themselves.

[Alex Hormozi @AlexHormozi]

What happens when you die:

They divide up your shit.

They summarize your life in 500-1000 words.

People who knew you less say sorry to people who knew you more.

Everyone eats, drives home, and wakes up the next day and goes to work.

Whatever you’re worried about won’t be in those 500 words.

You can dare greatly or not at all, but you’re gonna die either way.

Might as well squeeze every motherfucking drop out.

[Derek Hui @everythingderek]

@swissBTCmaxi @metaplanero @DylanLeClair Facts

[Chamath Palihapitiya @chamath]

https://t.co/vPrPSUjTJG

[Derek Hui @everythingderek]

@EneaDenkt Yes, please share more

[Derek Hui @everythingderek]

@chcbearsfan Good work on the clarity. As a shareholder, still great to see treasury expansion even though CEBE is flat as in the future this provides a wider and stronger foundation for future endeavours from the company.

[Reads with Ravi @readswithravi]

Marc Andreessen on the power of relentless action:

“The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think.”

[Jay Yang @Jayyanginspires]

This is the way