#18 High-Yield Infrastructure: How Bitcoin Credit Creates a New Asset Class

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Welcome to Drilling into Crypto. I'm your host, Mohammed L.
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Mass Redi.
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Every week I speak to the leaders that are driving
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the global financial revolution. Drilling into Crypto puts the spotlight
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on the importance of crypto assets on energy markets and
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on global monetary policy. Today we have Benoir Vincenzi of BTSF,
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where they provide bitcoin native financing to mining operations and
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infrastructure projects that secure and expand the Bitcoin network. Drawing
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on twenty five plus years of institutional banking and asset
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management experience, Benoir has worked on billions in financial asset
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evaluation and managed complex regulatory programs across European frameworks and
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emerging crypto regulations. Benoa's focus is on advancing Bitcoin's evolution
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from store value to a complete monetary system through productive
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capital allocation that creates bitcoin native yield for institutional investors.
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Benoir serves as a strategic advisor to fintech and digital
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asset ventures, navigating regulatory transformation and building compliant frameworks for
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crypto assets. Thank you, ben War for joining us on
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Drilling into Crypto.
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Thanks for having me. I had a pleasure to be
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with you.
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It's my pleasure thank you for joining us on drilling
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into crypto. You know, for those who don't know you,
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i'd like to know about your journey into bitcoin and
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you know, how did that begin and what were you
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doing before finding bitcoin?
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Sure, So my background is almost thirty years in in finance.
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Finance is a broad sector, but personally I was working
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advising and investing in the banking industry. I spent about
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ten years on the South side working for big investment banks,
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researching and advising large financial institutions. That about ten years
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on the byside, and a big chunk of that was
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in the years after the two thousand and night financial
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crisis doing distress bank restructurings and turnaround in Europe, essentially
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buying broken financial institutions, fixing them and selling them and
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doing the same with credit portfolios. So that's how I started.
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And then I first heard about bitcoin about really seriously
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conversations around twenty twelve twenty thirteen, and I found that
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super interesting at the time, but I was deep in
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in U work and I frankly didn't have time the
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bandwidth to properly spend time on it. And that changed
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when COVID hit in early twenty twenty because suddenly I
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had time, so I went down the rabbit hole properly,
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you know, the cryptography, how we can actually works at
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the prococo level, socioeconomic, all that good stuff. And at
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the same time I really started reading Austrian economics again,
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which gave me a completely different lens on money and credit,
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which is really the raw material that I had been
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working with all the time. And then in late twenty
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twenty four things clicked together for me. I had a
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kind of a Eurequer moment, essentially built on three realization.
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One is that the world absolutely needs an alternative to
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the FIAT system, maybe not to replace it, but at
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least to operate alongside it. Second is that bitcoin is
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the only digital asset that has genuine monetary potential, you know.
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Everything else is either security or frankly a casino chip,
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you know. And the third one is that you know,
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the existing global financial system is really not fit for bitcoin.
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It's not going to do that fast enough. And so
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we needed two and we do need to build really
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bigcoin native infrastructure from scratch, and that's what led us
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to create BTSF.
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So basically, the moment you realize that bitcoin was going
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to be your life's work. Is that moment when you
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realize that the current pat system seems to be flawed
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or that socioeconomic construt of the world is not there
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to a certain extent, it was was that really the
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basis of that transition from you know, legacy finance or
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or financial traditional financial services into the digital asset landscape
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and more specifically bitcoin. What was that moment that made
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you realize that, you know, this is life's work, this
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is what I want to do.
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Well, you know, I think it's It really is a combination.
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At the time I was work, I had just been
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advising a financial services group servicing the crypto industry.
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Spend a lot of time.
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Looking at the needs and the future needs of that industry,
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and and then looking at what the financial systems institutions
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of various kinds banks, money, electronic money institutions such I
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could and could not do. And I was working on
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a transaction to potentially buy a bank and turn it
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into a at the time you know, digital asset friendly bank.
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And I realized when doing this that.
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You know, the real core purpose that a bank should
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be fulfilling is to channel capital to you know, productive sectors.
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Of one form or another, and that.
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The industry, the banking industry, both in terms of operations
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but also in terms of regulation, was not going to
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be able to do that.
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So that was one thing.
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The second and it really really happened at the same time,
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is like we I think we're all very aware of
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what's going on in the world and discontent with you know,
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the infrastructure that we have been working on, we have
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been building on or operating under or you know, the
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well since the nineteenth century, eighteenth, nineteenth century, and you
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can see, you can see.
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That discontent everywhere.
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And when you think about it, you know, you can
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trace that back to money and what it is and
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who controls it, and you know why it leads to
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I mean, the discussion around inflation being the silent killer,
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about you know, being a tax that's well known.
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But you can extend that to what's happening at.
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The political level and geostrategic tensions, et cetera, and fundamentally,
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you know, there is an argument in which I personally
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believe that you know, if governments did not have the
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power to print money, and if the stockhof money was
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not infinite, we would see a lot more accountability from
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you know, the governing structures if you want it if
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you don't call it that way, or from governments, and
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so there it's it's that combination. And I had, like
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a lot of people, you know, I said I was
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involved in bitcoin or I started really going down the
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rabbit hole in twenty twenty, Like a lot of people,
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I did spend time on bitcoin and then looked at
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you know, the broader and was involved in the broader
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crypto industry, the smart contract platforms. But these are really
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you know, a digital transcription of you know, existing assets,
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of existing flows. Economic models grant it, not not completely,
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but they do not provide an alternative what I think
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is the real problem and the the way to solve it.
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And so for me, you know, bitcoin is that only asset. Really,
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it really is. And so that's why, you know, when
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that realization came about, I did not even think about,
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you know, doing this with say stable coins or something
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like this. For me, we had to go back to
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the bare bones, what is the problem and how can
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we fix it?
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And so that meant.
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Going to bitcoin fully, completely, unashamedly, And that's yeah, that's
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the that's that's how it came about.
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And being in a banking and finance background and having
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having that extensive experience with you know, the market, especially
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with regards to money and money flows and the efficiency
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of money itself, the inflation aspect that erodes purchasing power
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over time for institutions, corporations, and even individuals. When you
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have you know, cash just sitting in the bank and
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you know, I think it was the author of which
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that or that cash is trash. You know, he always narrative,
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which is true if it's just sitting there. So how
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do you how do you see this adoption? Because there's
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been a lot of uh, there's there's been a trend
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within the market.
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Especially on public markets with regard to building.
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Treasury strategies around digital assets. Uh. One of the biggest
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one is micro Strategy or today Strategy with their bitcoin
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treasury uh allocation that they've transitioned into a few years ago. UH.
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But bringing this to family offices, institutional level, private public
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corporations within you know, traditional industries, how how does how
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do you see corporate treasury adoption taking place? You know,
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and then there's the risk management uh issue that comes
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into play, and you know, these companies or industries or
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institutions that have not adopted blockchain or cryptocurrency technology before,
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how they would you know, set up and transition into
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that base for their treasury strategy. So I've been really
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focused on treasury adoption for corporations within the bitcoin and
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bitcoin mining landscape, but I'd like your thoughts on corporate
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treasury adoption in bitcoin.
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Yeah. So look, a lot a lot to unpack on
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in what you said.
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But you know, cash or any any valuation of money
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is based on interest rates.
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Uh, these this is the.
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Core central action and the problem that we have because
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this then, you know, h.
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Effectively directs where capital goes. What is the cost of capital?
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What is the value of a project? Is a project
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economic yes or no? Et cetera.
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The problem with the Fiat system is one of the
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problems with the Fiat system is that this core measure
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is completely skewed, right, So you have a lot of projects,
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a lot of capital which is being channeled to project
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that appear economically appealing, but in reality they're not. And
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I've seen that firsthand doing with dealing with the distress.
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So that's that's the first thing. It's very important to
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understand that actually or this aspect that you know, the
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price of money is fundamentally skewed in the fiat system.
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Now, as far as.
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Bitcoin treasury adoption, I you know, I think it's it's
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a great first step. Kudos to Michael Saylor, to Meta
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Planet and to the others that have made bitcoin acceptable
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to the world. You know, and you're seeing big leaders,
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you know, JP Morgan, black Rock and the others that
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are changing their tune. And you see also, you know,
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governments changing their tune about this. And I think a
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lot of that comes from the amazing work that Sailor
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started doing. Now going back to the core, believe that
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big cooin is has genuine monetary potential and that the
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world needs it. You know, everybody knows kind of the
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three or aspects of a monetary asset. You know, you
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start with a store of value, medium of exchange, and
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then a unit of account. Now Hayek or roth Thought
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or et cetera will tell you what actually it starts with.
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A medium of exchange, which yeah and so.
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But but the treasury companies really are doing great work
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to make bigcoin acceptable as a store value.
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Our mission at BTSF is.
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To make it to support its evolution as a medium
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of exchange the way we think about it. You know,
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credit makes money flow in any monetary system. Credit is
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what transforms a store value into a medium of exchange.
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And we think that bitcoin needs this, right, I think
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we're solving for interconnected problems that effectively, you know, answer
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part of your question.
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The first is.
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We're channeling bitcoin capital to the operators who actually secure
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and grow the network, right the minors, the infrastructure builders.
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These people earning bitcoin and they should be able to
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bore a bitcoin right. The second and going to you
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to your point, we're creating real native yield for bigcoin
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holders right now. If you hold bitcoin and you want yield,
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you know, your options are not great. You've got centralized
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lenders who re hyperthecate, You've got defied protocols with small
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contract risk. If you are a yet investor and you're
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kind of in between, you may be tempted.
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By the narrative of.
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Some treasury companies that say, hey, we're effectively creating leverage
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and we're calling that bitcoin yield. What we're doing is
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we're offering real yield. You know, yield is nothing more
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than a combination of the time value of money and
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credit risk. In any asset, in any monetary asset, Bitcoin
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doesn't have it really yet.
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At least not for the productive sector. So that's what
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we're doing.
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The third one, and the third problem that we're solving,
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I think in doing this is that we, as I said,
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we're supporting really the evolution of bigcoin from sort valued
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to medium exchange. And you know, it means that whatever
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capital is being channeled and employed within the bitcoin network
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does not need to go out of it. Right by
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doing this bitcoin the domain, it's a credit to bigcoin
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earning companies.
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And the fourth one, which is really really important.
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It goes beyond what you were saying, but it's really
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important to us, and we want to support the centralization.
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I mean, we're focused on the small to the medcap minors,
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for example, the ones that don't get a term sheet
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from JP Morgan. I think, you know, when you look
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at the evolution of the bigcoin network, you know, a
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few years ago, the top two pools were like thirty
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percent of the global hash rate. Right now you're close
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to fifty percent. The four largest pool own you know,
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two thirds of the global hash rate.
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I think if we want if we.
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As a as a as a community want to make
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sure that Bigcoin succeeds. We need to really spend time
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thinking really hard about how do we ensure security and
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decentralization and and and part of our mission is to
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make sure that this happens by working with the small
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to mid cap miners, by working with the small.
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To mid cap pools as well.
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You know, how can we support you know, the long
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term viability of bitcoin. That's a really important part of
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our mission. So treasury companies will con and treasury adoption
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will continue. That's fantastic, it needs to happen. But naturally,
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the question becomes once you have that, what do you
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do with your big point? And like any treasury, like
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in any monetary system, you know, it's a question of risk,
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appetite and where as the wholder of the big point,
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what you want to do? You know, what risks are
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you willing to take? The way I think about it
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is no different from you know, any yet treasury. Some
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people will keep a bit in you know, in in
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in the bank account lack a vert word, just because
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they know that they're going to have needs, and then
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they will also put some in short term opportunities and
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others uh and and uh, and some other capital and
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long term opportunities. And that's where we that's where we play.
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You know, we are really ah, we are really channeling
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capital to productive users. It's more like, I mean, we've
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got different products, but that's more medium to long.
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Term capital for the infrastructure builders.
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Yeah, that's I think there's a massive gap within It's
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massive for the industry, but there's a big gap gap
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within the bitcoin mining industry for the small to medium
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sized miners that are looking to deploy infrastructure. And does
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your lending support infrastructure bills or does your lending lend
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against the existing bitcoin or do you lend against future
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hash rate? Where do you see that this lending could
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be put to more productive use? Because I know personally
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and as our company also operates in the energy to
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compute services side, we know of many new entrants into
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the bitcoin mining space and even some looking at it
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from a portfolio optimization strategy where they can allocate capital
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towards bitcoin mining specifically and earn high yield or invest
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into high yield digital infrastructure using bitcoin as the yield
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and the upside right as long as you can hold
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it long enough. But do you see an allocation of
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lending towards new buildouts that are backed by hash rate
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or infrastructure itself, or is still the industry that you're
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in looking at the risk appetite only direct exposure to
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existing bitcoin holding because you know, in order to fuel
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the industry right and allow the infrastructure to continue to
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build out, I think the industry needs a lender that
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can support new builds and collateralize new infrastructure versus bitcoin holdings.
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Because there's and because the only reason I'm saying that
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is because there are new entrants coming in that don't
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own bitcoin but want to contribute to the network.
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Yeah, yeah, you're look, you're you're absolutely spot on.
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What.
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Yeah, there's there's a lot of new entrants, a lot
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of the entrance that certainly I see our people that
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will do effectively bitcoin collateralized fiat lending. So it means
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you need to own bitcoin and you're boring in fiat.
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That's not where we play at all.
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So we.
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Definitely fuel existing we or support existing We support build up,
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and we support so build up in two forms. It
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can either be completely new operation or it can be extension. Fundamentally,
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what it means is that you know, at the Corvette
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you are monetizing. We are monetizing hash rate, you know
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energy hash rate.
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But however you want to.
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You think about it, that's very very important. So two
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important aspects. One, we do on purpose support new build,
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be it completely deno new or expansion.
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Second, we are.
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Lending, and it's very important we are lending in bitcoin
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two bitcoin operators, and that is that acts a little
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bit as a truth filter, you know, a lot because.
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Because it's better as well. Exactly so, if a company.
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Has as a business model, uh to whose business model
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is to mine bitcoin or whatever they're.
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Doing, you know, to where where they are going to get.
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Their revenues in bitcoin, you want to make sure as
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an investor, you know that actually that project makes sense
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economically in bitcoin, not in fiat. You know, and you've
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seen we've seen that in past cycles where people were
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kind of get got the false idea of you know,
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the true economics of a of a project a bit
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like what's happening in the fiat system, because they were
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looking at it from different angles. Yes, and dollars looked
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great in bitcoin maybe not so great, right, but it's
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also better for the borer because look at what's happening now,
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you know. Yes, over time, as big cooin matures and
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it becomes more of a medium exchange, the volatility is
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going to decrease, et cetera. But right now, if you
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want to build a mining business, I think you know,
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you need to think really hard about, you know, the
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structure of your liabilities, because a lender will a lender
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doesn't have the upside of an equity investor. A lender
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will measure you know, it's exposure depending on whether they
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get repaid every day, month, whatever it is. If you
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are in a position where yeah, bigcoin certainly drops thirty percent,
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like we've seen, you are at risk of the lender
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saying you know you need to do something about it,
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and it may not and it has got nothing to
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do with your cooperation.
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Uh you.
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So you know by us landing in bitcoin, if you know,
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bitcoin to us d drops it doesn't matter. What matters
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really to us as a lender is that you are
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the best operator possible with a capitule that we give
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to you. So it's a it's a It creates a
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healthy relationship everywhere.
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Going within the ecosystem and on the network, which is
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exactly earlier is to keep the money flow within with
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within the network in order to exactly aspect of medium
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of exchange.
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Absolutely, that's exactly it.
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And so with that in mind, you know, we we
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we've built a team that has people that come from
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different different industry we not industries, but with different experience.
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So I explained what my background was. But you know,
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we have we have one of the quarte member has
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been a minor since I believe twenty twenty sixteen. Another
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one has been operating a pool for the past five years.
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Another one has been building you know, blockchain system for
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bankings for for for banks. We all come at it
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from you know, from different different angles, so we can
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really maximize you know, what we know about the industry,
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what we know about the about credit, but also what
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we know about the you know, technical aspects. So we're
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we're starting BTSF with essentially two types of product.
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One is.
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Effectively, you know, almost like private credit structured finance type
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of of of loans. It's four miners that typically will
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want to expand, to buy a new facility, to uh
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build a new facility, build a new facility, expand and
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you know, typically then that collateral uh, you know, the
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way we look at the their businesses.
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You know, what kind of assets do are they are
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they looking to buy?
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So typically it will be you know, there will be
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some real estate, there may be some energy contracts or
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energy assets. They will then be the machines and so
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therefore what compute power they and deploy and what is
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going to be the profitility of this?
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What assets? What other assets do they have?
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So we collateralize all of this and we look at
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we take every thing into account when we under right
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alone and the second one, but that's more for like
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professional miners. But you know, as part of the mission
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that I told you about focusing on decentralization, we also
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have a completely automated product that we're building that is
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effectively revenue based and that is for you know, yes,
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the small miners, but it goes down to the pros humors,
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the guys that want to have you know, one, five, ten,
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maybe one hundred machines, and we can we can channel
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capital to.
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Have those guys increase their capacity, and we are taking
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we're taking we're taking a share of revenues effectively, and
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that that's beautiful because.
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You know, revenues go down because there's a compression in
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half prid because you know whatever, well that this is
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something that this is a risk that we take. But
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they have increased resources to uh to effectively you know,
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more machines, and then so doing we have it gives
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it it mm hm, it gives uh, it creates where
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it facilitates access to mining to the small guys, and
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that's really really important.
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Increase you know, the I mean, the barrier the entry
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into mining is actually increasing, it's not it's.
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Not lowered by any way.
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Shape with the larger institutional bitcoin miners building at scale,
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you no longer as a retail investor have direct access
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to build your own site one because it comes down
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to the infrastructure and know how of operating such infrastructure,
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but also access to energy is not ready available for
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small to medium sized deployments at a proper at an
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economic rate in order for you from a you know,
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accounting perspective, from a P and L perspective to be
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making a profit. So that barrier to entry is definitely
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a problem for retail miners or even private investors that
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want to enter this asset class. And it's refreshing to
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see people like yourselves that are building in this space
427
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that are lowering this barrier to entry and allowing this
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digital infrastructure to be turned into an asset class that
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you know, for me, it's it's incredible because I also
430
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come from a corporate finance background and transitioned from finance
431
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into into energy finance and then bitcoin mining from there,
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and I realize the exponential value that you can get
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off of.
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Owning the infrastructure.
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But even as some one who owns machines or minors
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operating them at the right time, making sure you have
437
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the right efficiency and long enough to take advantage of
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the full or as much of the cycle as possible,
439
00:32:16.559 --> 00:32:22.599
you definitely see at least two to three times returns,
440
00:32:22.640 --> 00:32:26.200
you know, within a normal cycle. But then you have
441
00:32:26.319 --> 00:32:29.839
the upside that's unaccounted for that you know it's simply
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00:32:29.880 --> 00:32:34.400
forecast and predictions, but looking at historical trends and how
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bitcoin performed post having events, you hold your bitcoin long
444
00:32:39.359 --> 00:32:43.160
enough and let's say a horizon of five years, you
445
00:32:43.359 --> 00:32:49.440
could potentially see you know, three four x on on
446
00:32:49.640 --> 00:32:53.680
your investment if you don't use the bitcoin to pay
447
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the power bills. But a lot of people I've seen
448
00:32:56.960 --> 00:33:00.319
they've mind bitcoin sold bitcoin to pay the whole distinct
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00:33:00.319 --> 00:33:03.680
fees or power bills and eroded all of their upsides.
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But those who have not done so have actually broken
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even during you know, a cycle that they were involved
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in where there was a crash or done two times
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their money if they held their bitcoint long enough post
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crash or post head. So there is that gap within
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the industry and I like to see it turn into
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an asset class. But if you had, you know, twenty
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seconds to spread a message or say a word to
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the audience, what would it.
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Be, right?
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So, I think the masters I would have is defining
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number one. The world really needs bitcoin number two. Therefore
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we should I think I would encourage all the builders
463
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to think about what they are doing and how they're
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doing it in the same way that bitcoin operates. It's
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how do we maximize our individual goals in a way
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that maximizes.
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The value of the asset or the community.
468
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That was I think one of the magical things about bitcoin,
469
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and we should all keep that in mind. We are
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doing it and the way, and we are going to
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be the more successful if Bitcoin as a whole becomes successful.
472
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That's how we think about what we're doing at BTSF.
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This is our mission is not to build, not just
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to build a great business. It's to contribute to the
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success of bitcoin, and I would encourage everybody to do
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the same.
477
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Amazing Well, thank you Ben Well for being on this show,
478
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sharing your message and spreading the word on bigcoin and
479
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this new asset clast that we're all building together under
480
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the on the infrastructure side, which honestly for me is phenomenal,
481
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especially when you put together the whole value chain from
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energy to compute and capture a digital energy asset clasts
483
00:35:16.079 --> 00:35:20.000
never existed before that. Now you know, people like yourselves
484
00:35:20.000 --> 00:35:24.440
and btst are providing access to that. I do agree
485
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the world needs the world of at least the world
486
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of finance and money needs bitcoin at that they're released
487
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two uh, you know, provide this equitable socioeconomic structure that
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we all need around the world. And to also you
489
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know bring in this this the the inclusion of finance
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around the world and to build equitable energy systems across
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00:35:54.880 --> 00:35:58.199
you know, communities. You know, this goes down to community level,
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and I'm sure you've seen Store is about communities building
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their own energy to bitcoin mining infrastructure in different parts
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of the world and how that's positively affected the community economics.
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So this, you know, having someone like to focus on
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small to medium infrastructure, which I've had a lot of
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experience trying to convince larger lenders to focus on the
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space space or to open the department that focuses on
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small medium infrastructure, because from a business perspective, it requires volume.
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But from a fundamental perspective, they're strengthening the network. They're
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strengthening the the asset or the commodity that you're already
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involved in by supporting the smaller guys and making trickle
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down economics work for everyone, because usually it doesn't always
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work in the in the tradision of the world. But this,
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I think bitcoin uh fixes a lot of the flaws
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in global economics. But I appreciate your time. Benoir, thank
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you for joining the show, and please keep in touch
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00:37:11.159 --> 00:37:12.599
and join our supporters club.
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00:37:13.960 --> 00:37:17.239
Thanks for having me, Mohammed, keep doing the good work
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00:37:17.280 --> 00:37:18.760
and spread the world as well.
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00:37:19.400 --> 00:37:22.639
Let's keep let's keep building together amazing. Thank you.
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Thanks for drilling into crypto with us. If you enjoyed
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00:37:25.480 --> 00:37:27.960
our discussion, please give us a like on your podcast
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00:37:28.000 --> 00:37:31.320
app or social media, and don't forget to subscribe. Join
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00:37:31.400 --> 00:37:34.440
us next time when we will deliver more perspectives on
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00:37:34.559 --> 00:37:38.559
crypto asset mining, energy markets, and the global financial revolution.