Bitcoin, The Red Wave, and The Crypto Renaissance - Michael Saylor Speaks at Cantor Fitzgerald.

so the audience has grown uh certainly

not for me uh just wanted to again thank

everybody for being here uh excited uh

to continue this uh this event uh during

a very interesting time in the markets

um obviously see a lot of people been

glued to their phones over the last two

hours with the volatility going on

um the gentleman that I'm going to

introduce needs no introduction

obviously he's been at the uh Forefront

of crypto though uh doing something

quite frankly that's unprecedented uh

using the company's uh balance sheet to

continue to purchase uh Bitcoin in the

open market he's had a very strong view

I've had the pleasure of listening to

that view at a couple different

occasions uh chairman of micro strategy

uh a legend in the space uh and really a

savant in terms of thinking about the

world in a different way so with great

pleasure Michael sailor

[Music]

[Applause]

thank you um I title a presentation

Bitcoin uh the Red Wave and the crypto

Renaissance so today you're going to

hear me talk about a few things you

might have heard before but they're

they're now uh refreshed and then you're

going to hear me speak about a few

things I've never spoken about before

which I think will be interesting to the

group but I'll start with the problem

that we all

know um the economic problem is that

very few asset classes outperform

monetary inflation if you're trying to

beat the cost of capital the SNP index

it's very very challenging to do it and

everybody in the world's looking for a

solution to this

problem the companies don't have a

solution if the company can't grow 15% a

year or more institutional investors

lose interest liquidity and the stock

dries up there is no options

market and companies are requ IR ired by

uh by normal treasury

rules uh to use us treasuries as a

capital asset and if a company's sitting

on top of treasury bills they're losing

10% of their capital A year they're

underperforming the cost of capital by

10% a hundred billion dollar of capital

is going to cost your shareholders 10

billion a year so companies are in

essence type one diabetics every company

with the treasury strategy is a diabetic

you're less you're in essence bleeding

Capital off your balance sheet and of

course intelligent CEOs or CFOs

understand that so they solution of

course is just give away all the money

like we give away the capital we buy the

stock back and we lever up 144 to1 or I

dividend it out but the the solution of

my wealth is toxic so I'm going to give

it all away is in my opinion not a

recipe for living happily ever after and

that's what we do to most operating

companies there's a political problem

the political problem is how do we grow

the economy of the United States how do

we deliver prosperity to our people and

how do we overcome a deficit and all

that while maintaining Global

Leadership so everyone every institution

every investor every company every

politician struggling with these

problems

today bitcoin's the

solution why is it the solution is it

the solution a lot of people are

wondering that well I'll put the Bitcoin

return for the last four years on this

chart I just showed you and you can see

Bitcoin is just punching a hole in all

the traditional Capital markets this

isn't one year or two years this is four

years but you know it happens to be the

four years since micro strategy decided

Bitcoin was the solution and you might

say well you Cherry Picked that number

that's the low number I cherry-picked

that number because the other numbers

are better and I'll show you that in a

second if we look at this entire set of

asset classes they line up kind of

elegantly if you're actually holding

bonds for the last four years you lost

5% of your capital A year they're losers

every Bank in the US is capitalized on

bonds every operating company is

capitalized on bonds you wonder why the

banks are sick you wonder why the

operating companies are sick they're

sitting on on those minus 5% instruments

and that's their best idea Gold's plus

6% you might as well just hold gold real

estate's plus

10% the S&P is

15% you can double it with the

Magnificent s find the best companies in

the S&P the nvidias the apples the

Googles

29% and this little creature we call

Bitcoin is doubling that

60% and when you look at that a lot of

things become pretty

clear but this is the past 14 years

bitcoin's not just winning I mean it's

up 78% in 8 years it's up 103% in 12

years it's up 168% in 14 years it's

consistently winning and at some point

if you look at the numbers you start to

wonder well why is it winning and is

this a fluke and the irony of course is

that you still get questions from the

normies every day like well when does

The Run Stop is like like when do

nuclear reactors stop producing more

electricity than water

wheels you know when does the airplane

stop Flying faster than the donkey

cart the answer is it's not going to

stop because it's structural and

Technical everyone in the world is

searching for an asset uncorrelated to

the S&P

500 with higher returns uncorrelated and

Performing it's the Holy Grail

banks have conferences on this stuff

well Bitcoin is that asset it's an asset

without the counterparty risk that comes

from competitors countries corporations

creditors cultures or currencies

everything else you own in your life has

a counterparty risk to one of those

items except Bitcoin Bitcoin is in

essence orthogonal to the rest of the

market that makes it

Alpha but you don't have to believe it

from first principles you don't have to

study it you can just look at the data

this is Fidelity data it's showing the

lack of correlation and the sharp ratio

it's got the highest sharp ratio it's

got the lowest correlation so even if

you haven't read the book the Bitcoin

standard even if you haven't thought

about it for 100 hours or a thousand

hours or 10 hours all you have to do is

just run the numbers uh the market is

screaming at you that it's an

uncorrelated high performing

asset but to truly understand it you

have to go back to First principles and

this is my all theer MIT and this is

where I was taught to think from first

principles and they taught you how to

build things that had never been built

before and solve problems that had never

been solved before and it was an

epiphany that you're actually expected

and capable of solving problems no human

being on the face of the Earth has ever

solved before I mean Elon Musk keeps

pointing this out and proving it and

that's why he's the richest man in the

world the capital markets are full of

people doing the same thing over and

over again the same way because

convention says to do it the same

way I'm suggesting you apply basic

physics and Engineering to Capital

markets and see if you can solve the

problem in a new

way this is the wealth in the world it's

distributed across real estate and bonds

and equity and the little Block in the

lower left corner is Bitcoin at 1.8

trillion when uh incidentally when micro

strategy got into this Bitcoin was 100 0

billion so we have 10x and um and that's

just in four years but

um here's another way to see that chart

and this is the most profound Insight of

the day I'm going to give you that I I

think the majority of rich people and

the majority of Corporations and the

majority of money managers still don't

get this one idea which is half of the

wealth in the world is invested in

Assets in in search of a long-term store

value people just want to engage in

long-term capital preservation another

way to say it is I just want to stay

rich I want to keep my money there's no

one you'll meet that doesn't want to

keep their money right there's no

government there's no Corporation

there's no wealthy per there's no poor

person nobody wants to lose their money

so the circle on the right is 450

trillion dollar blob of long-term

capital right next time you hear

something someone say well what's the

Bitcoin use case there's no use case the

use case is the most valuable thing in

the entire human race it's $450 trillion

it's all the capital in the world the

use Cas is you get to keep your money

right that's actually the Epiphany once

you understand that people are using

assets for two reasons long-term capital

preservation or the second reason is

utility your yacht your jet your bakery

your Farm your Ranch your

plane company that's utility value your

piece of art you put on the wall it's

utility half the stuff is for utility

the other half is capital

preservation and um the challenge with

preserving capital is you either do with

with financial assets and they degrade

over time due to

entropy everything you invest in is

subject to weather and War and tax and

inheritance and income and excise and

these are the risk factors in every

10K they degrade the capital and so

people that want to get away from

Financial assets they buy land and they

buy buildings and they buy physical

items but entropy uh decades them too uh

there's a hurricane coming you know in

Florida right now it's going to hit in

the next few days you can't buy

hurricane Insurance you're just living

with this chaos in the real world and of

course I could talk about the Litany of

ways that your physical capital breaks

down but you all know it what's the cost

of

entropy what's the cost of chaos

confusion and competition inflation

politics and War well the cost is like

3% of $450

trillion the cost is 105 trillion

dollars a year it's trillions of dollars

a year someone says well what's the use

case of Bitcoin it's like well it's not

to we're not going to lose 10 trillion a

year like you get to keep the 10

trillion right that's what's driving

people to

bitcoin when you live in a world without

Bitcoin and you live in a world of

capital assets that are physical and

financial you see your useful life is 10

20 30

years if you buy a Ferrari or yacht

you're probably not going to preserve

your Capital but most people buy 10 20

30 year useful life assets and they

struggle and worry about them how many

people worry about their stocks every

day worry about their building worry

about their business worry about

currencies worry about bonds there's an

entire industry of

worry that's a constant

struggle this guy Satoshi came along and

discovered a method to transfer value

without a trusted intermediary and

everybody repeats it at infin item

Satoshi figured out how to send

something of value between two people

without a intermediary but that wasn't

the brilliant idea the idea that's so

profound it shakes the foundation of the

economy is that Satoshi figured out a

method to store value without a trusted

intermediary because sending the value

it's like a little bit better than Visa

or the FED wire storing the value well

that makes it the most useful thing for

$450 trillion of capital that's worth 10

trillion a year that's the big idea and

it's a very poorly understood idea

Bitcoin represents the transformation of

our capital from financial and physical

assets to

digital what we've created is an asset

without Financial Risk that's in a

currency or stock and without physical

risk that's in real estate or

property and that makes it digital

Capital not digital currency digital

Capital everyone that's a hater everyone

that's skeptic like oh it's a digital

currency it won't work well that's

because you decided to Define it as the

wrong

thing yes it's not a

currency right it's Capital once you

understand it as capital you realize

that you ought to compare it to a $100

million building in

Miami and think about the benefits of

building of owning a building versus

owning a a digital

building what if I could own a building

that had no tax no traffic no tenants no

torch no trouble no weather no

corrosion and uh what if it was an

invisible indestructible Immortal

teleport

building well I mean may I think I'd

rather have it than the $100 million

building in New York but I'm sure I'd

building in

Moscow digital capital is global capital

and uh and that means that if I gave you

$100 million and I put you in Africa or

I put you in

Russia or I put you in China and I said

Buy $100 million worth of stuff keep it

for 30 years or buy 100 million of

Bitcoin there's no doubt you'd rather

have the 100 million in Bitcoin there's

not a single thing you want to own in

Africa that's better than Bitcoin and

when people start to think of it that

way you realize that this is the

solution to Global capital and it's

inevitable that all the cap in the world

is going to flow into this network

because whereas you might think New York

is good and Miami is good no one's

arguing that any random City in Nairobi

is better than New York or better than

Miami right it's just not a question so

when you put that on my map here you see

Bitcoin solves a problem it's the

Thousand-Year asset right what if you

just wanted to be uh wealthy forever

well I mean like there's an entire

industry that's wrapped around wrapped

up in that idea of how do I keep my

money Bitcoin is this digital Capital

that has a useful life not of 30 years

but maybe 30,000 years and that's the

profound idea it's stretching your time

Horizon to a different place and what

backs it it's not backed by anything

people say that it's not backed by

anything it's backed by power the same

thing that backs everything in the world

raw power a lot of it is backed by

digital power political power economic

power 733 ex ahash is more power than

Amazon or Apple or Google could muster

or or or Microsoft could muster to

attack the network right now or any

nation state it is the most digital

power 18 gws is 18 fullon nuclear

reactors it's more than the United

States Navy runs on 850 billion of real

Capital people have taken 850 B of real

money deposited in the bank that we call

Bitcoin you think those people aren't

going to fight to defend the 850 billion

there a lot of economic power 420

million crypto Advocates you just saw

the impact on the on the election on

Tuesday night 220 million

holders it's the most powerful crypto

Network in the world it's 99% of the

power in the crypto Network it is the

dominant one it's 100x more powerful

than the next best one that's why I say

there isn't the second best is because

this is all the power another way to say

it all the

smart money in the world ask the

question how do I store my money in

cyberspace and not lose it and they kick

the tires on 10,000 crypto networks and

a thousand other ideas and 100,000 other

investment ideas and if they like the

idea of put your money in cyberspace in

a crypto Network they pick Bitcoin it's

the

winner right if you're the smart money

you go to where the smart network is if

there's a bank with a 100 billion dollar

in it in your town and another guy opens

up dude's bank with

$10 you don't say the bank with the 100

billion is overvalued and dude's bank is

the best investment you put your money

in the bank with all the rich people

it's just a smart thing to do they have

all the

power Bitcoin is emerging as the

dominant digital monetary Network now

when I I use the word emerging not

because it isn't it already is I just

use the word emerging because 95% of the

people with the money in the world don't

understand that there's a digital

monetary Network yet when they

understand that the class exists they'll

realize the Bitcoin is the winner once

they realize it

exists it's like I said it's like it's

like Facebook for money except when rert

Murdoch shows up to bitcoin he'll bring

billions and billions of dollars he

won't just bring 27 friends and a few

party invitations

12 out of the top 20 ETFs launch in 2024

are related to Bitcoin in some way it's

it's obviously eating the ETF

Market it's now the seventh largest

asset by market

cap seventh and it's the most widely

recognized widely held compelling

investment asset in the world right

what's above it Alpha bet Amazon

Microsoft Apple Nvidia they're all

Securities in the US there's no way that

a Chinese or a Russian company is going

to capitalize on those things gold the

best idea in the 19th century dead

money right so what do I expect I think

we actually chew through you know one

through six sometime

soon spot ETFs have 90 billion of

AUM black rocks ETF for Bitcoin is

actually outstripped their gold ETF in

less than a year Gold's been around for

5,000

years bitcoin's crawling into all the

bond markets look at the yields you can

have 64% from Bitcoin or you could have

2% 3% 4% or 5% for the

bonds you know Bitcoin is going to take

the take a place in the 60/40

portfolio right now people talk about 1

to 3% allocation that's going to move to

10 to 20% an allocation as soon as

people get their hands around this I

don't I don't think it'll take very

long Larry fank is has become the most

prominent advocate of Bitcoin this is M1

CNBC no I I know you have been a leader

not play this because willing to embrace

crypto you because you can look it up

but I want to stay on

schedule lots of entities buying

Bitcoin now 2 and a half million Bitcoin

held by ETFs countries private companies

public companies what's driving

Bitcoin institutions are driving Bitcoin

thousands the ETFs have actually

purchased five billion do in the last

six

days the last six days there's only $40

million of Bitcoin available for sale by

natural

Outlook okay you can you can Google this

Bitcoin 24 go you'll find it on GitHub

download the model put in all your own

forecast assumptions about inflation

Innovation and the like I'm going to

show you

mine back to to our map of assets I'm

looking out over the next 21 years

what's going to happen well I assume

technology is going to continue to

advance we're going to harness AI

there's going to be a lot of incredibly

valuable

companies bitcoin's going to grow

rapidly Gold's going to be gradually

demonetized Equity is going to grow a

bit faster real estate about the

historic average basically the money

supply is going to expand about 7% a

year some assets are going to stay on

that Glide slope some will slightly

outperform it uh like Equity like

Bitcoin some will slightly underperform

it that gets us to this forecast which I

presented in July of

2024 Bitcoin grows in a basea in my base

case 29% ARR up to 13 million a coin I

think it grows faster in the first four

or five years it's growing 50 50 to 60%

it's going to decelerate from 60 % at

some point down toward two times the S&P

index but you can see every Bitcoin you

don't buy today is going to cost you $13

million a lot of people think well you

know the world's going to turn upside

down uh no it's not the world is not

going to turn upside down in 21 years

the world's going to look pretty much

the same as it looks right now they'll

be a lot of real estate a lot of bonds a

lot of currency a lot of equity there'll

be a ton of trillion dollar companies

there'll be1 trillion do companies the

only difference is if you didn't buy

Bitcoin you won't have made that

money right there'll be a whole class of

people that use Bitcoin as a capital

asset and the big Winners should be

Bitcoin and Equity is you know AI makes

all the cars drive themsel and someone

produces a billion robots and they get

and the robots make the robots if the

robots make the robots then presumably

the company that owns the robots that

make the robots is going to make a lot

of money

right so the I mean it's going to be a

good a good future for high tech for the

people that can harness

that uh okay micro strategy what are we

um we're the first and largest Bitcoin

treasury

company what does that mean it means we

basically Buy and Hold Bitcoin

exclusively and we focus upon issuing

Innovative fixed income instruments to

create intelligent leverage to give our

Equity holders performance that's better

than Bitcoin in a very precise

consistent way just buy Bitcoin raise

money to buy Bitcoin rinse and

repeat what happens if you have such a

monotonic simple idea and have laser

focus on it well every Green Dot is a

purchase of Bitcoin by micro strategy we

buy the lows we buy the highs we buy the

middle we buy we buy we don't sell you

know at some point people are making fun

of us for having lost a billion ion or

two billion on this

trade we're up 135 billion right now I

think we made three and a half or four

billion in the past five

days the point is leverage right like

once you get the right asset position

bitcoin's going to have $220,000 up

dayss you're just going to want to own

it you're never going to want to not own

it so this is what happens if you what

if you lever Bitcoin what's better than

Bitcoin the only only thing better than

Bitcoin is more

Bitcoin okay and then and then the

question is did I pay 14% interest to

get the more Bitcoin 7% interest to get

the more Bitcoin or did I pay in micro

strategies case 82 basis points to get

the more Bitcoin if you borrow money for

free for five years and buy a billion

dollars of Bitcoin with it and if

Bitcoin goes up

60% your return will be higher micro

strategy is buying Bitcoin but we're

doing it as a public company with

intelligent

leverage okay well how does that compare

to all the S&P

500 okay Nvidia is the number one and

you can see that it's we used to be

proud We were slightly beating them but

now we're crushing

them right this is not even funny

anymore now here's the thing if you guys

can if you can copy nvidia's business

model I encourage you to do

so I don't think Apple and Google and

Microsoft and Amazon believe they can

copy nvidia's business

model but I'm inviting all of you to

copy my business model I'm telling

everybody I'm singing it I'm yelling it

from the Treetops I'm showing you how

I'm publishing The Playbook it's the

simplest thing possible any company can

copy

that right and that's what you get if

you copy that business

model This Is How We compare to all

these assets

what's the secret well it's intelligent

leverage intelligent leverage the

capital markets are

unhealthy and and Fiat capital is toxic

I just showed you what's wrong with the

us treasuries if you Arbitrage between

something that's minus 5% and something

that's plus 60% with

leverage you can create a monster

company okay how do we perform well we

beat 100% of the P 500 Bitcoin look at

Bitcoin you don't have to be micro

strategy you could be the most brainless

person imaginable and you could have

just bought Bitcoin you would have beat

every single

company magnificent 7 they beat 95% 60%

of the S&P can't beat the

index right that's the

challenge so I say volatility is

Vitality conventional wisdom is run away

from it it turns out that the smart

thing to do is run toward it volatility

is not a problem if you rich if you're

Bernard Arno and you go from being worth

150 billion and $250 billion do that

wasn't painful volatility when Elon Musk

made hundred billion dollar this week

that was not painful volatility for him

that's the volatility you want you want

to own assets with massive

Leverage What does that get you well

what happens is if you if you're if

you're basically spinning at high

frequency a bunch of assets you get

massive liquidity and massive open

interest in your options market and what

this illustrates is that micro strategy

is one of the top 10 uh companies in the

S&P 500 for liquidity and for open

interest and it also illustrates that on

a market cap basis we're number one

right we're the literally the hottest

most radioactive

stock you know and and if you're afraid

of fire and if you're afraid of nuclear

power hot and radioactive or dirty words

but you know the human civilization was

built on the one of them and the future

is based on the other one and so I don't

think they're dirty I think this is

opportunity this is just a schematic of

our of our business what are we

doing you ever see a ship well half of

the weight of the ship is above the

water line the other half is below the

water line if you want to have 500 tons

above the water line you got to have 500

tons below the water line the Baseline

for Bitcoin is the spot ETFs that's 50

55 Vol 55 AR or 60 Vol 60 AR micro

strategy strips the ball and strips the

performance off of that asset and sells

it into the fixed income market and into

the capital markets to people that are

more risk adverse and then we actually

layer that ball and that performance on

the equity so our Equity can be 2x

Bitcoin and our bonds can be

1X Bitcoin with much less risk and the

entire thing uh is self- sustaining as

long as we're stripping risk and

volatility off one set of instruments we

can uh add it to the equity and the

options market and the other set and uh

you know this is again it's just how how

most things work in nature

next um a lot of times people say well

you know the company's valued a premium

to its uh to its net assets and

um I think that's the wrong way to think

of it it's like saying Standard Oil you

know has a few billion dollars of

reserves so it seems to be valued at a

premium to the reserves well the point

is standard oil does something more than

just have St own stuff by the way M

Microsoft is valued something like 50x

its

reserves because it does stuff and so

there's an operating company that does

stuff so what does our operating company

do we're refining crude Capital we're

refining like you refine crude oil and

you pull in crude oil on one side and

out comes kerosene which goes into your

jet engine or out comes gasoline goes

into your car Jets and cars don't run on

crude oil there's value added to refine

it and make it into a product that runs

Jets and cars and trains and you can

burn in your house and asphalt you lay

down on the road so petrochemical

product are valuable that's why oil

refineries are worth a sum of their

operations and their

reserves well there's a there's $300

trillion dollars of capital in the

capital markets they can't buy Bitcoin

they don't want Bitcoin they want

Bitcoin with no risk they want Bitcoin

upside with no Vault they want double

Bitcoin they want 10x Bitcoin they want

something different than Bitcoin so if

you were to say I think the oil company

is only worth its

reserves okay fine we'll just like blow

up the refineries and we'll all freeze

to

death okay what we're doing is we're

refining crude

Capital well this is an interesting

slide micro strategy is the leader in

issuing Bitcoin back bonds okay what's

interesting about them if you bought our

bonds you get 134% return if you bought

Bitcoin the same day you get 70% return

we actually gave you all the upside of

Bitcoin with no

risk stripped of all stripped the risk

stri the downside gave you double the

upside why wouldn't you want that right

if you like Bitcoin why wouldn't you

like Bitcoin without the risk of Bitcoin

how do you do that you have to actually

issue the bond senior in a capital

structure which is all Bitcoin if I

diversify the capital structure if I

dilute it if I put a 100 billion of

treasuries on it you lose the Vall you

lose the return you lose the performance

you have to be all in on bitcoin to do

this but once you're all in you can do

this over and over and over again this

is infinitely

scalable we've got uh a primary kpi we

use we call it uh BTC

yield and um BTC yield is the rate of

increase in Bitcoin per share since the

beginning of the year we've increased

Bitcoin per share for our shareholders

by

26.4% um what does that translate to it

translates to like almost 50,000 Bitcoin

and what are we doing well we just

launched the biggest ATM offering in the

history of capital markets 21 billion we

thought Satoshi would be proud of us to

raise 21 billion of capital and it's out

part of a$ 42 billion Capital plan and

so we're actually raising 10 14 18

billion that's our Target over the next

three years and of course all of that is

going into buying Bitcoin

if Bitcoin trades at $40 million a day

of natural if there's natural sellers of

40 million a day you can divide 40

million into 42 billion and figure out

how many days we're

buying

right this is one way to look at it

we're about uh 27

279,000 generated a yield of 7.3% that

works out to

18,41 bitcoin that means that we we

created 18,000 Bitcoin at no cost and no

dilution it's like a Bitcoin miner if

you had a Bitcoin miner and you Min

18,41 Bitcoin in 10 days for

free that's what we did there right

that's what that is multiply that by the

price of Bitcoin and you can figure out

what's that Worth to our

shareholders years to date we we

actually uh generated a 4

49,93321

Bitcoin every single day for free no

dilution that would be onethird of all

the Supply right it's like we're

onethird of the hash rate but we managed

to do it with no

electricity no Capital cost and keep

scaling

it and the difference is we're enriching

every Bitcoin minor we're actually not

decreasing their profitability they're

getting wealthier while we're doing this

this is a very virtuous

thing okay now let's switch to the fun

topic the Red

Wave the Red Wave you know we didn't

know what was going to happen but you

know as of this morning I'm reading the

Republicans have taken the house they've

taken the Senate they've taken the White

House and what's the Red Wave about well

I think I'd boil it down this phrase

Elon Musk kind of the the heart the soul

the Zeitgeist of the moment has that

quote give people their freedom back

this entire Red Wave is about getting

Freedom

back and this is the guy that's going to

give you your freedom

back and he is all in on bitcoin all in

on crypto all in on freedom he's in

favor of business he's America first he

wants to unleash entrepreneurial Spirit

from the clutches of

bureaucracy he has these words for

implications end into the war on crypto

it's one of the planks of of the entire

election lay out a digital assets

framework accelerate institutional

adoption modify the tax laws make them

much more favorable to crypto to bitcoin

to Industry to

everybody can you go

back and

uh a strategic Bitcoin Reserve all these

things I think are implications of the

Red Wave they're all

coming big milestones for Bitcoin

institutional adoption a repeal of sa

121 the ability to uh create inine

create Redemption of Bitcoin ETFs

options on bitcoin ETFs approval for

solicited sales by Banks and acceptance

of BTC as collateral for

credit crypto Renaissance this is going

to usher in a crypto Renaissance what is

it and

why the traditional Capital markets

they're failing the public they're

crippled by Antiquated structures and

they're based on those structures are

based on 20th century

techniques they're all

obsolete right we're living in a world

that was defined in the 1930s and if you

read rothbard he'll tell you that the 33

SEC Act was meant to create a cartel and

limit access to the Capital Market to

just a few people it was already a

Restraint of trade and an encroachment

on freedom in 1933 under the Roosevelt

administration it's just gotten

progressively

worse traditional Capital markets just

too expensive it's like too many lawyer

you want to go public too many lawyers

too many accountants too much money too

many employees too many years too much

revenue too much of everything it's just

too hard

and and if you manage to get public if

you're one of the 4,000 companies that

goes through that and spends four years

and $40 million and you get

public there's no liquidity in your

options there's no liquidity in the spot

you can't beat the S&P you can't retain

earnings you're limited in the

Investments you can make by the SEC 40

Act and the SEC 33 act you're you're

basically hamstrung you can't take risk

you live in fear of missing the quarter

capital is toxic volatility is toxic

inflation is killing you that's the

problem that's why 2,000 companies in

the Russell 2000 are all

struggling don't take my word for it

though here's the chart number of

publicly listed companies in the US over

the past 20 years 25 years now I invite

you to put anything on that chart if I

if I put that chart up and I said number

of basketball players number of number

of public schools number of planes

Yachts trains Apartments number of

televisions number of

computers number of wealthy people

number of I don't care what you put it's

a sick chart right it's a it's a chart

of a Dying economy that's not working in

a healthy bu healthy economy you

shouldn't have charts going down and to

the right that is a chart of like Xerox

copy machines right or typewriters or

buggy

whips except American public companies

shouldn't be an Antiquated rapidly

obsessing product of the

civilization the traditional markets

they're exclusionary they're elitist

there's 4,000 publicly traded companies

in the US they're the crela crop there's

400 million small businesses in the

world there's 40,000 list companies

there 400,000 big

companies okay

0.016% of the United States businesses

are served by the capital

markets like like in what world you know

is 0.06% of the people having access to

water electricity power mobile phones

computers internet in what world is

0.006%

winning right that's anemic and we have

been beaten in a submission to think

that there's something healthy about

that that is not healthy that's not

normal our current regulations they

require four years and $40 million to

create a traditional

security but you could do something

smarter faster strong or in a digital

token in four hours with 40

bucks and so the Millennials the genz

are looking at this they're like I don't

get it I could do something better and

cooler in four hours why do I need

armies of lawyers and accountants in

order to do something which is

worse right and that is the driver

behind the crypto

Renaissance now the industry needs a

digital assets

framework in order to grow and prosper

that's very clear without a framework

we're not going

anywhere but this is not a complicated

thing I think I think the previous

administration acted like it's

complicated a lot of people think it's

comp okay it's not that hard it's three

steps Define the asset classes set sound

ethical e economic and Technical

guidelines and provide a practical legal

method to issue own and operate digital

assets one two three very

straightforward has not been done the

industry will not go forward until we've

done those three

things it would take like 10 10 pieces

of paper to Define 95% of this

decently so what are the

assets a digital commodity an asset with

without an issuer backed by digital

power that's what Bitcoin is a digital

commodity a digital security an asset

with an issuer backed by a security not

complicated Equity debt derivative

something tokenized a digital

security a digital currency an asset

with an issuer backed by a fiat

currency stable coin tether Circle

straightforward a digital token a

fungible asset with an issuer offering

digital

utility something useful in

cyberspace an nft a non-fungible asset

with an issuer offering utility in

cyberspace

again not

complicated abts asset back tokens an

asset with an issuer backed by a

physical asset like gold or oil or

corn there you go those are the asset

classes those asset classes could be

hundreds of trillions of

rules well digital currency rules H H

this is what our um our government is

going to need to do over the

next

year they need to lay out the um the

rules of the road for this so here's a

simple question how does a corporation

issue and operate a stable coin back by

USD reserves that could be transferred

freely and instantly between humans and

machines

worldwide what's the asset test it's

very simple when tether relocates to the

us we will have solve the problem why

wouldn't you want them to relocate to

the US create a simple a simple strategy

or a simple guideline they move their

digital currency operation to the US

they buy hundreds of billions and

trillions of dollars of US currency

everybody's happy very simple we won't

have succeeded till we solve

that digital Securities how does Apple

make its shares available for trading

247 365 on a digital exchange how does

an Apple shareholder take POS possession

of their shares on their own iPhone um

it seems kind of ridiculous that you

can't hold a share of Apple stock on an

iPhone why

not somehow the entire rhetoric became

it's like unethical to do how is it

unethical to hold a share of Apple stock

on an iPhone it's not unethical it's

like so logically obvious if I can hold

my photos my books my communications on

an iPhone on a movie why can't I hold a

share of stock on an iPhone is it

possible of course it's possible in fact

all the crypto Bros figure it out we

just put them in jail for figuring it

out you know it's like it's not

hard um but that's the question and

what's the asset test well when micro

strategy stock trades 247 on coinbase

we'll have solved this

problem why can't why can't they right

by the way I can't under the previous

administration without the framework but

it's very obvious you'd want

to how's a European living in Japan send

a share of Apple stock to an American in

Argentina using an Android phone on

Saturday

afternoon by the way substitute apple

stock for uh

photo for

message it works with photos it works

with messages it just doesn't work with

a share of Apple stock is there

something unethical about moving Apple

stock instead of a message or a photo

it's very straightforward is it hard not

hard you just need the framework what's

the acid test when you sell that share

for USD and you can convert that to to

Argentine pesos and pay the rent with it

then you will have solved the

problem how about small businesses right

how does a small business issue

Securities where $3 million to fund uh

their expansion when they've got a few

hours and a few thousand doll to spend

and they don't employ any lawyers is it

unethical to want to do that no is it is

it good for the economy of course it

is how many people want to do it well

maybe like 400 million want to do it is

it possible

yeah what's the asset test when you can

invest in Joe Rogan when Rogan releases

Rogan token and yeah then you've solved

that problem would he could

you in

time token rules how does a celebrity

issue a digital token to their followers

that offers Super Fan privileges to the

holder and what are the obligations of

the issuer the owner and the exchange

it's very simple question not that hard

I mean you can you could answer the

question in in two paragraphs or three

paragraphs if you wanted to write it

what's the asset test it's when you own

Katy Perry

coin right then you'll know it worked

when Katie Perry issues the token and

someone's got it or your daughter's got

it then that works how many people want

to do that oh like millions and millions

and millions of people want to do it

like I you know just about every

celebrity I've ever met would probably

want to do

it exchanges how does a corporation

offer crypto exchange services allowing

the public to issue Buy sell transfer

digital

assets well that's the question right

what's the asset test well when binance

moves its headquarter to the US you'll

know you've solved the problem would we

want them to of course we want them to

right why wouldn't you want every

company that does something that people

want to buy or want to use why wouldn't

you want them all to come to the

US right like why don't we want them

well they won't act ethically well just

make the rules give them some meth I

don't think anybody in business wants to

cheat their

customers right they're just they're

just caught in a in in a obsolete you

know Antiquated oligopoly situation

where there it's illegal for them to

actually solve the

problem so the crypto Renaissance is

going to revitalize the capital markets

right and what would happen well you can

see here coming back to my chart well a

big chunk of equity when Apple and

Google and meta can actually tokenize

their Equity you think they will of

course they will of course they will

right you know you think that Tesla will

tokenize Tesla stock of course they will

right so you'll see a lot of equity get

tokenized you'll see bonds get tokenized

we used to have you know we had bearer

bonds like we've gone backwards the

Rothchild sold beer Bonds in the 19th

century well how about going forward to

bearer bonds again we'll have tokenized

bonds tokenized currency token we'll

even have tokenized real estate I think