Michael Saylor: Bitcoin Rallies as Futures ETF Goes Mainstream | Bitcoin Review #10

welcome everyone my name is john darcy i

am a director of business development

here at sky bridge which is a global

alternative investment firm you're

probably aware of this but uh we manage

about 8 billion in assets and we now

have uh over a billion dollars in crypto

assets the vast majority of with uh of

which are bitcoin we're joined today by

sky bridge co-cio and president uh brett

messing

who's also joined by our special guest

today uh who you likely know if you're

involved in the bitcoin space his name

is michael saylor of microstrategy we

started hosting these guybridge bitcoin

reviews about a year ago michael was one

of our first guests and as anthony talks

about frequently our conversations with

uh mr saylor were part of what helped

crystallize in our mind the investment

thesis and narrative behind why we had

to be invested into bitcoin in our

flagship funds and we subsequently made

that decision and it's obviously treated

us very well so we're very thankful to

michael for that a reminder we like for

these to be interactive so brett's gonna

drive a lot of the conversation here

today talking about recent news in the

world of bitcoin you know macro

conversation around bitcoin as well but

we also want to take your question so if

you have an intelligent question please

submit it in the chat box or the q a box

at the bottom of your video screen i

will screen those questions to make sure

there's no shenanigans but hopefully

some good audience participation as well

but with that i'll turn it over to brett

for the interview uh thank you john uh

michael uh thanks so much um you know

we're big fans uh you know i think

you're the preeminent thinker in my mind

on bitcoin but we're also a fan

because you have the biggest balls of

anyone we know having accumulated 115

000 i think approximately bitcoin over

the last year

um

variety topics i i want to touch on with

you

it's been an incredible year

in terms of you know the chinese ban and

what that's meant el salvador and etf

obviously the bitcoin price is up a lot

the one thing that gives me pause is

that everything's up a lot right so as

well as we've done in bitcoin if we had

bought amc stock or or

you know many different assets we would

have had a similar kind of return and

and i'm wondering i just want to make

sure we're not getting too bullish about

the adoption how do you think about that

yeah um well let's look at the last 12

months uh bitcoin is up 352

gold is down seven and a half percent

the s p is up

34.1 percent

nasdaq is up 41

long dated treasuries if you held them

down about 7

we have a year of unprecedented

political unrest and and uh and

political risk and clearly we had a lot

of monetary inflation

you have meme stocks

and you know individual cryptos and

individual stocks of course that are all

over the place and some of them

screaming

um

but i i think there are some conclusions

you can come to if you look at asset

classes

the first conclusion is that in in the

biggest year of political unrest and

inflation in our business life

gold is a complete abysmal utter failure

complete

right and and so you could just start

with that observation gold is a complete

utter macroeconomic failure and if you

waited for 40 years for a year like this

you finally got it

and

it was useless

on the other hand we knew that long

bonds are overvalued right so so bonds

and gold as asset classes are just

looking scary as heck

um

and you've got a conventional inflation

hedge if if you want low risk

conventional monetary inflation edge you

buy the s p index

if you want a bit more edge you buy the

nasdaq index

34 on s p it implies to me that the

monetary inflation rate or the

debasement rate is 34

plus or minus you know the risk premium

maybe

maybe it's 31 percent with a 3 or a 4

risk premium

but if you if i had to guess well what's

the inflation rate i would say well cpi

is five percent

and producer price index is if you talk

to anybody that manufactures who does

anything in the real world they'll tell

you their costs are 20 to 25 percent 30

more

and if you look at the s p index it's

screaming at you

30 inflation and bitcoins beating by 10x

that now

what do i think about risk

well i think that over the course of a

decade bitcoin's 170 a year every year

for a decade nasdaq is 19

every year for a decade and the s p is

14 every year for a decade

so if you look at it like that the

market is on and gold by the way is

you'll love this one point uh minus

point zero six percent minus six basis

points a year every year for a decade

and long bonds 240 basis points

i i mean the conclusion you come to is

pretty clear if you can stomach the

volatility and and the the novelty of

bitcoin you're getting paid 10x

if you can't stomach it

you sit in the s p index

and uh you know the other things are

speculative and if you're a vc or a

speculator or a trader you can deal with

that but

but um

the we the reason i think the bitcoin is

compelling

is um first of all

it's pretty clear that gold is broken

bitcoin is digital gold it's not broken

we just had the senators

from wyoming go on national television

this week and state pretty much that

and so we we know that it fills the

niche of digital gold and there's going

to be an avalanche there's 10 trillion

dollars still sitting in gold

right if you're still believing in gold

after a decade of minus six basis points

you just must not like money right

either you don't read charts

you don't like how many years of your

life are you going to wait and fail

before you admit it doesn't work because

if i walked you into a house with no

electricity for 10 years i think you'd

figure out that you can't turn on the

lights at some point

so the first issue is gold is busted and

i think the second the second thing

that's compelling about bitcoin is

the big tech trade looks crowded and

overdone

i mean if you if you go and you pull

you know what's amazon stock right now

trading at you know it's um

amazon's at 33

84. and that's exactly where it was a

year ago brett

okay so with big tech

it's like the real question here in

inflationary economy is

is where's the risk apple's got supply

chain risk they just cut their ipad

manufacturing in half because they

didn't get chips amazon's got

unionization risk what happens when one

and a half million people unionize right

and they've also got supply chain risk

and you know you've got google

and facebook they've got regulatory risk

they're getting banned in china they're

getting

they're getting reviewed in the u.s and

they're getting fined billions of

dollars throughout the world

so if you're looking for no risk or

you're running away from risk the truth

of the matter is the lowest risk thing

you can possibly buy right now is

bitcoin because there's no ceo there's

no corporate headquarters there's no

product

you know the product is simple it's 121

millionth of all the money in the

network forever that's the product so

you're getting away from the board of

directors and the employee base and the

regulatory nexus and the competition

and you already know there's a demand

for a non-sovereign store of value and

if you're you know if you're awaiting

right fundamentally just it has to pass

if you're an institutional investor

anything you invest in has to pass the

micro strategy test and that test is

three part brett

will it be copied

will it be banned

will it be hacked

and that we talked about this a year ago

when i met with with you guys it's like

well bitcoin will it be copied 10 000

times every one of them a failure

there's nobody with a straight face

that'll tell you they've got a bitcoin

substitute the proof of work network and

the approach the ethos and the

engineering and the protocol makes it

very unique as a non-sovereign store of

value

so it won't be copied will it be hacked

no one can hack it will it be banned

well you know you might have wondered a

year ago but

after christina lagarde jerome powell

all the senators all the congress people

the secretary of the treasury right and

and the head of the sec just noted it's

all digital property

it's it's scarce they might say

speculative

it's a speculative store of value but

you know if it wasn't speculative

it would be trading at 10 million a coin

right now

so the only thing that keeps it from

going up by a factor of a hundred is the

fact that it's quote unquote speculative

but otherwise

it seems to me it's a lot more risky to

buy gold it's a lot more risky to buy a

company a stock even a big

name a big tech monopoly that's safe

okay

well because if you're a monopoly you're

not safe if you're not a monopoly

you're not safe for a different reason

so

i think that the best thing you could

possibly have is the volatility

that keeps all of you know all of the

conventional thinkers out of the asset

because that gives you a chance to buy

it

cheap so that that's actually a good

jumping off point michael so you you uh

microstrategy you hosted a conference in

february which was you know fantastic

sort of

foster

sort of corporate adoption and

you know i would say i think

the market

is is disappointed that we haven't seen

the follow-through

there's sort of two two related

questions so i know you've been working

with fasbi that there are some

accounting issues that have

made it difficult for public companies

to put it on their balance sheet there's

another dynamic i imagine you're aware

of you know we're investors in a number

of of leading private crypto companies

like ftx nidaeg

kraken a bitcoin miner genesis digital

and we're very active in that market and

the valuations in the private crypto

market are going absolutely insane

because what we're seeing is that an

institution would rather pay an insane

valuation for an asset they don't have

to mark right than to buy bitcoin right

so in my judgment right now bitcoin is

trading incredibly cheaply

relative to where

say crypto companies are trading because

of this preference to not have to mark

to market

i guess how do we pull these people in

what do you think about those two

dynamics

so um

first of all

let's just put it in perspective

bitcoin's the best performing

institutional great asset of the year to

date it's up 344 percent

and that's adult that's an acceleration

of 2x over its growth rate for the past

decade which was also the most

impressive performance so i kind of as

an aeronautical engineer this is like

going through the speed of sound

if we went any faster we'd rip the wings

off the airplane

like there if you have any experience

with a boat or an airplane or an airfoil

there's a certain speed you can get to

at which point you just start to rip the

wings off

or or you start to to move against the

forces of nature

and i think

if i said to you know you're saying to

me well we're disappointed you're up 340

percent in 12 months okay so

loving that right i i get what you're

saying

we're disappointed that there aren't a

hundred we're disappointed apple

computer hadn't bought 50 billion

dollars of bitcoin yes right

that's what this point about yes and so

let's talk about that i think

i think first of all

a lot a lot of people publicly traded

companies have a problem owning holding

the property

and the problem holding the property is

either a there's it would take about a

year six months to a year to establish a

relationship with a a crypto custodian

when you go to set up your coinbase

account or a fidelity account or

whatever if you're publicly traded

you're you've got armies of lawyers and

accountants going through due diligence

and compliance check and and security

check and and the like i mean bear in

mind most of these companies most people

that trade stocks have been using the

same broker for 20 years

you know some most institutions have

been using the same broker for 30 years

so having to actually come up with a new

broker

a once in 30-year thing i think that

slows people down i think the second

thing is the fasb accounting treatment

of indefinite intangible it's hostile

and prejudicial to a cfo or ceo that has

a optically pristine p l or balance

sheet

you know if

if i buy a billion a bitcoin it goes

down by 50 then it goes up by 20.

i report to the world that i have 500

million in assets and i had a 500

million dollar operating loss even

though neither of those things are true

what i really have is 10 billion in

assets and a 9 billion investment gain

so

i got to sympathize i mean the one

intelligent pushback from someone as to

why i don't buy bitcoin it's not the

volatility of the asset it's the optical

or the accounting volatility because 30

years of

pristine operations

at a company with a perfect p l and a

perfect balance sheet and gross margins

that you can predict plus or minus one

percent for eight quarters that gets

totally blown out of the water if you

replace your treasuries with bitcoin

so i i think that um that that's a drag

for public entities that are gap

accounting reliant and

i think the third drag is is that there

are there are trillions of dollars brett

that by charter and by law and maybe by

tax code

can't own property they have to own

security

right the distinction being a billion

dollars of bitcoin and an etf or a

billion dollars of microstrategy stock

as a security

a billion dollars of a bitcoin miner is

a security a billion dollars of bitcoin

is property

now i mean there's a lot of advantages

to owning property outright versus the

security but the disadvantage is if i

raise 10 billion dollars from 100

pension funds and i'm an sec 40 act

investment company and 90 of my

portfolio has to be in securities

undoing that would take three years and

herculean effort right and maybe i lose

my investors

so

i think that uh

one of the impediments uh has been the

lack of securities that offered bitcoin

exposure i mean the obvious elephant in

the room is the lack of a bitcoin etf

for the spot market

i don't know you might have seen tom

emmer's uh note to the sec today

where he basically says we need we need

an etf for the spot

that would be a security

um

if if

bear keeping in mind one more

observation if i look at my ticker right

now

marathon

is trading at sixty four dollars a share

it's a six and a half billion dollar

market cap and today it traded a billion

dollars of liquidity

riot

today traded 600 million liquidity with

a market cup north of 3 billion

and then you've got in rapid succession

you've got bit farms which is a billion

dollar plus publicly traded miner you've

got hut eight that stock has tripled in

the past three months it's a two and a

half billion dollar miner bit digital i

could go on there's about 12 hive argo

i think that that if you say well what's

the progress in 12 months well when

microstrategy did our due diligence you

know brett i couldn't find a single

company holding three million dollars of

bitcoin on their balance sheet anywhere

in the public markets

couldn't find anybody and so today we

have like 36 companies

and you've got microstrategy and tesla

that have taken

north of billion dollar positions you've

got

you've got square and marathon that have

purchased you know four or five hundred

million dollars worth of bitcoin on

their treasury you've got a dozen

bitcoin miners you've got two futures

etfs

and um

how would i how would i put this to bed

i would say this brett like you remember

the chair of the fdic last week said

they're investigating how banks can hold

bitcoin on their balance sheet and what

the reserve ratio should be

and i looked at it

and i tweeted i said when the fdic

finally approves banks to hold bitcoin

on their balance sheet

everybody you'll want to buy it nobody

will want to sell it and you

won't be able to afford it

so

in this particular case i think the same

holds true which is

you're seeing the motion you're seeing

the 350

uh up uptick you have a lot of obvious

liabilities that are holding back apple

and google and facebook from buying 50

billion each

i thank my lucky stars for those

liabilities when i was banging away on a

computer buying bitcoin as fast as i

could at 9 500 a coin

and i bought 175 million dollars worth

of it in like two days hoping to hell no

one figured i was buying it while i was

doing that i consoled myself with the

thought that it took me three months to

get kyc to get the account and they put

me through hell

and if it's that difficult to be able to

buy bitcoin then i figured that i'd done

the work and everybody else was going to

come after me and they were going to pay

double or triple

and a year later

it still takes 12 you know eight weeks

to get a kyc aml account to do

institutional grade bitcoin acquisition

is property

and you pay 6x that much or 7x that much

when uh when fasb cures the accounting

and i think there's consensus that will

eventually go to fair market accounting

i just don't know when

when the sec gives you a spot etf

when fdic lets banks hold bitcoin on

their balance sheet

right at that point you won't have these

headaches but you will be paying five

hundred thousand dollars a coin or a

million dollars a coin

and so

i don't be careful what you wish for

i think there's one other development

that's important institutionally michael

which is you know uh bny is going to be

rolling out custody

and we've encountered some institutions

who just aren't comfortable with the

unregulated custodians as great as they

are like we own a ton of bitcoin with

fidelity and nighting and we diligence

them but we do also understand people

who want

right a federally chartered bank like

bny that owns 41 trillion dollars in

assets holding their bitcoin so i i

think that

when bny mellon rolls out to their fire

block solution i think i think that's

that's going to help i i want i want to

go back to the mining you've done a lot

in mining this year

you tweeted something in the last week

about marathon huddling and holding

several hundred million dollars of

bitcoin and you've encouraged all the

miners basically to finance themselves

with debt and equity and hold bitcoin

can you speak to that a little bit and

why it's so important in terms of the

supply demand and balance in the

marketplace you know why it matters for

the price of bitcoin

you know

it's a really good point i mean people

are focused upon stock to flow with what

makes what makes something scarce

right and if if you add two percent more

supply every year your stock to flow is

50 and you've got a 2 inflation rate

and that's reasonably scarce everybody

knows that if i can add 25 more to the

capital stock then it's not so scarce

gold had a stock to flow ratio that's

pretty high like it's 50 to 1 or

something but if you're a gold miner

gold miners mine they they mine

as much gold as they can they mine so

much gold that they pay a massive income

tax they pay a corporate income tax

then they pay off all their debt

then they pay a dividend in cash that

gets taxed to their shareholders and

they hold no gold on their balance sheet

right

because if you said to a ceo of a gold

miner are you gonna actually accumulate

10 billion dollars of gold on your

balance sheet they're like they'd be

like you're out of your mind they don't

think of gold as money they think of

gold as a commodity like soybeans or

cotton or corn or oil to be dumped off

and converted to cash and they want to

get it off their balance sheet so badly

they'll actually triple tax themselves

right you're paying the dividend tax

you're paying the corporate income tax

and you're loaning money to your bank at

two percent interest which is in an

inflationary environment that's gold

mining but now why does it by the way

why does that make sense because gold

isn't scarce because you can manufacture

infinite gold and it's going to lose its

value over time

with bitcoin

you've got a different situation bitcoin

is capped at 21 million

ultimately the stock to flow ratio is

going to infinity

but what's what's what's really

compelling in the last 12 months

is bitcoin miners used to be uh running

on uh dirty expensive energy in china

without banks with private banks they

were basically

private cash businesses so

they burn a lot of energy

they they create bitcoin they dump it on

the market for cash to pay their

expenses

well when that bitcoin mining moved to

north america

when those companies came public

marathon marathon and riot and when hut

8 came on the north american market in

argo et cetera all these all these

bitcoin miners now have access to the us

capital markets and what do we do in the

us better than anybody in the world

capital

right cost of capital is cheaper

you know in north america and especially

on the nasdaq and the new new york stock

exchange in the year 2020 and 2021 its

cheapest capital here cheaper than any

other country on earth maybe cheaper

than any other time on earth and bitcoin

mining is capital intensive

so

now you've got north american bitcoin

miners they can raise lots of capital

billions and billions of dollars of

capital both in the private markets and

the public markets you see it going on

that allows them to buy up all the

equipment so they buy all the advanced s

19 you know miners they buy out the

entire supply and those miners are

anywhere from three to 25 times more

efficient than the mining equipment that

was running in in the network in china

and the rest of the world

so

they've modernized the equipment

they've tapped in the public markets

and now

why would you ever sell something going

up in value 160 a year

right you only sell things that are

liabilities you don't sell assets so

that you know what's happened is they

now have access to credit lines

and equity and debt so that they can

mine the the bitcoin they don't have to

sell the bitcoin and in the extreme

cases like marathon

marathon raised hundreds of millions of

dollars and they bought bitcoin

back in february they bought it at 31

000 a coin

like 200 250 million dollars worth of it

some large amount no maybe 175 million

and the only thing you're thinking right

now brett is why did i buy more

like

why didn't they buy more right because

they basically added 200 million dollars

in shareholder value

in six months

by believing in their own product

so

what i say about bitcoin mining is any

rational

any rational bitcoin miner is long

bitcoin

if i go to you and i say i think bitcoin

is going to zero will you invest in my

company the answer is no

right bitcoin you've got to believe

bitcoins going up to buy a bitcoin miner

so bitcoin miners are naturally long

their shareholding bases are naturally

long and that's really critical because

because you know

i can list on my hands the only publicly

traded companies that are long bitcoin

microstrategy and every bitcoin miner

tesla square apple they're not long

bitcoin they've got the majority of

their balance sheets and fiat

instruments and debt instruments right

so only a company that's got more than

50 of its balance sheet and bitcoin is

long bitcoin

there are two ways to get long bitcoin

you can either do it the microstrategy

way

if you watched us

we did an announcement

we did a dutch auction

you know we went through a dutch auction

tinder process almost a share buyback to

invert our balance sheet to become long

bitcoin it's almost like taking yourself

public again

and then the bitcoin miners when they

come public that's what they're doing

they're getting long bitcoin

if you are long bitcoin

you can actually file a registration

statement and you can sell equity you

can sell converts you can sell debt

and you can do all that where the use of

proceeds is bitcoin

and what that means is that

the traditional conventional thinking is

uh bitcoin miners are dumping two

percent more supply on the market every

year and the stock to flow is 50.

but if half of them stop selling any

the stock to flow goes to 100.

when half of them are well capitalized

you know trading at 10x revenue and they

start buying the bitcoin

they buy all the supply mined by the by

the week miners stock to flow goes to

infinity

and if they and if they start buying

more than the amount mine stock to flow

goes negative

which means that

you know what what happens when i'm

valued at 10 20 30 billion dollars i

just go buy every other miner that's

private i roll up the entire industry

i take all the bitcoin off the market

right and at that point i have almost

infinite access i've created an equity

pump

where i could go into the public markets

and i could raise a billion dollars

you know brett like i raised 2.2 billion

dollars at blended rate of one and a

half percent interest

i can go and i raise billions of dollars

at one or two or three percentage or

make it junk debt the junk bond index

right now is four and a half percent for

a five-year money right so i go to that

market i start raising huge capital uh

at a cost capital three four five six

percent whatever you want to call it and

i put it into an asset which is yielding

170

a year for the past 10 years

you want to be conservative you can say

mike you're crazy it's not going to do

okay back it down by a factor of 10 and

say it yields 17 percent

borrow money at six loan it out at 17

arbitrage the difference

how how much are you going to do with

that well all of it

all of it what do i need i need a

publicly traded company that can file a

registration statement where are they

here in the u.s in north america it's

happening right in front of your eyes

and brett it's never happened in the

history of the world

you didn't see this with silver you

didn't see this with gold you've never

you didn't see us with mortgage-backed

securities

right mortgages aren't scarce houses

aren't scarce buildings aren't scarce

land's not even scarce silver gold and

oil are not scarce

there's only one institutional grade

property that is truly scarce that's

ever become an investment great asset

for the public markets and that's

bitcoin

and that was not the case two years ago

it is the case now

the mark i mean look at the stock prices

of all these bitcoin miners right and

stare at it and think about it a little

bit

and ask yourself the question what

happens if a company generating 200

million dollars a year in revenue

running an 85 margin gets valued at 15

times revenue

what happens next right there's a fire

here

right and and the simple thing to do is

just

roll up the entire industry and buy all

the other miners the next thing to do is

buy all the equipment because it's fixed

and the third thing to do is buy all the

bitcoin

right and and so

i think that

stock to flow goes to infinity then

stock to flow goes negative

and if you're a macro investor looking

for an inflation hedge or a scarce store

of value is there any better store of

value than an asset which is which is

actually going to get progressively more

scarce

and like if if you think of it as a fire

i call this a fire in cyberspace if you

think about this as a fire it burned for

10 years at 170 percent growth and then

hit the public markets last year and it

started burning twice as hot

it's like a fire burning through a

warehouse that all the sudden you know

starts burning it moves into barrels of

oil and then barrels of explosives or

nitroglycerin right this thing is

hitting incendiaries right now how do

you get a fire going you blow oxygen on

it

what is oxygen to money a monetary fire

it's like billions of dollars of cheap

liquidity cheap debt

cheap equity that's oxygen to a monetary

fire that's what's happening right now

look michael i i think that the miners

hodling and the change in the supply

demand dynamic is is one of the most

important developments you get a lot of

credit for i think people are missing it

but but i i do want to ask a question

about scarcity right because we know

bitcoin is the only asset in the world

right where

the supply does not respond to an

increase in demand and that's why you

know we've had and you know we i agree

we're going to have these parabolic

moves and

and maybe some that will blow both of

our minds away

but at the same time

bitcoin's percentage of the overall

crypto market has declined

so there is capital

right that is being siphoned away like

people are saying i'll invest x and

crypto

they're buying some ethereum they're

buying some solano and i would tell you

you know this is a

in my my household you know bitcoin is a

family affair my middle daughter just

started working at coinbase after

graduating brown she's going to try to

streamline the kyc process

she would say that bitcoin is a boomer

crypto you and i are boomers

and she owns bitcoin but she also owns

solano she owns

ave and uh so what are your thoughts on

that like is the scarcity being diluted

by other cryptos

and and they taking share from from

bitcoin demand yeah i don't think so i

think there's two markets here there's a

crypto market which is really a tech vc

market

and and that's the east solana cardano

binance smart chain fill in the blank

what their their best hope is that one

of them or some of them can

dematerialize

the banking and the exchange sec segment

of the economy like dematerialize jp

morgan or nasdaq or new york stock

exchange and

and

it's looking increasingly like binance

and coinbase are going to demater are

the the competitor to nasdaq and new

york stock exchange more so than the d5s

in my opinion but

but uh the crypto sector is all about

dematerializing applications and banking

and it's a fintech play

and um

on the other end bitcoin and and digital

property is about dematerializing gold

commodities and demonetizing property

and buildings and land and real estate

and ultimately money

and if you want if you want to look at

the two of them right if you want to

demonetize property you want something

which is industrial strength and will

last forever and that's a proof-of-work

network you want uh real money with real

energy will provide you real security

and the closest competitor to that is

bitcoin cash brett and it's one percent

of bitcoin going to zero i mean it's

it's it's a disastrous joke right

ethereum is sitting in the middle

because they're trying to migrate from

proof of work to proof of stake but

clearly their future is in proof of

stake and proof of stake is a

a necessary technology to try to get the

speed and the performance to be an

exchange that's why they're doing it

but

you know

that entire

that addressable market is

is the next generation fintech market

and you will compete with jp morgan and

square and paypal and coinbase and

binance and every and you know

citadel high-speed trading and they'll

compete with each other and solano will

compete with cardona we'll compete with

binance marching we'll compete with eth

and so ultimately you've got execution

risk you've got competition risk

you've got all manner of regulatory risk

right i mean you want me to catalog how

many different ways can the thing fail

like would you move to a country that

told you they were going to disband

their military and their law enforcement

next year but it should work out well

because that's the ethereum value

proposition right now right you don't

you don't know how the proof-of-stake

thing is going to work you don't know

if you read

the president's working committee report

this week you know that there's active

review of all the d5 protocols

you know at the administration level

and the writing is on the wall it's

pretty clear most of them are securities

others are commodities and derivatives

they're all gonna it's likely that the

regulators are going to apply regulatory

oversight to the defy exchanges to all

the exchanges that handle all those

tokens into all the developer groups

that actually handle them

so

you know you've got you've got does it

pass the microstrategy test well the mic

strategy test is for an institutional

investor it's not for a vc

it's not for an individual speculator

if you're an institutional investor will

it be banned will it be copied will it

be hacked

and the answer for bitcoin is no no no

the answer for everything else is yeah

they're gonna get banned they're gonna

they're already copied there's like 48

dog coins in the you know like there's

10 elon musk coins there's two sailor

coins they're getting copied every hour

right

is you know and will they be hacked they

get hacked every week

right and and so

there's a massive amount of uncertainty

and risk

that you're taking on there

and it's those things are not robbing

liquidity from bitcoin if you understand

why you're buying bitcoin you're buying

bitcoin because you don't want to

monetize real estate in canada and you

don't want to put your money in the s p

index and you don't want to hold gold

and you want to hold and you want to put

like

you go borrow 10 billion dollars and buy

10 billion dollars of bitcoin right and

lock in that trade that's something you

would do with something that was

bulletproof you're not going to go bar

10 billion dollars to buy shiba coin and

lock in that trade right those are

different things right

that that's

in the in the spectrum you've got the

savers

the savers are going to convert a weak

asset to a strong asset that's like

taking pesos and converting it to

dollars and taking dollars and

converting it to bitcoin

that's that's a saver the investor

strategy is i take

portfolios of risk i'm going to bet on

apple versus google versus jp morgan

versus ethereum versus solana you know

as technologies and which technology

wins

the uh the traders are trading

portfolios of risk derivatives and yield

curves and they think that this will

move in line with that

and uh the speculators

you know there's in it for sheba bow wow

right and this is up and that's down

right and and the meme coins and it's

all good fun and it's entertaining

i would say the crypto world is you know

it's got all of those classes of players

in it jumbled together and

probably the most important thing for an

investor

is figure out are you an institutional

are you a saver

are you a tech vc

are you a gambler

are you a trader

you're a trader and you're fixated upon

trading shib versus doge versus solana

versus cardano maybe there's something

there but

but you know i'm not going to stand up

in front of a billion people and tell

them that the solution to their monetary

problems is mastering trading or

mastering speculation and in fact brett

the fundamental theme here is i don't

even think it's wise to be betting on

apple versus amazon versus facebook

versus google versus microsoft

the whole point of this is there's

massive amounts of investment risk

you know buying exxon or british

petroleum you know you could buy a

hundred billion dollar blue chip 50 year

old 100 year old company it's still got

massive risk because of regulatory

intervention

and tariff and trade and execution

so the point of bitcoin is to go to the

far left end of the risk curve i don't

want to take any of that risk

and the point of a lot of the cryptos is

to go to the far right end of the risk

curve

where here you're taking

you're taking so much risk you don't

even realize the risk you're taking

right

i think the regulators have strongly

implied brett that just about every

single thing trading in the space is a

security other than bitcoin

right

gensler was asked point blank in

congressional testimony is if

and bitcoin property

and he looked

he looked at the questioner he refused

to answer

he said i'm not going to speculate

individual token but if your token

if a token had an ico related to it and

this group of people then it looks like

an investment contract or an investment

company he strongly implied

that eth is a security along with

everything else

and so

i just don't think in good conscience

any responsible institutional investor

can hold anything in the crypto

ecosystem other than bitcoin it's the

only

truly decentralized commodity

everything else is a risk you you're

taking your own peril and like what'll

happen i don't know what'll happen you

can make money

right you can make money but as a ceo of

a publicly traded company

like i i just can't see myself holding a

security token

or trading

or investing on a platform that relies

upon non-kyc aml

you know

derivatives trading with leverage

without a license you know in the us

jurisdiction like why would you want to

do that

i think you just hit on sort of the key

point michael which is when you think

about the big pools of capital and

institutional pools of capital

pension funds insurance companies

boomer high net worth right because it

is still people 50 to 75 that have the

massive amount of wealth united states

when they buy

an asset in the cryptocurrency sector

they're going to buy bitcoin they're not

even going to think about solano right

they're only going to think about

bitcoin

um and and i think we both believe that

capital is coming i got two more

questions for you to finish up

one

like what do you worry about like if

we're wrong why are we wrong

we might be really right yeah we got to

show some humility right we might if

you're watching me on twitter you notice

i'm not exactly worried no you're not

but you know you know what i'm worried

about i'm worried a lot of people