Michael Saylor on Market Overtime, Strategy's $150k Year-End Target for Bitcoin

Hello and welcome to Market Overtime.

[music] I'm Sam Bardis. Our next guest

is an MIT graduate, an Air Force Reserve

member, and an inventor with close to 50

patents under his name. All impressive

titles, but you probably know him as the

pioneer in Bitcoin. I'm very pleased to

introduce now Michael Sailor, executive

chairman of Strategy. Welcome to Market

Overtime here on the Schwab network.

Thank you for hosting me.

>> First and foremost, congratulations on

becoming the first Bitcoin treasury

company to be uh rated by S&P. How does

it feel and what does it mean?

>> Well, I think it's a a a very

legitimizing step. It's auspicious for

the industry. Um this year we launched

four digital credit instruments. U

Strike, Strife, Stride, and Stretch.

They were all IPOs. They all publicly

trade. those are backed by Bitcoin and

uh they've been very successful but

they've been unrated and so many many

fixed income investors and and you know

insurance companies and large pools of

capital they would like to buy them

because they have superior yields.

They're really cool instruments but they

can't without a rating. And so part of

the maturation of the entire asset class

is getting the traditional credit rating

agencies to begin to acknowledge digital

credit. And this was the first uh credit

rating but of a Bitcoin treasury company

ever in the industry and we've been at

it for 5 years. So I think it's a big

milestone.

>> It certainly is a significant step and

uh I just want to sort of talk about

what you do because you mentioned some

of your product offerings and we will

dig into that in just a little while.

But what is the best way to understand

what you do and how?

>> Well, it [clears throat] all starts with

Bitcoin, a digital commodity. Bitcoin is

digital gold. Uh it turns out that it's

also a global asset. It trades 24/7 365.

Uh you can sell it short with 20x

leverage on a Sunday morning and then

you can reverse and go long 40x a few

hours later from Singapore crossrading

with someone in Europe and that makes it

very volatile but very desirable and for

a conventional investor makes it a

little bit scary. The history of Bitcoin

for the past five years is it's been

appreciating about 50 to 55% a year and

it's been about 50 V. So three times as

volatile as the S&P index. If what you

wanted was 50% ARR and 50 V, then you

would just buy the raw commodity. But it

turns out that uh if you walk down the

street and you ask people, would you

like to generate 50% returns a year, but

you might wake up and lose 25% of your

capital in one week? Most people don't

want that. So they don't like the

volatility. What our company does is we

buy Bitcoin and then we issue credit

instruments against Bitcoin. So, for

example, some people would like to have

75% of the upside, 5% of the downside,

and an 8% dividend while they wait.

That's a convertible preferred, and

that's what strike, STRK, is it's most

of the upside of Bitcoin, very little

downside. It's like six, seven times

over collateralized, and it's a

dividend.

Other people, [clears throat] they don't

want that. They just want, for example,

10% dividends forever.

I don't care about anything more than

that. But if you pay me 10% dividends

forever, that's interesting. So, we just

take an asset that's very volatile that

we ex we expect Bitcoin to go up 30% a

year for the next 20 years. We expect it

to go up more than 20% forever. So, it's

not a problem for us to give 10%

dividends because that's our business

model. But for the investor, the

investor would like to see that we're 5x

or 10x over collateralized, right? So

for every $10 billion of Bitcoin we own,

we might sell a billion dollars of that

credit with that hundred million a year

dividend stream. And so you're the

credit investor, you're just getting

that pure yield. And from our point of

view, we're in we're paying 10 and we're

getting back 20 or 30,

>> right? So it makes sense for us. And

then um you know there are other flavors

like we've created this product stretch

STRC which is a treasury credit

instrument. The idea of that is it's

just a high yield bank account like

we'll give you a bank account or we'll

give you a money market type instrument

that pays 10% yield and the idea is for

it to be a one-mon duration. So it's we

strip all the volatility away. We target

a $100 par value. You take cash that you

don't need for six months, but you want

to earn 10% instead of earning 4%. And

you buy that instrument. Now, you don't

want the upside of Bitcoin. You don't

want to buy a lot of people don't want a

20-year bond. What they want is they

want a money market, right? And so, you

don't want infinite interest rate

duration. You don't want delta. You

don't want volatility. Just give me pure

yield. That's that's probably the most

refined digital credit instrument. So

what our company's doing is we have a

lot of capital. We have about 70 to75

billion dollars worth of Bitcoin on any

given day. We sell those credit

instruments and we have about $6 billion

of those uh credit instruments

outstanding. They're so way

overcolateralized. Then we generate

various types of dividend streams or

upside with them.

As it turns out, we expect Bitcoin to

appreciate 30% a year,

>> but we don't pay more than 10% to 12%

dividend streams. So, so our common

stock shareholders get the excess. So,

what happens is

we take that volatility and performance

of Bitcoin and we strip the volatility,

the risk and the performance off and we

sell you 10%, 12%, 8% as a credit

investor. And then the extra performance

and volatility goes to the equity. So

MSTR which is our common stock is more

volatile higher performance than

Bitcoin. And what you have is some

people want more Bitcoin performance and

they want to be on a roller coaster and

they buy the common stock. And some

people want less and they just want the

pure dividend stream. And of course the

people that just love Bitcoin and they

don't want any counterparty risk. They

don't want owner security. They just buy

the commodity Bitcoin. And so that's how

we sit in this ecosystem,

>> right? So it's almost like a levered

bet. I mean, it's a way to be exposed to

Bitcoin without having to actually buy

the actual commodity itself. There is so

much to unpack there, Michael. I mean,

you just talked about, you know, how

much Bitcoin you have, $75 billion. Um,

just talk to us about how much that

actually represents and what's your

endgame here. Well, we own about 640,000

Bitcoin and that's about three about

3.1% of the network. 3.1% of all the

Bitcoin that will ever exist

we have acquired. Most of that we've

acquired with equity capital about $50

billion plus of common equity about $6

billion worth of uh preferred equity and

um and so the company is substantially

equity and our primary business line is

to issue this credit instrument and and

every year we sell a bit more equity and

we sell a bit more preferred equity and

we buy more Bitcoin. So like this week

we bought like 390 Bitcoin. Every week

we'll acquire a bit more and we just

continue to grind up and as we do that

uh Bitcoin becomes more scarce and

because we're buying so much of it that

means the price over time has to

appreciate because all the natural

sellers get taken out of the market and

no one wants to sell unless you raise

the price for it.

>> Right. So you are really a pioneer in

what you do uh with regards to Bitcoin

treasuries. I mean, how many companies

are out there now doing what you do and

do you welcome that?

>> Yeah, in in August of 2020, we were the

first public company to make any

meaningful commitment to crypto assets

or or to Bitcoin specifically. And we

bought $250 million worth of Bitcoin in

August. And then we followed up with

another $175 million a few weeks later.

We were the first. Then came Block. Then

came Tesla.

Then came uh half a dozen or a dozen

other uh Bitcoin miners and um by about

a year ago there were maybe 60 companies

that owned Bitcoin and then it doubled

and now I think there's probably 180

companies that own some amount of

Bitcoin on their balance sheet that are

publicly traded. Um we're 10x larger

than the next largest one in terms of

holding. So So we're the 800 pound

gorilla in the space. We, you know, I

think probably 1.1 million Bitcoin are

held by public companies and we own

about twothirds of it. So, we're the

largest player. We're the first ones to

actually issue digital credit

instruments like these preferreds that

are trading in the public market, but I

expect that others will follow. There'll

probably be about half a dozen companies

over the next 12 months to 24 months

that will follow and issue those kind of

credit instruments. Um, we welcome those

[clears throat] companies. I mean, the

truth is every single company that

capitalizes on Bitcoin takes more

supply. There's only 21 million Bitcoin

ever. So, you know, if Microsoft turned

around tomorrow and bought a hundred

billion dollars of Bitcoin, that would

be great for us,

>> right? So, the more companies that buy

Bitcoin, the better. Most are just

capitalizing on it. They're just buying

it in lie of holding treasuries or

holding cash, right? It's like a company

can own real estate. A company can own

own any other asset. The company can own

Bitcoin. So most do that. There'll be a

few pure play treasury companies that

will also issue digital credit against

their underlying Bitcoin. But you need

to have, you know, more like $10 billion

of capital before you can get to

critical mass where you could do 500

million and billion dollar IPOs of

credit instruments that would be liquid

in the market.

>> Okay, let's just take a step back. I

mean, obviously you founded Strategy in

1989. I just want to get a sense of what

Bitcoin is to you. I mean, you've called

it digital gold, but you've also talked

about how, you know, the fact that it's

evolving faster that people can digest,

but also uh the fact that there's a lot

of criticism out there and it will

continue to be misunderstood.

How do you speak to that? I mean, how do

you reassure the markets about what

you're doing out there? The best way to

think about Bitcoin is it's it's the

world's first example of a technology

that allows individuals or corporations

to tightly bind economic energy to their

person. Like if you know you have a

hundred families and they all have some

money but they don't trust each other,

they don't trust their bank, they don't

trust their government, they don't trust

any company but they want to keep their

money. So they come up with the idea of

a digital bank. You write it in software

and the digital bank has 21 million

coins and and anybody can buy any amount

of the coins in the bank and that

becomes their bank in cyerspace.

Now the question is who runs the

software? Well I might trust you but I

won't trust your great great

granddaughter.

So we all run the software. Everybody

runs the software and then the software

continually cross-ch checkcks everybody

else. And so it's a it's a very elegant

decentralized way to create a property

network or a decentralized banking

network. Um if it's a protocol for

economic

pro prosperity, right? So it's like you

speak English, I speak English, we can

communicate. You use Arabic numerals, I

use Arabic numerals. We could do math

together. When you offer me nine nine

bananas, I know what nine is, right?

Because we both use the same numbers in

the same language. Well, what if we want

to trade together and we don't want to

rely upon any government or any bank and

we want to do it for a thousand years.

So, Bitcoin represents that

breakthrough. It's the first time in

human history that an individual can own

anything without asking the permission

of someone more powerful than them. If

you have um if you have a thousand

bitcoin and you have the private key,

nobody can take it away from you, you

can carry it with you. You can send it

anywhere on earth. You can take it with

you to the grave. You solve the problem

that the pharaohs in Egypt couldn't

solve. How do you take your money with

you? Right? So, that's a big idea. Let's

just call it a bank in cyerspace where

you put your money and no one can steal

it. A and uh it's currency in the sense

that there's never going to be more than

21 million. So when you buy a Bitcoin,

you're buying 121 millionth of all the

money in the world forever.

That's the idea. What do we call that? I

call it the world's reserve capital

network,

>> right? It is capital. What is capital?

Long-term store of value. You're a rich

person. Where do you save your money for

the next hundred years? Not in a

currency. You don't buy pesos. You don't

buy euros. You don't buy the US dollar.

You don't buy the yen. If you're a rich

person and you want to save your money

for 100 years, you're buying equity,

private equity, public equity. Maybe

you're buying scarce desirable art.

Maybe you're buying real estate,

commercial real estate. So, the capital

assets of the 20th century were like the

S&P 500 index or New York or London real

estate or maybe sports teams if you're

welcome, if you're lucky enough to be

able to buy one. But, um, but what

Bitcoin represents is digital capital,

right? If I have a bank and it's a

network, a bank, I can move the money. I

can move a billion dollars from here to

Tokyo in a few minutes. So then that way

it's a network. But it's also capital

itself. If if I gave you $10 million and

I dropped you in the middle of Africa

and I said, "Buy anything you want. Buy

any equity, buy any land, buy anything,

buy any bond, buy anything, and but you

got to keep it for 30 years in Africa."

or I said, "Or you could buy $10 million

of Bitcoin and by the way, you can send

it to Singapore or London or Paris or

New York in two minutes from your

phone."

>> I would submit to you there's not a

single thing you would buy in Africa.

There isn't the capital asset that you

want to give to your family or your

great grandchildren. The same is true.

If you actually talk to people in China,

they don't want to keep their money in

China. There's a law against removing it

from China. in Russia, in Ukraine. If

you talk to Europeans, they don't want

to have their money locked down in any

country in Europe, right? They they want

to have their money. Where do people

want their money? They want it in the

US, right? How about Brazilians,

Argentennians, Venezuelans? Most of the

world doesn't want to take all of their

family's wealth and store it locally in

real estate, local stocks, local

currency, local banks. That's why there

are laws against them removing the

money. And the problem with gold is if

you have all your money in gold in

Africa, you can't take it through the

airport. You can't take your, you know,

if you have all your money in gold in

Argentina, you can't bring it out of the

country. So the value of Bitcoin is it's

digital gold. So if you have your

family's assets in Bitcoin, you can take

it anywhere you want. No one can stop

you from removing it from the

jurisdiction. And the more insecure you

are about the country you live in, the

bank you do business with, the nation

state you rely on, or your economic

future, the more desirable it becomes.

So in a nutshell, Bitcoin represents

property rights for the human race. It

represents economic prosperity, you

know, and we'll call it colloquial

digital gold, but it's 100 times better

than gold. You cannot teleport gold from

here to Tokyo with the blink of an eye,

right? And if you have gold, I can shoot

you and take your gold. If you have

Bitcoin, I can kill you, but I don't get

the Bitcoin. And so it is it is a state

change in the economic vitality of an

individual, a company, a family, a

nation state, the human race. And uh and

so that's why all of us in the in the

crypto community we you know we really

um

we revere Satoshi and we think about the

world before Satoshi and after Satoshi

because before Satoshi everything you

owned was subject to the permission of

someone more powerful than you. And

after Satoshi after January 3rd 2009 you

could own something for yourself that

[snorts] no one can take away from you.

And that is what's caused the entire 750

million person crypto movement.

>> And it certainly has been gaining

traction. I mean crypto has got so many

tailwinds this year. I mean more

regulatory clarity and support, more

corporate adoption, institutional

appetite and also legislative wins. I

mean which one has been the biggest

tailwind for the space and what

continues to drive it higher? You know,

uh, there's been about half a dozen

massive milestones in the past 24

months. The first one was the approval

of spot bitcoin ETFs in January of 24

and that sparked the explosion and the

explosive success of IBIT which is uh

went from 0 to$undred billion dollars in

less than two years and it's the most

successful ETF in the history of Wall

Street. So that was a big deal, the

endorsement of the SEC. Uh the second

big deal was the red sweep in November

when you had a pro- crypto, pro- Bitcoin

administration.

We went from one supporter in the

cabinet, Gary Gendler was a Bitcoin

believer, one out of 12, to all 12

cabinet members, the president, the vice

president, the head of the SEC, the head

of the CFTC, the head of the treasury,

the head of commerce, the head of, you

know, RFK, the head of, you know, the

head of uh, you know, of the home the

housing authority, Bill Py, you know,

Kelly Laughler and Howard Lutnik. So you

all of a sudden have 12 positive cabinet

members from one and that was a big

deal. The third big uh milestone was uh

Fazby's uh adoption of fair value

accounting for crypto assets. Before

that point and that took place at the

beginning of this year, beginning of

2025. Before that point, if you're a

public company, you could mark down your

losses on Bitcoin, but you could never

realize the gains, right? It's literally

an asset where you could only lose, you

could never win. Right? So the entire

accounting role was a deck stacked

against you. And so fair value

accounting meant that our equity, for

example, went from three billion to 50

plus billion in 12 months, right? But if

it wasn't for fair value accounting, we

would still have $3 billion instead of

50 billion. So So that was very

prejuditial and hostile accounting and

that flipped in January.

I think the fourth big milestone is all

of the um pro- crypto and pro Bitcoin

guidance that came out of Treasury,

the OC, the FDIC and the Federal

Reserve. And and uh the key point there

is most banks in the United States and

the rest of the world were afraid to

custody Bitcoin. They were afraid to

lend against it. They were afraid to do

business with it uh under the previous

administration. And I think the guidance

that came out of the current

administration uh delivered a message

which is uh not only is it safe for you

to custody and extend credit against

these assets, it's really imperative

because the United States wants to be

the crypto capital of the world and we

want to lead in digital assets and that

means our banks need to lead in digital

assets. So that that you can attribute

to the president and to the secretary of

the treasury Bessant. I think the next

thing was the passage of the the uh

genius act uh championing by Senator

Hagerty and that created a stable coin

um environment in the United States and

the idea there is why can't we tokenize

the US dollar and ship a trillion of it

to the rest of the world or maybe 10

trillion dollars of it to the rest of

the world because money wants to move at

the speed of light and this is uh this

is the the critical part of the crypto

ecosystem. So, so pe the the last two

banks that that moved crypto dollars

around were Silvergate and Signature

Bank and they were assassinated by the

previous administration. They were they

they were shut down on a weekend for no

good reason. They were perfectly well

capitalized and they were they were

literally murdered uh by regulators. So,

you can imagine that the banks were

afraid to get involved with crypto under

the previous administration.

you know, getting a supportive White

House, a supportive cabinet, a

supportive head of the treasury, and

then a law that says that it is legal

for you to do this, I think, was pretty

important. Then that has resulted in an

avalanche of institutional adoption. And

now you have companies like JP Morgan,

right, and Bank of America and Wells

Fargo and BNY, Melon and PNC Bank and

City that are all announcing their

support for this asset class. And if the

trillion dollar banks are willing to

custody and they're willing to extend

credit and they're willing to handle the

asset class and they're willing to bank

the crypto industry, that's really uh

the necessary condition to 10x from

here. like Bitcoin got to a 100,000

without their help, but getting to a

million requires the banks to to bank

the asset. And so the next four-year

period is really about banking Bitcoin

and and the support for digital assets

in general by the major establishment of

bankers in the United States and

everybody else in the world, right? You

can imagine the bankers in Australia,

Canada, Singapore, the Middle East and

Europe, Mexico, southern they all follow

the US banking standard. And so what you

have is an avalanche or a sea change

here and the tail the headwinds have

become tailwinds.

>> Okay. So that's what got us here. Uh

let's just talk about the short term uh

2025 year end. Where does it end up?

Because I've heard everything from 100

to 200,000.

>> Yeah. Well, the consensus of all the

equity analysts, and there's like a

dozen of them that cover our stock, is

north of 150, 150,000.

Our our corporate guidance is targeted

at $150,000 by the end of the year.

>> Right. Okay. And sort of looking further

out, have you got a sort of a 2030

target?

>> Um, I don't have a specific target, but

in the four to eightyear time frame, I

think uh Bitcoin goes to a million

dollars a coin. My 20 21-year

expectation is Bitcoin appreciates about

29% a year for 21 years and that leaves

it at $21 million 21 years from now. So

I I think that Bitcoin will appreciate

in the range of 29 to 30% a year for 20

years from this point.

>> Okay. You seem to like that number 21.

Um just in far as far as what we have to

work with through the end of the year

now I mean you know is there a favorable

macro environment to support that as

well? I think the drivers right now will

be uh Fed Fed decisions with regarding

uh monetary policy. Clearly uh that

drives every asset class and we've had a

fairly uh tight monetary policy right

now and and if that policy loosens

that'll be a driver. I think

other [clears throat] than that uh the

industry is volatile and the and the

primary actors in this case are the

banks and every time a bank makes a

major announcement about Bitcoin

acceptance or crypto adoption those are

all very positive for the asset class

and those should come progressively.

>> You know it's interesting just as far as

the more recent price action that we've

seen off the back of October the 10th. I

mean, we did certainly see risk on for

equities, but it feels like Bitcoin's

kind of been stuck and sort of lost the

momentum. Why is that?

>> I think it's a $2.5 trillion asset class

that's been unbanked. So, imagine that

you started a company, Nvidia, and you

gave 90% of the stock to the employees

and they went from a dollar to being

worth $3 trillion, but no bank would

give them a loan against it.

So you're an employee, you've got you've

got trillions of dollars of capital

gains, but no one will give you a nickel

loan against you cannot get a loan. You

could post, you know, you have 10

billion dollars of Bitcoin. You can't

get a$1,000 loan from a major bank right

now. So what happens is the uh the OG

crypto holders, the ones that actually

had the capital gain, the only path they

have the liquidity is to either

rehypotheate the Bitcoin and it gets

shorted in the market or to sell the

Bitcoin. So I think we're working

through a period where 10% of the supply

or you know it wouldn't what percentage

of the equity in you know in your big

tech company would be sold by employees

you know when they all got insanely rich

probably 10 20% right they would sell at

least so we're waiting for that to boil

off and um we're at the point where

everybody knows that Bitcoin is is

digital gold and it's got institutional

acceptance But banks are are very

careful, bureaucratic and processdriven

creatures and and they should be right.

I mean, you know, if banks get out of

control, right, there's there's hell to

pay. So, I think it'll take four years

for the conventional traditional banking

establishment to get spun up where

they're custodying the asset and they're

extending credit against the asset and

and it's worked its way into systems,

right? Right. I mean, uh, Bill Py has

directed Fanny May and Freddy Mack to

start to recognize this as good

collateral, but how long will it be

before you can post your Bitcoin as part

of your conforming loan collateral? And

it's a government quasi government type

agency and the credit rating agencies,

they're starting to cover us. Like, we

just got covered by S&P. But how long

how long before they acknowledge Bitcoin

as collateral or capital that's just as

good as holding a share of Nvidia stock

or Apple stock? And I think reasonably

speaking that's a two to fouryear

adoption curve. So between 25 and 28 the

traditional finance infrastructure

to bank and collateralize and issue

credit against this will come online.

When that happens, if you think about

every asset class, I if you can't get a

loan to buy a car and if you can't get a

loan to buy a house, what happens to car

prices and house prices, right? At the

point that the credit market forms over

the asset class, the prices move up. So,

what you see right now are the bank

credit markets, the corporate credit

markets, right? And the public credit

markets are forming on top of Bitcoin.

and as they form that's going to be very

positive for the asset itself.

>> It's about those believers isn't it as

you say and you actually have previously

said that each quarter you gain more

believers. Can you give us a sort of

sense of what you've seen in the most

recent quarter?

>> Well um I think that we started with uh

the early uh shareholders of strategy.

They were Bitcoin and crypto believers

who were prohibited from buying Bitcoin.

uh due to regulations in the various

markets.

So, you're a Bitcoin believer and you're

a retiree and you live in the UK and you

have all your money tied up in your UK

retirement plan. It it's illegal,

impossible to buy Bitcoin with that

money, but you could buy a stock. So,

you'd buy MSTR.

Same in Australia. actually everywhere

in the world there are large pools of

capital that are tied up in in these uh

tax advantaged accounts IAS 401ks etc

where you might be able to buy uh

security but you can't necessarily buy

uh you can't just say I want to buy a

bunch of my my favorite artist paintings

that are you know art Basel so uh the

early believers were the crypto

enthusiast that had capital tied up and

and mainstream investors

big investors that actively managed

funds at Capital Group or Morgan Stanley

that they believed in the Bitcoin

thesis, but but they had pools of

billions of dollars that were mandated

to make equity capital investments. 99%

of the professionally managed money is

mandated to equity or credit. They can't

invest in a commodity. So, so we offered

the first equity to the equity capital

investors and um what we followed on

next was a set of convertible bonds. We

became the the the biggest convertible

bond issuer in the world and they were

the most successful convertible bonds

and there was a lot of money earmarked

to convertible bonds. So after we became

a substantial part of that market, we

outgrew it and then we went on to

preferred and in the preferred market we

started creating these publicly traded

digital credit instruments.

They were targeted a different user

base. I mean the person that wants to

collect a 10% dividend forever, but they

don't want the Bitcoin upside. It's

like, okay, I I hear you when you say

you expect 30% a year for the next 20

years, but just guarantee me the first

10 and you can have the next 20, but

take the volatility away and then take

the risk.

>> Like, right, there's a lot of people

that would rather have 10% after tax

with 1/100th the risk,

>> right?

>> And so that's a different class of

investors. So we have rotated um from

the true believers to uh to the hedge

funds that like you know the millenniums

and sororos and citadels that wanted to

trade and hedge the convertible bonds to

the credit investors

that want long duration sophisticated

credit and then with stretch it's just

money market investors I have some money

I just want more than zero but I don't

really want to risk the principle so

much.

>> And so that last set of investors are,

you know, retirees, mainstream retail. I

think we had $600 million of retail

demand uh for our stretch IPO in two

days. So in 48 hours, we had $600

million of demand. And that was an order

of magnitude larger than the retail

demand for our other, you know,

instruments. So right now this is

migrating to family offices, you know,

retail investors, high netw worth

individuals and and of course fixed

income investors like you know PFF which

is like Black Rockck's preferred fund. I

think like three and a half to 4% of

that fund is invested in our credit

instruments

>> which didn't exist 12 months ago. So

we're we're now starting to move into

credit indexes. Of course you're a

credit investor, you have to buy credit.

you're an equity investor, you have to

buy equity. We're we're also in equity

indexes. For example, our biggest

shareholders are Vanguard and Black

Rockck through their passive equity

index fund. So there's a lot of pulse

capital in the world. Um some of them if

you lived in Africa and you needed to

flee the country and you didn't trust

your bank, I would say buy Bitcoin, put

it on your own hardware wallet because

you can't trust the bank,

>> right? But but that's one class of

Bitcoin investors. But if you're an

investor in in the United States and you

have pools of capital earmarked to

equity or credit, then you probably want

something created by a company like

ours.

>> There had been a view out there that

crypto was uninvestable without the

regulatory framework and guardrails in

place. But we have seen these sort of

legislative wins as you mentioned and we

still got to 100,000 to your point

without that. Um I'm just wondering you

know talk us through strategies

involvement in the latest legislative

efforts now to really regulate and

create those guardrails and construct

the infrastructure for everyday people

to understand and access and have that

exposure to crypto.

>> If you look at the digital assets

industry today you can divide it broadly

into two uh two segments. One segment is

digital capital and that is Bitcoin.

It's dominated by proofof work networks.

Bitcoin is 99% of all the energy and all

of the capital in that side of the

industry. And digital capital means

digital gold. And that means, oh, I want

to buy something without counterparty

risk and hold it for 100 years. And what

do you do on top of gold? You issue

credit. For 300 years, the Western world

ran on gold back credit. All of our

currencies, all sovereign debt, all

corporate debt was in essence a form of

gold back credit.

So, so the part of the industry which is

which is most traditional and

conventional is digital capital, digital

credit all basically centered on Bitcoin

and Bitcoin treasury companies and

that's what our company strategy does.

The other half of the industry is

digital finance and that is all about

tokenizing currencies, tokenizing

securities, stocks and bonds, tokenizing

real world assets, tokenizing brands,

right? It's Joe Rogan token, right? It's

a meme coin, but it's also uh the

dollar, right? It's also a stable coin.

>> So, that opportunity is why don't we

create 10 trillion dollar worth of

stable coin and export our currency to

the world and move the money at the

speed of light and let the computers

trade with themselves a million times a

second? Why not? And that's also about

capital formation. Like, what? There's

40 million companies in the United

States. Why can't they all just issue

their own token to raise capital, right?

To tokenize your country club

membership, tokenize your restaurant,

tokenize your hotel chain, whatever, you

know, Katy Perry token, Joe Rogan token,

everybody token. Right now, you want to

go public, it's uh $40 million in four

years in an army of lawyers. Well, what

if I just wanted to spend the weekend or

four hours or four days and I wanted to

raise money for my $2 million company or

$20 million company? So, capital

formation is another killer application

of digital finance.

The third killer application is I

tokenize a share of Apple stock. Okay,

why why can't I just send Apple stock

between India and Pakistan on Saturday

afternoon on an Android phone? Okay,

what are you doing? what you're you're

you're basically moving the securities

market at the speed of light. Everybody

wants 24/7 365 trading.

>> And uh if I can self-custody uh my

Bitcoin, why can't I self-custody a

million dollars worth of Apple stock?

>> And if I can self-custody, maybe I can

actually, you know, get bids from the

highest bidder and I can send a million

dollars of Apple stock to Singapore and

get paid for it. So, uh this entire area

of digital finance,

this is very entrepreneurial. was all

about innovation. It's it's it's much

more sophisticated and and that is the

other half of the crypto market. Now,

the first half of the market, digital

capital, digital credit, that's got

regulatory clarity now, right? Uh

Bitcoin is digital capital. The

president of the United States has said

it, you know, it's been in it's been the

secretary of treasury, they've all

clarified that. So that's pretty much

just about issuing traditional

conventional credit instruments, taking

them public on capital markets. And if

there's any hoops to jump through, it's

like how do I sell Stretch in Euros

[snorts] in Switzerland and get the sign

off from the the European Union, the

Swiss regulator, the exchange, right?

But it's not new law. It's traditional

finance law. The other part of the

equation requires clarity. I mean,

literally the act clarity. And so the

next big crypto bill is the bill that

defines and and creates the bright lines

and and empowers what can you do with

digital currency? What can you do with a

digital token? H how do I tokenize my

share of stock? How do I tokenize, you

know, STRC and let it trade at the speed

of light in Singapore on the weekend on

a crypto exchange, right? It's not clear

how to do that yet.

>> Is there demand? Yeah, there's hundred

trillion dollars of demand, but uh I

think that there's bipartisan consensus

that we need that bill, that bill will

get passed.

We don't know what the final bright

lines in the bill will be. And once the

bill is passed, then it'll be clear, you

know, what you can do and what you can't

do. And so I think that if you're an

institutional investor or a conservative

investor, right, you can buy Bitcoin,

hold it as a store of value. You can buy

digital equity or digital credit

instruments backed by Bitcoin. That's

all fairly straightforward.

I think uh in the other part of the

industry, the digital fines part of that

industry, it's it's very driven by

technology. It's very regulatory

intensive. And then it's unclear, you

know, how will every jurisdiction, you

know, view every regulation. So, it'll

be a bit more complicated,

but, you know, we're talking about

extraordinarily exciting new ideas. You

know, an artist, a celebrity that could

own their own brand and, you know, and

you know, a membership that could be

tokenized, a ticket that can be

transferred,

>> right?

So, there are a lot of things that'll

happen and they'll be transformational

and innovative, but you know, they'll

require more legislation before before

you're going to find your favorite

celebrity do it. They're going to want

to make sure they're not getting sued by

the SEC.

>> Okay. And speaking of these new ideas, I

mean, why should the US government have

a Bitcoin reserve?

>> I think the the key to understand

Bitcoin is is it is like owning a piece

of cyerspace. It is the world reserve

capital Network. So, if you're looking

at a world that's going to have hundreds

of trillions of dollars of capital on

this network, and if we're looking at a

world where you're going to see

trillions and maybe tens or hundreds of

trillions of dollars of credit on top of

the capital in the network, right, you

might want to own a piece of it, right?

What I say is um the United States

purchased 79% of the land mass of the

country. 79% of the United States of

America was purchased for $40 million.

That's all of Louisiana territory.

That's all of Texas. It's all of

California. That's all of Alaska. We

purchased it before we knew there was

going to be Hollywood. Before we knew

there was going to be a Silicon Valley.

Before we knew that Navy would want oil,

right? We purchased Alaska 1867. It was

Seward's Folly. He was a fool for doing

it. It's got trillions of dollars of oil

underneath it right now. So if you can

actually purchase the future, if you can

own cyerspace, you ought to, right? Wh

what what you know the the Dutch I think

they purchased Manhattan for like a few

gilders and glass beads or something,

right? So uh it's very valuable real

estate uh you know in the same way that

you want to you want to control the

world's reserve currency network. I mean

the correlate is why should the US

actually sell 10 trillion dollars of

stable coins? Because money wants to

move at the speed of light and if we

sell the 10 trillion of stable coins and

if our companies run that network, we

will control currency for the next

hundred years. And so I think the United

States ought to dominate the world

reserve currency and it ought to

dominate the world reserve capital

network. We're the biggest holder of

gold,

>> you know. And if I said to you, would

you like to own the majority of the oil

in the world? John D. Rockefeller

thought yes. And we were the biggest uh

the biggest generator of energy, you

know, due to standard oil, you know, at

the turn of the century. And that's why

we won World War I and World War II

because we were the energy dominant

leader. Well, Bitcoin is digital energy,

right? Either you own it and control it

or somebody else does. And so I I would

just make one more point. If the US

doesn't, they should encourage US banks,

US investors, US corporations and

taxpayers to own it. Right? It it's not

necessary for the US to own it outright,

but it's very very critical that US

banks, US investors, US corporations own

it and control it in the same way that

it wasn't necessary for the US to own

all the oil, but it's pretty necessary

for a US corporation to own the oil.

>> What about the energy side of it? I

mean, so many Bitcoin mining companies

now pivoting to focus on AI data

centers. I've been talking to a number

of them. I mean, you've got Iron, you've

got CleanSpark, you've got Hive. What

are your thoughts on this?

>> I think that uh it's been an

extraordinary 180 degree turn for the

better by the nation. I think maybe the

most uh profound development of

technology in the 20th century was

nuclear power, nuclear energy, unlimited

clean, scalable energy. And we shut down

the programs for 50 years. And in 2020,

if you talk to energy companies, they

were going to decommission all those

nuclear reactors. And we were asking the

question, how do we get this nation to

embrace the importance of electricity?

and and if you want to generate infinite

clean electricity, you know, the the

most efficient way to do it is with

nuclear technology. So I I think there

there are two things you want to do with

energy. One thing is you want to create

digital intelligence,

right? And that's what AI is. And we we

discovered the way you create digital

intelligence is is you feed extreme

amount of energy. You feed gigawatts of

energy through very customized silicon

chips, Nvidia chips, you know, GPUs, and

then out comes digital intelligence.

Well, you know what the Bitcoin industry

discovered is the way you create digital

money, digital capital, is you take

gigawatts of electricity and you feed it

through custom silicon AS6 and you

generate a wall of encrypted energy to

defend the network and that's what

Bitcoin is. So the so what happened in

the last four years was was the Bitcoin

miners were under pressure for using too

much electricity by the environmentalist

and we were defending that. We were

saying but you know we're actually going

to create a new banking world order and

it's going to be worth hundreds of

trillions of dollars and so it's a good

use of electricity. But we had a hard

time winning that battle. Then all of a

sudden we have the chat GPT moment and

people discover that they also need

power in order to create digital

intelligence. And that turned Apple,

Amazon, Facebook, Google, right?

Microsoft

and hundreds of millions of Americans

into true believers. And that entire

debate about whether electricity good or

electricity bad just went away. And the

entire debate over nuclear power went

away. and uh all of those AI data

centers, they desperately needed high

power data centers. And you know who

owned them? The Bitcoin miners. And and

so as the Bitcoin miners were struggling

with the economics of the industry

because the way the Bitcoin works is it

gets exponentially more efficient to

mine Bitcoin. And so the margins in

Bitcoin mining are decreasing. At the

point they were struggling, along came a

new buyer for those power rights. and

they were able to pivot and monetize

those power rights. So, so AI and

digital intelligence saved, you know,

the Bitcoin miners and what are they?

They're digital power providers, right?

>> And ultimately the entire industry is

the market is starting to realize

the future is digital capital, digital

money, digital intelligence,

right? That that's the future. And the

way you create it is with silicon and

electricity.

>> And so if you want your nation to

dominate in the 21st century, you better