Michael Saylor | The Bitcoin Treasury Debate Gets Heated
What Bitcoin Did · 2026-01-12 · 2h 04m · View on YouTube →
I think 2026 is going to be a great year
for Bitcoin. If you want everybody on
Earth to use Bitcoin and every company
on earth to use Bitcoin, you had to cure
some fundamental problems. This entire
community has very short memory and
whatever happened in the past 5 days
dominates the conversation. We've got
the world's greatest financial
technology.
Is there opportunity for people, for
entrepreneurs or corporations to to do
good? Everything in history, it's a it's
continual neverending power struggle
over money, over power. Everybody on in
the world can buy Bitcoin as part of
their investment, but not everybody's
going to have as much as me.
>> Mr. Michael Sailor, thank you very much
for having us here in Miami.
>> Um, happy new year.
>> Same to you. 2026.
>> 2026. Hopefully, it's better than 2025.
>> Bitcoin's 17 years old.
>> 17 years old. It's pretty wild. And last
year was kind of disappointing for
Bitcoin. I think um it's definitely not
what I expected to happen in the year
and for treasury companies as well,
especially the back half of the year was
really rough.
Did you expect that going into 2025?
>> You know, I don't think it's a
disappointing year. The only way in
which it's disappointing is the price at
the very end of the year.
>> Mhm.
Do you know when the all-time high was?
>> Would have been about August.
>> October 6th.
>> October 6th. Okay.
>> Early October. First week of October.
You know how many days it's been since
the all-time high of Bitcoin?
>> I mean, must be like 100 days or
something.
>> Yeah. Grock thinks like 95 days.
>> Yeah.
>> Okay. So,
by the way, I you know, October o the
last quarter of the year is October,
November, December. Literally at the the
first week of the last quarter of the
year, Bitcoin hit an all-time high. So,
in what way is it a disappointing year?
It's it's this entire community has very
short memory and whatever happened in
the past five days dominates the
conversation. But if I look at 2025, I
think, well,
I think in 2024, we had like, you know,
30 to 60 companies that had Bitcoin on
their balance sheet, and by the end of
2025, we had like 200.
>> Mhm.
>> Okay. That So, the fundamentals look
pretty good to me. We hit an all-time
high. We added a hundred companies with
Bitcoin on the balance sheet. I think my
company raised something like$2 billion
dollars in Cal and it all went into
Bitcoin. So, we bought 25
billion dollars of Bitcoin in 2025.
Okay. This entire journey, Danny,
started in August of 2020.
>> Mhm.
>> With a $250
million
purchase. Okay. So, 10x times 250 is 2.5
billion. We bought a hundred times as
much Bitcoin in 2025 as we did in August
of 2020. And when we when we bought in
August of 2020, that was the greatest
amount of capital ever deployed in the
Bitcoin network that anybody could
remember in the history of the world. So
>> So 100x more than that strikes me as
being uh a pretty good fundamental
progression. You know, if I tick off
what happened in 2025,
we hit the all-time high. We had a 100
Bitcoin companies come online. fair
value accounting for Bitcoin, you know,
was instituted the beginning of the
year. You know, it's crippling to the
asset class. If you can only lose money,
you can never make money. So, if we're
going to actually institutionalize and
commercialize Bitcoin and and globalize
Bitcoin, if if you want everybody on
Earth to use Bitcoin and every company
on Earth to use Bitcoin, you had to cure
some fundamental problems. one uh when
we bought Bitcoin in 2020, our insurance
company dropped us. We got deinsured. A
lot of people got debanked. Mhm.
>> You know, we got in essence uh
when uh when the accounting system said
it's indefinite, intangible, we can't
make money, you got depitized,
you know, and um and when we rolled into
the first week of 2020, what happened?
We got our insurance back.
>> Mhm.
>> For four years, I had to underwrite the
insurance of the company. The company at
one point had 20, 30, 40 billion dollars
of assets. We couldn't buy a $40 million
insurance policy.
>> Wow.
>> Like strategy wouldn't exist if I had
not personally insured the company with
my own personal assets. We It wouldn't
have happened. So, we got our insurance
back in 2025. We got our profits back in
2025. We went to fair value accounting
and now it's possible for a company to
make money. We had the corporate
alternative minimum tax question hanging
over our head. Is there going to be an
unrealized capital gains tax on public
companies holding Bitcoin? That was
resolved with positive guidance from the
administration in 2025. So, we didn't
have an unrealized capital gains tax hit
us. Then, we got uh legitimized as as
the primary and the greatest global
digital commodity in the world by the
administration in 2025. that happened at
the White House summit and with a a
television interview that David Saxs
gave and then we hit an all-time high,
you know, and uh if I look at all those
things and and by the way, we at the
beginning of the year,
I couldn't get a nickel loan on a
billion dollars of Bitcoin collateral.
A nickel. I So, we were debanked. We
were de you know there was no credit and
by the end of the year the majority of
the major banks in the United States
were extending credit against IBIT and
like a quarter of them had announced
plans to start extending credit against
BTC. So I would say we we start 2026
and by JP Morgan and Morgan Stanley both
talking about buying, selling, handling
Bitcoin. M so now you've got bank
bankers moving with bank acceptance. You
got personal you got positive guidance
from the Treasury Department for crypto
assets on bank balance sheet. You got a
pro bitcoin pro crypto head of the CFTC
and Mike Sullig. You got a pro crypto
pro bitcoin head of the SEC and Paul
Atkins. You got a pro- crypto, pro-
Bitcoin president cabinet member. You
got universal utterance. You also had uh
the commercialization of the of the
Bitcoin derivatives market on the CME.
Yeah. Uh we had all of the handcuffs
taken off of IBIT stock options. You
also got in kind create and redemption
where you could swap a million dollars
of Bitcoin for a million of IBIT and and
vice versa. Swap a million of IBIT for a
million of Bitcoin without a taxable
event.
So if I had a checklist of all the
fundamentals necessary for the asset to
be commercialized and globalized and
institutionalized, you got everything
that you wanted in 2025. And you you
even got an all-time high. You just
didn't get an all-time high on the last
day of the year.
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>> Yes. And like fundamentally like
everything you're saying is obviously
incredibly bullish for Bitcoin.
>> By the way, didn't you take over what
Bitcoin did in 2014?
>> It was actually the end of 24, but yeah,
that might be the most big year for you,
too.
>> It was a big year.
>> Okay.
>> Um, but like even fundamentally, those
are very bullish things. I totally
agree. But the price is lower today than
it was this time last year. Um, and like
I I don't know if this is almost a
self-fulfilling prophecy over sort of
people thinking a four-year cycle is a
real thing and therefore there's selling
of Bitcoin. Um, I mean I think the
four-ear cycle is dead. What do you
think is going to happen in 2026?
>> Look, I I think that trying to guess
where the market goes over a 100 day
time frame is a fool's errand.
>> Mhm. Like I literally just said 95 days
ago we were at an all-time high and
you're complaining about Bitcoin price
action. Like what you know we have the
attention
you know of sixth graders. Not even
sixth graders.
>> It's not complaining. It's
>> one thing in your life you accomplished
in less than 100 days. Like you can't
>> Mhm.
>> You're supposed to have you can't have a
baby in less than 100 days. You can't
get a college degree in less than 100
days. How many companies were started
and declared successful in less than a
100 days? You know, was what Bitcoin did
made successful in 94 days? Right? I
mean, if you actually did a test on
every single human endeavor for the last
100,000 years, like, and you said,
"Well, I'm going to cancel them all if
they weren't successful on the 93rd
day." like first of all nothing and none
of us would be here right so uh I I
think it's a mistake to fixate on short
frequency events the whole message of
Bitcoin is you're supposed to have a low
time preference so I I think that if
you're an investor
if you're an investor if you're buying a
a a a company if you're investing in a
company expecting it to be successful in
less than four years just marks you as
naive.
>> Like name a venture capitalist that
would say that if the company that I
invested in isn't a screaming success in
less than four years that I'm just going
to sell my investment.
>> Yeah. Doesn't exist.
>> Yeah. It doesn't exist. So if you're an
investor, you need a four-year time
frame. But if but if you're uh a
progressive, if you're if you're an
ideologue, okay, so you got up and you
decided that you wanted to change the
world by spreading an ideology, you
probably need a 10-year time frame.
>> Mhm.
>> You know, so if we go back and ask,
well, how long did it take Gandhi to
like get where he wanted? I mean, look
at the history of every ideological
movement, you know, for the last 10,000
years. Normally, people that are deemed
to be committed to something have a
10-year time frame. And if you did
something for, by the way, the world's
full of people that spent 10 years
working on something and they still
weren't successful, it took them another
10 or 20 years. But um I think that if
you uh if your goal is to see Bitcoin
commercialized,
you really shouldn't be uh analyzing or
you shouldn't be assessing your success
with a frequency of 10 weeks or even 10
months.
>> So I I mean what does it matter what
happens in 2026 with the price, right?
It do you know uh take electricity.
You know how long it went it took to go
from 4% of factories running on
electricity to 75% no
>> of factories? 30 years. [snorts]
>> Okay. So if you're an electricity maxi
and you think that by the way
electricity is probably the single
greatest development of our lifetime.
Take away electricity all the cities
die. You know your Florida becomes
uninhabitable.
Hospitals don't work. Refrigeration
doesn't work. half the planet dies.
>> And so I give you the gift of clean,
invisible, efficient energy that that
revolutionizes the world. And it still
takes 30 years before 70% of the people
agree with you. Okay. So Bitcoin is
digital energy. It's digital capital.
It's the basis of digital credit. It's
the basis of digital money.
It's developing very rapidly. We're
making great inroads.
You know, you're like, "Well, the
four-year cycle is dead."
Well, the irony is the people that are
saying that haven't waited four years.
Did like we've only been 95 days since
the peak of the cycle.
>> Mhm.
>> Okay. So, how about I think that if you
actually assess Bitcoin's performance on
a rolling four-year uh moving average,
you see a a progression that looks
pretty bullish. I think I think 2026 is
going to be a great year for Bitcoin,
but I I think that you shouldn't be
roped into trying to forecast what is
the n the price in 90 days or the price
in 188 days. It's kind of like saying,
"Well, 6% of the factories in Detroit
have electricity. Well, what percentage
of the factories will have electricity
in 12 months?" Well, you're you're
wrong, and therefore electricity is
awful.
It's like, Jesus Christ, it took 30
years for people to embrace the most
obvious invention in the world.
>> Yeah.
>> And the And the same goes with radio,
the same goes with, [laughter]
you know, with with television. And the
same goes with, you know, I mean, I I I
think the greatest and most amazing
thing of our lifetime, Danny, is is
probably the most profound technology
invention of the 20th century was
nuclear power.
Like, here's a reactor. It generates a
gigawatt of energy and it does it
without any without any obvious
admissions. It's like unlimited clean
energy.
>> And that was a gift to humanity. And in
1973, we turned it all off. Like in
1973, the United States decided that
they were afraid of nuclear power,
>> which is totally insane. It's one of the
safest as well.
>> Well, we can't really trace a death in
the United States to nuclear power, but
we can trace hundreds of thousands of
deaths a year to coal or to fossil fuels
or to pollution. And the and the same
people that turned off nuclear power,
they embraced wood burning stoves and
coal and every type of fossil fuel. and
they embraced wars in the Middle East
and they embraced, you know, e every
alternative,
everything imaginable rather than turn
on unlimited free clean energy because a
successful marketing campaign convinced
them that it was scary and dangerous. We
literally saw millions, if not tens of
millions of people die in wars fighting
over alternatives to nuclear energy. And
we saw tens of millions of people die of
pollution from alternatives of nuclear
energy. And then the population of
Germany turns off all their, you know,
nuclear power plants.
>> I think the Simpsons scared everyone.
>> Yeah. And so I I think you have to
reason from first principles. And I I
guess my message is people all of a
sudden discovered that nuclear power
plants aren't a bad idea when they
needed unlimited electricity for AI.
>> Yeah.
>> And and all of a sudden it just flipped
after 50 years of skepticism. we flipped
to, oh, nuclear is cool again because
when Apple and Google and Meta and, you
know, Facebook and Amazon needed nuclear
and open AI needed nuclear, like, okay,
I guess we like it now. just it
literally was like overnight if you were
to trace that debate we went from 50
years of skepticism and cynicism to
massive enthusiasm
because people realized that they needed
electricity and they needed a lot of
electricity. Um, and so if if we can if
humanity can fight through 50 years of
nuclear skepticism to come out of that,
then I think that 94 days of Bitcoin
skepticism is not something that we
ought to be that skeptical about. I
mean, the bottom line is is after 10
years of not doing nuclear, right, the
nuclear power plant had a, you know, the
nuclear winter, right? The nuclear bare
market went from 1973 to 2023.
It's 50 years.
>> That was the bare market. And uh I I can
tell you from first uh firsthand
knowledge, I remember talking to a bunch
of power companies in 2021,
you know, just after the lockdowns
during the COVID crisis, you know, and
energy usage sagged. They were literally
all in the process of decommissioning
all the nuclear power plants they
operated. Half the nuclear power plants
of the US that people wanted to de
decommission them. They were going to
decommission the Diablo Canyon power
plant in California. They were all
bragging about it like, "Oh, we don't
need these things." And that was that
was literally four years ago.
>> That's crazy.
>> And then and then in like 2023, we had
the chat GPT moment. And then at some
point political sentiment flipped and
and and electricity became cool again
and power usage became remember how the
ESG movement
>> it disappeared very quickly
>> disappeared.
>> Yeah.
>> It was like you remember when when there
was the big ESG attack on Bitcoin like
Bitcoin can't use electricity or else
that's the end. And I think we all kind
of got saved by chat GPT because once we
realized that the hyperscalers went were
going to use 10 times as much energy as
the Bitcoin industry, it became a
rounding error.
>> Suddenly okay
>> and people decided maybe electricity was
cool again and and [clears throat] power
was cool again. So
I think you got to think for yourself
and you got to think from first
principles.
And first principles suggest that um
that unlimited clean energy, you know,
from a nuclear reactor is good idea when
the com when the alternative is burning
wood or burning whatever. And uh and I
think first principle suggests that
digital intelligence is good. All you
got to do is go and use these things and
they work,
>> right? And and and you're like, "Okay,
yeah, I want that." Like, everybody
wants that, right? If you use if you use
AI, everybody wants that. And then I
think, you know, do I want to be able to
move money at the speed of light and
store it forever in cyber space?
Of course I do. Of course I do. So, has
my conviction been swayed by 94 days of
not hitting an all-time high? No. I'm
I'm going to go on the record and say
that that I have an endurance of more
than 94 days.
>> Yeah.
>> And and it's kind of a joke, right?
Because there's no educated person that
didn't go to school for 16 years.
>> Mhm.
>> 94 days is not a lot.
>> 94 days is not a lot of time to carry
the flag. So, if I have to do it for
1,094 days,
you know, I could do that, too, right?
That would still be less time than it
took me to get through MIT and get an
undergraduate degree.
>> And by the way, after four years at MIT,
an undergraduate degree, you're not
still you're still not deemed to be
educated by polite society. Most most
sophisticated society, they would say,
"Well, you need a master's degree to be
a competent practitioner at the top of
your field." So their position is 12
years of secondary school, four years of
undergraduate, two years of graduate,
and now you're ready to be a productive
member of society.
So that's 18 years, Danny.
Bitcoin's 17 years old.
And you know, we just had our 17th
birthday on January 3rd. And so Bitcoin
after 17 years is a more than a two
trillion is a$ two trillion dollar
asset. and it's been embraced by
hundreds of publicly traded companies
and hundreds of millions of people
and it's been almost a hundred days
since our last all-time high. I I I
think I'm feeling pretty bullish and I'm
pretty happy about where we are. And uh
if you gave me a choice, if you said,
"Mike, um you can either have Bitcoin
150,000, but I'm going to roll back the
banking acceptance, the options
acceptance, the positive regulators at
the CFTC, the SEC, or Treasury, or I'm
going to roll back." In fact, if you if
you said, "I'll give you 150,000, but
you have to pick one of these things to
roll back. you have to give up the Camty
uh win or you have to give up the you
know the Fazby win or you have to give
up the support of the Treasury or you
have to give up the support of the SEC
or give up the support of the CFTC
if you or you have to give up the
support of the banking community for
IBIT or you have to give up the fact
that that city and Schwab are moving to
trade and custody Bitcoin. If I had to
give up just one of those things in
return for an all-time high, the answer
is I would give up the all-time high.
>> Mhm.
>> Right. It's like, and this is kind of
like adult like behavior. I would give
up immediate gratification for the next
90 days in order to get the support of
the multi-trillion dollar banking
industry or the most powerful regulator
in the world or yeah, or maybe the
ability to make money or or to be deemed
as profitable. So I I don't think
there's any question in my mind. Uh the
industry is evolving the right way. The
network is evolving the right way
and uh the last 90 days are just an
opportunity for you know someone that's
got clear eyes to buy more Bitcoin.
>> Yeah. And I'm also very bullish on
Bitcoin going into 2026. the the thing
that um I guess surprised me somewhat in
2025 was just how many treasury
companies turned up cuz when you first
announced that strategy you were buying
Bitcoin, I thought we were going to have
a lot of people copying you much much
earlier, but really it wasn't until last
year that we saw the sort of the
floodgates open and a lot of companies
come in. Um I've been very skeptical of
a lot of the treasury companies. I I
think Strategy and a few of the other
larger ones are kind Well, Strategy is
in a league of its own. You've got over
650,000 Bitcoin. Um, I think the
preferred are really interesting. Again,
kind of set you aside. What do you think
of all the companies that are still
doing the very simple like sell equity,
buy Bitcoin playbook?
>> Well, I guess what I would say is
everybody on in the world can buy
Bitcoin as part of their investment, but
not everybody's going to have as much as
me.
>> But they, you know, they could all buy
it. I'm not skeptical of any of them
they buy it. Every family can buy
Bitcoin. Some families will have more
Bitcoin than other families.
>> I'm not skeptical of a family's
decision. Every company can buy Bitcoin.
Some companies will have more Bitcoin
than others. It's a good idea for all of
them to buy it, right?
>> Whether they're sort of cash flow
positive businesses or not.
Um,
if a company is not cash flow positive,
then it's just not a good company,
right?
>> But we see a lot of these companies crop
up that really don't have a business.
All they're doing is trying to issue
debt and buy Bitcoin.
>> Okay. Well, aren't there plenty of
people like individuals that don't have
a business and they buy Bitcoin, too?
>> Mhm.
>> Are you going to criticize them?
>> No. I just don't know why. Like if
you're not as rich as Bill Gates and you
buy Bitcoin, should I criticize you?
>> No, of course not. But the the problem I
have, I guess, is why would anyone buy
shares in that company as opposed to one
like strategy?
>> Well, every company is a different has a
different value proposition. And and the
answer, by the way, Danny, like
the whole point, the the message I've
delivered every day for the past five
years is buy Bitcoin because there's a
lot of counterparty risk when you invest
in a company.
>> Mh.
>> Like why do you buy Nvidia? Why do you
buy Apple? Why do you buy, you know,
Coca-Cola? Why do you buy Disney? Why do
you buy a airline?
>> Right? There's the old old story, how do
you become a millionaire? Start with a
billion and invest in an airline. Okay?
The the world's full of companies that
are bad investments,
>> right? The world's full of them. There's
400 million companies. So the question
for you is why haven't you invested in
any of the 400 million? It's like
>> because I buy Bitcoin.
>> Okay. Um so criticizing a criticizing a
company that buys Bitcoin misses the
point. Well, why don't you criticize all
the companies that don't buy Bitcoin?
Are they are they even worse? The answer
is there are some companies that have
very good businesses and they're cash
flow positive and there are some
companies that have very awful
businesses and they're cash flow
negative.
Okay. If you take a good business and
you buy Bitcoin, it's a better business.
>> Mhm.
>> If you take a bad business, a business
is losing money and you buy Bitcoin, you
might very well offset the operating
business operating results, right? If if
you had if you're losing 10 million a
year in the operating business and you
hold $100 million of Bitcoin on the
balance sheet and you're making $30
million in capital gains on the balance
sheet, then actually
now the question is you're going to
criticize that business for what?
Like I I give you a business that's
losing 10 million a year and it's got a
hundred million in cash and its choice
is to buy Bitcoin and probably make 30
million in unrealized gains or Bitcoin
gains
or to give away the money, right? Buy
back its stock. I mean, what would you
do? Yeah.
>> Right. Take the $100 million and buy
back your stock. If you had a money
losing business, would you buy back your
stock?
>> I'd buy Bitcoin. By by the way, when you
buy back the stock of a money losing
business, aren't you just amplifying
your losses three times as fast, right?
Like if I if if I had $100 million in
cash and I bought the stock of a money
losing business, I would just be going
out of business faster, right?
>> That's not smart.
>> Mhm.
>> If I had a hundred million and I bought
Treasury bills yielding 3%.
>> Then okay, well, so I'm making three
million a year, but I'm losing 10
million a year. So, I'm just going out
of business like one-third slower,
right? If I took the 100 million and I
bought Bitcoin with it and Bitcoin goes
up 30% a year for the next 20 years to
create to create a simple model,
I'm generating $30 million of Bitcoin
gains. I got $10 million of losses. Now,
I'm making 20 million a year.
Didn't I just save the company?
>> Mhm.
>> So, why are you criticizing that
company? I mean, the criticism is not
that they bought Bitcoin. The criticism
is that they're losing money. Okay.
Well, I give you a choice. You can
invest in a company that's losing 10
million a year with no Bitcoin or you
can invest in a company that's making
that's losing 10 million a year and
making 30 million a year off the Bitcoin
and making 20 million a year. Which of
the two would you invest in?
>> But I I guess the question more is
though, do you think the market can
sustain this many treasury companies?
Because we see, especially the smaller
ones, almost all of them are now trading
at like a significant discount to their
>> I think you're just missing the point.
You're like, like the Bitcoin community
tends to eat its young. Like they would
rather criticize a company that buys
Bitcoin than criticize a company that
doesn't buy Bitcoin.
>> Mhm.
>> Why don't you focus upon criticizing the
money losing companies that don't own
Bitcoin? Why would you buy them?
>> Why you Why aren't you criticizing them?
>> No, I agree with that. And but it's not
that I'm criticizing them. It's just
that the the shareholders in some of
these other treasury companies are
getting absolutely crushed and and like
is there any way that some of these
companies ever get back to like a
1xmnav?
>> Yeah. I think yeah I just don't I I just
don't accept the criticism you made an
investment in a company. Why did you
invest in the company? Right.
My problem with the premise is you
somehow think that it's okay for 400
million companies to not buy Bitcoin and
you like that and you're going to
criticize the companies that the 200
companies that bought Bitcoin and that's
the thing that's your brilliance.
>> The thing that I would
>> How is it brilliant for you to ignore
the fact that 400 million companies
didn't buy Bitcoin and somehow that's
okay and you're going to criticize the
200 companies that bought Bitcoin?
>> That's not the criticism I'm making. um
the the cuz like if if
>> you're just criticizing someone that
that bought an equity at the wrong
price, why don't you actually put the
focus upon the people that make the
investment decision? The companies don't
determine the price their stock trades
at.
>> Mhm.
>> So, so my point my point here is what is
your brilliant insight, Danny, that
people shouldn't buy Bitcoin? Is that
what you're trying to say?
>> No, I think people buying Bitcoin is
cool.
>> Okay. Well, well, if it's okay for bit
Well, what about an unemployed person?
You want to criticize them for buying
Bitcoin?
>> Of course not.
>> Well, what if you have debt? You want to
criticize the person with debt for
buying Bitcoin?
>> Well, then why are you criticizing a
company for buying Bitcoin? I
>> I mean, I'm not criticizing.
>> If it's a good company that buys Bitcoin
is better. And if it's a bad company
that buys Bitcoin is better than it
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No, I'm not criticizing any company here
at all. I I'm just saying I'm skeptical
of whether the market can sustain like
200 plus treasury companies because what
I don't understand
>> why would you that's kind of like saying
I'm skeptical that the market can
sustain 200 people to buy Bitcoin.
>> No, cuz it's not it's not
>> what's the difference?
>> It's this like it's the idea of just
issuing debt to buy Bitcoin rather than
being like a cash flow positive
business.
>> That's just a ignorant offensive
statement on your part.
>> Please tell me why. Like who like like
who are you to say they're just issuing
debt to buy Bitcoin? Right. You said
that.
>> Mhm.
>> Like there's 400 million companies in
the world.
You're going to take the position that
only 10 can buy Bitcoin. Why can't all
400 million companies buy Bitcoin?
>> Of course they can.
>> Well, don't they do things?
>> Yeah.
>> Okay. So,
>> but it's the companies that don't do
anything that I that I am. Again, I'm
not criticizing anyone.
>> Okay. But the point but but you're not
criticizing a company that buys Bitcoin.
You're criticizing a company that
doesn't do anything.
>> Yeah.
>> Okay. Well, there's 400 million
companies. How many of the 400 million
don't do anything? Why don't you just
focus on that?
We can agree that you shouldn't invest
in companies that don't do anything that
make a rational decision, but can we
just leave it at that?
Like I mean I just think it's kind of a
it's a it's a silly notion that you want
to criticize a company that makes a
rational decision.
Well, what do you want to want them to
buy instead of Bitcoin, right? What are
you promoting instead of Bitcoin, right?
>> No, it's maybe
>> you have 200 companies that have decided
to buy Bitcoin. It's like that's like
criticizing the 200 companies that
adopted electricity. You're like, well,
there's one of them is better than the
other.
>> Mhm. Okay, that makes electricity bad.
How is it irrational
for a [clears throat] company to adopt a
new technology which is better than the
previous technology?
>> No, that's not irrational at all. What I
what I worry about is the companies that
may be seeing this as like a cash grab
rather than actually trying to build
anything interesting.
>> Okay, but we're not here to promote bad
companies, are we? Mhm.
>> That's kind of like, okay, well, I
invented electricity and some dude that
sells,
I don't know, like cardboard, cotton,
candy placards for a billion dollars
announces he's going to buy electricity.
I mean, my point is like, should you
invest in the cardboard, cotton, candy
company that sells cotton candy
cardboard boxes for a billion dollars?
Of course not.
But but my my problem with your framing
is you're saying I don't know if the
market has room for more than a couple
of companies to buy Bitcoin. Look, the
market has room for every company on
Earth to buy Bitcoin,
right? The market and by the way, if
there's a there's a a simple way to
think about this. If you if you've got a
successful business or a healthy
business and you're generating cash and
you buy Bitcoin, won't you be better?
Mhm.
>> Okay. If you have a business which is
which sometimes makes money, it's a
struggling business and some some years
it makes money, some years it doesn't
make money, but you have a lot of cash.
Wouldn't you be better to invest the
cash in Bitcoin than give it away?
>> Yes. Absolutely.
>> Wouldn't you be better to invest the
cash in Bitcoin than buy treasuries?
>> Mhm.
>> Okay. So, good companies benefit from
buying Bitcoin and then struggling
companies benefit from buying Bitcoin.
Now, if you have a company which makes
no money, that's never going to make any
money
that has a hundred million in cash,
your choice is give the money away.
You've got no company. Invest the money
in Bitcoin, you've got a company that
generates no cash in his operating
business, but makes 30 million a year,
growing at 30% a year. I give you a a a
digital company that is generating 30
million a year, growing 30% a year. Was
that a good decision by the company?
>> Yep.
>> Okay. And so now your issue is now I
have a company which is losing 10
million a year forever and I can make 30
million in Bitcoin growing 30% a year.
That means I start with you know $20
million but it's but the business is
growing. it. Statistically, by the way,
if you start with 100 million in Bitcoin
and you bolt on $10 million of losses
forever,
then the business converges on the same
result as a business that doesn't lose
anything forever because eventually
you're making a billion dollars a year
and you're generating 10 million in
losses. And so, you still got a business
making a billion a year. Is that a good
idea?
>> Mhm.
>> Okay. So, what's your problem? like
[snorts]
like your problem is I I think part of
the issue is people in the Bitcoin
community can't imagine buying equity or
or they're like well that's not as good
as buying Bitcoin. Well, that's not
actually true. It is as good as buying
it's actually better because
corporations have all sorts of tax
advantages and all sorts of operational
advantages. Take the business which is
losing 10 million a year. uh that
business can generate a billion dollars
of capital and turn around and go raise
money at 5% risk-f free 10 years out and
buy Bitcoin with it, lever it up, and
they'll probably outperform Bitcoin.
>> What's wrong with that?
>> Nothing's wrong with that. I mean, I I
the only I don't know if it's better
than buying Bitcoin in the sense that
you don't get to actually hold the
Bitcoin. Um it may outperform it,
>> but the point the point is you want to
buy Bitcoin, buy Bitcoin.
>> Yeah.
>> But what but what's with all the hate?
It's like it's just so dysfunctional.
like all all of the toxicity in the
community there's 400 million businesses
like don't you don't you have a business
Danny
>> I do okay
>> with Bitcoin on the balance sheet
>> okay so you want me to sit and do
podcasts talking about how you shouldn't
buy Bitcoin and you'll never be as good
as some other Bitcoin treasury company
and like heaping scorn on you and then
criticizing all your if you go if you
find some venture capitalist that wants
to give you $10 million and invest in
what Bitcoin did should I then send
emails and nasty grants of them calling
them stupid and criticizing them because
they want to invest in you and like it's
like the point is you have a business,
you have to make a living. Your business
is better with Bitcoin. But what about
the venture capitalist? I mean like like
the subtext of all this is sort of like
some toxicity and hatred and ignorance
of people that invest in businesses for
a living. Like the v the the venture
capitalist literally has a job where he
has to invest capital. Mhm.
>> in your business.
>> He has to.
>> Mhm.
>> He's not allowed to buy Bitcoin.
>> Okay. So, well, you're not going to be
the biggest Bitcoin treasury company,
Danny. But the point is the VC needs to
invest in someone. He wants to invest in
a podcaster. You can choose to take the
money and buy Bitcoin with it or you
cannot buy Bitcoin with it. I'm not
sitting hating on you and I'm not hating
on him and I'm not like I'm not
gleefully, you know, disparaging people
that buy equities. The point is that
guy's in the business of buying private
equity. You're in the business of
creating private equity. There are other
people in the business of buying public
equity. There are literally tens of
trillions of dollars of capital locked
up in the market and they can't buy
Bitcoin. They can't invest in a private
company.
>> They have to invest in a public company.
And the issue is,
should a public company buy Bitcoin so
they can invest in it?
Of course they should,
>> right? That some of them need to buy
Japanese companies. Some of them need to
buy Brazilian companies. I have capital.
I have to invest in Brazilian companies.
So you're a Brazilian company. You buy
Bitcoin with it. You're never going to
be the biggest Bitcoin holder in the
United States. But what does that
matter? Mhm. So
>> what what happens if you're the 14th
company in Brazil that buys Bitcoin?
>> Well, what I mean the the whole point
here, the part that people are missing
is,
and this is my issue with the Bitcoin
community in general, they would rather
eat their young and they would and they
would rather criticize other people that
buy Bitcoin or support Bitcoin in a
different way than them.
like you're not a self-custody maxi or
you don't, you know, you don't do it the
way I should do it. You should put it on
like two titanium 16 titanium plates and
bury it under the dirt and and eight
continents in order to be a true
Bitcoiner. They've got all these
criticisms,
but 99% of the world
doesn't even know they exist and won't
give them a nickel and hates them or or
constructively 99% of the world is your
enemy and they don't criticize the 99%
of the world that's their enemy. They
focus on the 1% of the world that agrees
with them on 99% of substantive values.
And so like we spend so much time being
critical of other Bitcoiners
and other Bitcoin companies and the
truth of the matter is the guy that
likes Bitcoin is 99% aligned with you
and 1% different. Okay. So So I live in
the UK or or you live in Germany and you
speak German and you speak English with
an accent. So, I'm going to hate on you
because you have an accent. When you
agree with when you say something in
English agreeing with me with an accent,
I'm going to spend all my time
critiquing your accent. And I feel like
a lot of the debate in the community is
that
and it's just such a waste of time. It's
so nonconstructive,
right? That I mean, the answer is
there's 400 million companies.
Some of them are good companies, some of
them are bad. it. If you've got a
monopoly, good for you. By the way, you
don't even need to buy Bitcoin. You have
a monopoly, right? They're going to be
the last ones to buy Bitcoin. If you've
got a competitive business, you're
struggling,
>> you buy Bitcoin, then maybe it's the
difference between success and failure
of your business.
If you have a business which is a which
is a weak business, okay, so whatever.
You sell beverages in Australia and
you're not Coca-Cola. [snorts] Well,
that doesn't mean you're an evil person.
That doesn't mean you don't deserve to
exist. Maybe Bitcoin is your lifeline.
>> Mhm.
>> Like, like what if your family
collectively spends more money than they
make and you have no chance or no hope
of making more than you need to spend
and I give you the chance to invest in
Bitcoin and that's the difference
between your family going bankrupt and
being destitute or not. It's like I got
some podcaster that's going to criticize
my family because we're not Apple
computer. It's like it it's just so
offensive that you would criticize
someone struggling to make a living by
doing but by by doing some by by in
essence investing in the same thing you
invest in.
>> Are you saying I'm criticizing these
people?
>> I'm just saying anyone that's
criticizing a Bitcoin company is is like
piling on to a person that agrees with
them with on on 99% of the fundamentals.
And what you ought to do is applaud
their decision,
right? They basically decided that
freedom and sovereignty and you know and
economic integrity and Bitcoin was
apex property and that's a good thing
and they've joined the movement.
So maybe we ought to thank them or at
least support them. the fact that their
stock got overvalued by a factor of
three or it, you know, so the stock
trades up by a factor of 10 and you
bought it and then it trades down and
now your answer is instead of
criticizing yourself,
you're criticizing them,
right? You're you're a stock speculator.
If you're an equity speculator and you
buy stocks that are trading at 57 times
revenue and then it trades down, the
fault is not with the company. The fault
is with you. Mhm. I mean, I totally
agree. That's responsibility.
>> And so instead of criticizing companies
that do rational things, look in the
mirror, hold yourself accountable. The
problem is not companies buying Bitcoin,
>> right? How many how much room is there?
There's room for every company on earth
to buy Bitcoin, Danny.
>> So, okay, I think maybe maybe I frame
that badly because I'm not criticizing
these companies. It's more I'm asking
what the market will sustain as of right
now for these pure play treasury
companies especially with the fact that
like in
>> it's an offensive question like here's
the problem with it.
>> You're the one that's characterizing
them as pure play treasury companies.
They're not.
But that's that it's the insult Danny is
you insult me by characterizing what I
am and what I will be for the all of
eternity. No, no, I'm not talking about
the point is I'm like this literally
insulted that you take that position.
It's an offensive position to take.
>> Well, I I apologize. I'm really not
trying
>> operating companies.
>> Okay. But what So
>> So the point is there's 400 million
companies. They do a lot of different
things.
>> Right. And so you you're taking the
position that all that they do nothing
but buy Bitcoin and sell equity to buy
the Bitcoin by by characterizing them as
a pure play.
>> Okay. Again, so that wasn't my
intention. I'm really not trying to
>> Let me say it a different way. How many
companies are there on Earth, Danny?
>> 400 million.
>> Okay. Well, so how much room is there
for companies on Earth?
>> Well, then why are you then why are you
concerned about the fact there's 200?
>> No. No. The the the question I'm trying
to get to though is like with in25 like
you launching the preferred which I
think are a really interesting product.
Does that change the the playbook for
all these other companies and how do
they now compete against you now you
have the preferred as well?
>> I I again I take issue with your
question. It's an ignorant insulting
myopic question. Why do you why do you
frame things that way? We're not
competing with each other. That's like
saying, "Well, you know, like I heard my
neighbor bought Bitcoin and I bought
Bitcoin. There's not enough room for
both of us to buy Bitcoin. We're
competing with each other now. What's my
what's my my neighbor's got to buy
another crypto asset?"
Like, we're not competing with each
other, Danny.
Like, that that's that's the ignorant
part of the question, right? That's what
I take issue with. What you have if
you're a hotel company in Japan
>> Mhm.
>> you're competing with other hotel
companies in Japan and the decision to
buy Bitcoin is just a decision to
improve the quality of your company.
It's like saying how many companies can
have electricity?
I heard 200 companies have electricity
but there's one company that uses a lot
of it. So do the other companies have to
change their strategy,
dude? like what you think they had the
same strategy.
It's a it's a it's a silly question and
and it's a it's a myopic ignorant toxic
framing of a question and the result is
you c you know you come to some ignorant
conclusion.
>> Okay.
>> There's room for 400 million companies
to buy Bitcoin, Danny.
>> Do insurance companies compete with my
company? I don't sell insurance.
No. Do banks compete with my company? I
don't sell bank. I I'm not a bank. I
don't buy consumer credit. Do I issue
credit cards? No. Do exchanges compete
with my company? No. We're not an
exchange. Do companies that create AI
compete with my company? No.
None of these people compete with my
There's a million. We literally just
said there's 400 million companies.
Why do you think that there's only one
possible business strategy for a company
that holds Bitcoin in his balance sheet?
That's like saying there's only one
thing you can do with electricity. Okay,
what's the one thing?
There's no there's more than one thing
you can do. That's like, oh, well, we
speak English. Well, there's only one
thing you could do if you speak English.
We use dollars.
>> Bitcoin is just a digital capital asset.
You can literally do millions of things
with digital capital,
>> which is why I take offense every time
you, you know, you try to characterize
us as competing with each other. You're
creating this doggy dog world where
everybody competes. We're not competing
with each other. Companies that adopted
electricity, you know, decided they
didn't want to rely on donkey carts.
And you're sitting here criticizing
companies that adopted electricity
instead of use donkeys. And you know,
and it's like, I just think it's
offensive and it's myopic and we ought
to be constructive. Why don't you
applaud them for not using donkey carts
and using electricity? And then why
don't you think, well, maybe there's
more than one thing I can do with
electricity. Maybe there'll be a world
of Hollywood movies, and maybe we'll
create elevators, and maybe we'll create
electric cars, and maybe we'll create
haird dryers, and maybe we'll create air
conditioners with electricity. You can't
imagine anything you could do with
digital capital.
>> Of course,
>> insurance, credit, banking, exchanges,
derivatives, money, money funds. How
about everything on earth that's ever
been done would be done better with
credit?
>> Mhm. I mean, I I'm really not trying to
criticize these companies. I'm just
trying to get your perspective on it.
I'm sorry if that was an offensive
question. you're getting my perspective
on it, which is which is you're wasting
your time criticizing companies that
decided they like Bitcoin.
>> Mhm. Okay.
>> Why don't you if you want to criticize
companies, Danny, why don't you
criticize the 99.9%
of the companies that don't like
Bitcoin?
>> Fair.
>> I mean, like, isn't that what you should
be doing? That's that's my point. It's
like this this toxicity of of eating its
own young. Like why don't you actually
support the people that agree with you
on 99% of your ideology instead of
criticizing them?
>> Fair,
>> right? They're actually trying to
they're trying to do the right thing for
their shareholders, their families,
>> right? Their countries, right? They're
doing good things,
right? There there's there's people in
Brazil that need to buy equity. They
need someone like Orange BTC.
>> There's people in Japan, they need
MetaPlanet. There's people in the UK,
they need Smarter Web. There's people in
France, right? They need Capital B,
right? That those those companies are
are planting the flag for Bitcoin and
they're and they're carrying digital
capital into the equity capital markets
everywhere in the world. And they're all
doing it to different degrees.
And they're struggling. It's a very
competitive market.
Like out of the 400 million companies,
like how many of them have an easy time
of it, Danny?
>> Oh, very
>> 10.
>> Yeah.
>> Okay.
>> Mhm.
>> So, so there's like 10 mega corps of an
easy time. Everybody else is struggling.
There's 8 billion people struggling.
There's 400 million companies that are
struggling.
Like, what what's my advice for them?
buy Bitcoin. Bitcoin's the strategy. My
my issue with your question is your
advice is don't bother because you're
not going to be as big as strategy and
let's talk about all their problems. And
my point is it's so non constructive and
so soul soul sucking. Right.
Right. For for us to spend time on
negativity,
they have they have to get up and go to
work just like you do. Mhm.
>> And so my suggestion for your company is
focus on Bitcoin and if you have
capital, buy Bitcoin with it and don't
obsess over the fact that maybe you
don't have as much as another company or
you can't do what another company could
do. Ask yourself what you can do.
>> Mhm.
>> Because I got a hundred ideas for you.
Right? They're all good constructive
ideas. Right? People either look at the
world with a positive lens. I'm going to
embrace new technology and become the
best version of myself I can be. Or they
embrace negative ideas. Oh yeah, someone
else got there before me and I guess I
can't. And so I just I I don't think we
should be spending time on negativity.
>> Okay, let's move on from that then
because I I truly wasn't trying to be
offensive with that. Um with all of the
companies that are now trading below 1xm
nav, um obviously strategy went through
a period of that in 2022. Um, do you
think they will easily be able to grow
into positive MNAVs again or is is there
like a constant gravity to one that you
have to kind of fight?
>> No, I think that's just a myopic
narrative,
right? That companies exist to create
value and so the company is going to be
valued based upon their operation. What
do they do?
>> Mhm.
>> Right? If I have a company in Japan and
I can sell credit instruments that yield
6% and the rest of the credit markets
pay 2%. Then what's the company worth?
Isn't it most Isn't that the most
valuable company in Japan?
>> Absolutely.
>> Does anything else matter? Isn't Isn't
the question whether or not you can sell
credit to pay 6%.
>> Mhm.
Take the same company in the UK. If the
credit markets are are paying you four
and you're the company in the UK that
offers eight, what's the company worth?
It's worth a lot.
>> Now, I'm just giving you one strategy,
but okay. Well, what about life
insurance? What if I what if I create a
Bitcoin backed life insurance company in
the UK and I offer life insurance
policies to pay you double every other
life insurance company in the UK? What's
that worth? How big is the insurance
business in the UK?
>> Reasonably big, right?
>> A big bank that I that I do business
with put out a a preferred stock report
and and they published all the
preferreds and the and the average
preferred stock in the United States and
in our capital market pays 6%.
And is illquid.
You know, if you're Strive and you have
a preferred stock that pays 12% and it's
liquid, what's that worth?
>> A lot.
>> So, why are we fixated upon [laughter]
like one MNAB? Like the issue is not one
MNAB. The issue is is what's the company
going to do? Are you going to create the
world's greatest insurance,
right? Like the average insurance
company's investing your in your
insurance proceeds at 5% or 6%. Well,
what if we invested them at 30%.
the I what if I offered you auto
insurance and the auto insurance only
cost you one half? What if the pre my
premiums were half of the normal auto
insurance? What would be the auto
insurance company be worth? A lot,
right?
>> So my point really is the companies will
be worth whatever they're worth,
whatever they do. What are they going to
do is the question,
right? We we we have chosen to create
digital credit.
You know how much room is there to
create digital credit? Well, Danny, you
know how many companies issue preferred
credit?
>> No idea.
>> Thousands.
Thousands.
>> Mhm.
>> You know how many companies issue
corporate credit?
>> More.
>> Hundreds of thousands.
>> Millions.
>> You think we're going to saturate the
market?
>> Absolutely not. I don't I think I think
the prefers are really interesting.
>> Yeah. So, but but but digital credit is
just like it's one little thing. How
about digital insurance,
right? There's a lot of other things to
be done. Digital banking, digital
derivatives,
right? Digital exchanges.
If you create a derivatives business
backed by Bitcoin, you can in theory be
much better than conventional
derivatives. If you if you created an
exchange backed by Bitcoin, you could be
better than normal exchanges, you can
create an insurance company. How many
insurance companies on Earth use Bitcoin
as the backing collateral or the or the
capital?
>> Zero.
>> None. How big is the industry?
>> Ginormous.
Okay. So,
so let's not wax philosophical about the
fact there's too many companies that are
experimenting with Bitcoin. And there's
an important legal point to make, right?
You're an operating company.
Your equity is valued not just on what
you're currently doing with your
capital. Your equity is valued based
upon what you might potentially do. The
fact that I haven't done it doesn't mean
that I couldn't do it. And and this goes
to this debate about these these
companies, these digital asset
companies. Are they investment
companies? Are they operating companies?
An investment company by law, Danny,
cannot do anything with their capital
other than hold it and trust. So if you
have $10 billion of capital and you're
an investment company, like your IBID or
your FBTC, you you literally can do
nothing but hold it and wait.
>> An operating company can underwrite auto
insurance with it. They can do re they
can sell reinsurance. They can sell
flood or fire insurance with it. They
can b they can loan it out and
rehypothecate it and generate yield on
it. They can write digital credit
against it. They can issue corporate
bonds against it. They can issue junk
bonds. They should issue convertible
bonds. They could actually do real
estate development with it. You could do
you could do anything conceivable. You
could create a derivatives market. You
can you can create uh all sorts of
derivative instruments, exchanges,
options, contracts, everything
imaginable with it. Okay? The things
that they could do would be illegal. You
would literally end up in jail or you
would end up bankrupt if you tried to do
it as a trust company, as an investment
company. But as an operating company,
you can do it. So, you know, some
armchair critic on Twitter wants to
stare at a company that's got 500
million or a billion of Bitcoin saying,
"Well, they're trading at a discount to
NAV or they traded a whatever NAV and
they think they know the future." You
don't know the future, right? The the
point is
if I had a billion dollars of Bitcoin in
an operating company and the stock was
valued at a billion, is that the same as
a billion dollars of Bitcoin in an ETF?
No. Why? Because the operating company
has a billion dollars of capital and
unlimited infinite optionality forever.
Mhm.
>> And the trust company has zero
optionality,
right? The trust company. And so here's
the big idea. When for an equity
investor, the [clears throat] management
team of the operating company can take
decisions that will either increase the
billion dollars by a factor of 100 or
take decisions to lose it all,
>> to take it to zero.
They're both legal, Danny. They're both
ethical,
right? One could say that if the if the
operating management team does does
stupid things, they, you know, they
rehypothecate the Bitcoin and it's lost
that it goes to zero, they've destroyed
shareholder value. But the management
team might also do intelligent things
that create shareholder value.
The stock is going to trade based upon
the sentiment in the market about
whether or not the investors or the
marketplace thinks that the management
team is going to create shareholder
value and dilute shareholder value. And
over the course of a decade,
right, the market's a weighing machine
and if they did the right thing, the
stock is going to be more valuable. Do
you know how long the conventional
wisdom was that Amazon was a stupid
company doing stupid things that would
never work?
>> I don't know, a decade. A decade
>> a dec a decade after it was obvious that
Amazon was a good idea. The conventional
wisdom was they were stupid company
doing stupid things destroying
shareholder value. You can literally
watch the Amazon stock and you could see
the consensus go pull the logs.
>> So the market might may take a skeptical
view. The market's view of Apple was
skeptical for five years, 10 years. Like
it traded a PTE of eight or 10 or
whatever. It's like a device company.
>> Mhm.
>> And then it flipped.
So
the market might have a sentiment that
these companies are are you know poorly
run investment trusts but at the end of
the day the destiny the fate of the
company is going to be determined by the
management team's actions
and they can [clears throat] choose to
enter certain industries
and they can choose to enter certain
markets.
My company is a US a US company. Like we
we haven't chosen to enter the banking
industry. We we haven't applied for a
banking license. We haven't we haven't
entered the insurance industry. We
haven't entered into the into the market
to issue securities in the UK or Japan
or Brazil. Right?
>> We choose not to,
right? We don't need to. We won't. But
that doesn't mean that aren't that those
aren't massive opportunities for other
companies. So, so the answer is how many
opportunities are there? Well, the the
real question is if there's 400 million
companies that are currently in the
market today, well, how many digital
companies will there be based upon
digital capital that could be
successful? I don't know why there can't
be 10,000 successful ones,
right? And they're all different. Y
>> I could literally reel off 20 different
categories of digital company in the US
capital markets of which we're not going
to be more than one.
>> Mhm.
>> Right. And so I I think that
I think we ought to put on our our
cheerful, constructive, optimistic hat
here and say, "Okay, we've got the
world's greatest financial technology.
Is there opportunity for people for
entrepreneurs or corporations to to do
good?" Yeah. There ought to be 10,000
private startups that are using Bitcoin
and there ought to be thousands of
public companies using Bitcoin. And the
fact that you bought the stock, you
know, at the all-time high and it traded
down is the same, you know, it's the
same disappointment of the people that
that forgot that Bitcoin traded an
all-time high 95 days ago. It's like
Jesus.
It's like, you know, you call yourself
an investor. If you haven't struggled
for four years, you're not you're not
even, you know, a casual investor.
You're just a speculator or a trader,
right?
>> You know, and and if you're really
building, if you're a business person,
if you're an industrialist,
you ought to sign up for a decade, 10
years. And you know, and and if you've
been doing something for 10 years and
you haven't succeeded after 10 years,
it's reasonable to say, "Maybe I don't
have it."
>> Mh.
>> Or maybe this was not the right idea.
But for these companies, you ought to
give them a 10-year a 10-year runway.
And so instead of saying, "Well, I
notice right now that all they've done
is like issue some equity or issue some
debt instruments to buy Bitcoin." That
doesn't mean that they won't become the
greatest insurance company in the UK or
the greatest bank or the greatest credit
issuer.
>> Yeah, that's that's totally fair. Um,
you said a little earlier that you would
never be interested or you likely
wouldn't be interested in becoming a
bank. Like that is something that a lot
of people have speculated about
strategy.
>> We wouldn't
>> you wouldn't do that. Why? Why not?
>> Yeah. Be because we have a business
which in theory is almost infinitely
scalable. Mhm.
>> If you look at the existing business, we
we have a product STRC stretch digital
credit. Okay. What's the perfect
product? A product that pays you a 10%
dividend with a V of one or two that's
publicly traded. What's the market size
for that?
10 trillion,
right? There's a hundred trillion dollar
easy, you know, addressable market for
that. If we were 10% of that treasury
credit market, it would be $10 trillion.
So I have a product which is got a total
addressable market of $10 trillion.
Okay. Um who wants it? Everybody wants
it.
>> Yeah.
>> Who who wants a bank account that pays?
By the way, what if it got to zero ball?
We actually think that our business idea
is simple. Bitcoin is digital capital.
Stretch is digital credit.
If you create something on top of it
that gets it that strips it to zero of
all its digital money, a bank account
that pays you 8%. You know, people are
trying that right now. There's a number
of people that are trying to create
digital money.
>> Is that essentially like a Bitcoin back
stable coin at that point?
>> Yeah.
>> Mhm.
>> Yeah. So, I create a stable coin. Let's
say I I strip the ball to zero and it's
just you put in $19,00022
and you get out $19,00022
and while you're waiting you collect 8%.
>> Mhm.
>> Okay. A bank account that pays 8%.
What's every other bank account pay?
3.5% right now in the US dollars 50
basis points and yen 100 basis points in
euros or 150 at best.
>> Okay. So, a bank account that pays 8%
backed by digital credit. How do you
credit? You you blend in a mixture of
credit and currency.
By the way, you could actually you can
crank the leverage down to 80% and you
pay 8% or you can crank the leverage up
to 1.5 and pay 15%.
Slightly more risk at 1.5 than it is at
eight. But people will do both. They'll
crank the leverage up and they'll crank
it down.
>> Okay. What's digital money? Digital
money is zero vault with a yield in
excess of the risk-free rate. Who wants
it? Everybody wants it.
>> How big's the market? 200.
>> If you had a bank, if you had a bank in
the UAE that paid 8% on bank deposits,
might you get 10 trillion?
Okay. You could charge a 100 basis
points, Danny.
Charge a 100 basis points on 10
trillion.
That's a hundred billion a year.
>> Mhm.
>> Okay. The entire gross national product
of Abu Dhabi is 330 billion.
>> And in that case, every rich person in
the world is going to be sending their
money there,
>> which is the perfect
the the perfect uh nation state
strategy,
>> the perfect business strategy, the
perfect banking strategy, the perfect
product strategy.
Okay, if you're if you're if you're UAE,
what do you want? Do you want all the
people in the world or just their money?
I'll give you a choice. You can have all
the people in the world. No, I don't
want a billion people. You can have all
the rich people in the world. Oh, now I
have 20 million people here. Or you can
just have all the money of the rich
people in the world.
I just want their money.
>> Mhm.
>> Okay. How do you do it? Just take a
bank, offer a digital money account, pay
8%, keep 100 basis points, buy digital
credit, blend it with some currency
equivalents. Maybe you put on a
volatility buffer. Maybe you don't need
a volatility buffer. Okay, now you make
100 basis points. You slurp up 10
trillion. Now you're making Now you've
increased your gross national product by
30%.
Slurp up 30%, double the GDP. Okay, I
double the GDP. How many people does it
take? Oh, 100.
Okay, a 100 people making
a hundred billion a year. Okay, I give
you an idea to make a billion dollars a
person a year.
You have a better idea for me?
>> I don't have a better idea.
>> Absolutely not.
>> Okay. Okay. So, now we're back to the
question of why don't I do something
else?
>> Okay. Because I'm giving you the ideal
product. Uh digital credit is the feed
stock to the entire you know the entire
banking system. In fact, if you create
digital money, not only do you take all
the bank deposits,
you take all the treasury credit, you
take all the repos, you take all the
shortdated instruments, but if you look
at everyone that bought junk bonds,
corporate bonds, mortgage back
securities,
uh, five-year bonds, 10-year bonds,
sovereign debt, municipal bonds, why did
they not just put their money in a money
market?
The answer is they were reaching for
yield.
>> Mhm. or a tax advantage, right?
How big is that? $300 trillion, maybe
more. Okay. How much of that capital
would simply go to a bank account that
paid by the way? All that capital
blended in dollars yields 5%.
All of it. And what do you do? You take
on duration risk and you take on credit
risk to get to 5%. If you don't want
that, you're ripped back to 3% or 2% or
or whatever the number is.
[clears throat] Um,
so I offer a bank and I offer you 7%.
How much of the 300 trillion would go to
that? No duration risk, no credit risk,
>> all of it.
All of it. Okay.
Now, here's the issue. How do you create
digital money? Well, to create digital
money, you need to take digital credit,
blend it with a little bit of currency,
so you have a liquidity buffer, maybe
put on uh put on a reserve on top of it
uh for your for a volatility buffer.
Then you need to get a regulatory stamp
of approval, right? You need a a banking
regulator to say you can offer the
account or you need a securities
regulator to say okay you can offer this
as an ETF
>> or you can offer that or or you can
offer this as a private fund or you need
a digital assets regulator to say you
can offer this as a digital stable coin.
>> Okay. So you put the regulatory stamp on
it. You put the buffer on. You do some
active management for redemption. You
know, people want daily redemptions and
they want they want it to hold stable
NAV and so we can't necessarily do that.
Like I can't give you a regulated bank
account in the UAE because you know Mike
are you going to start a bank in the
UAE? No.
Like I can't why would I do that, right?
They could do that.
>> Am I going to start a bank to compete
with Morgan Stanley?
Well, you know, you know, I think like
in 1860, right,
Morgan Stanley got started. 18 They were
financing the Civil War. Okay.
>> Right. And so the point is, why would I
want to do why do I want to compete with
JP Morgan or Morgan Stanley? I don't
want to. I don't want to compete with
Fab or Emirates Bank or Barclay's Bank.
>> I don't I don't need to.
>> Yeah.
>> Right. Because [clears throat]
if you want to create digital money,
you need digital credit,
STRC.
Okay. How many banks are there in the
world?
>> Thousands.
>> Tens of thousands.
There's 5,000 banks in the US.
>> Must be
tens of thousands of banks. So, there's
no shortage of banks with sales forces
and good relationships with regulators,
right? there's a bank in Japan that gets
along well with, you know, the Japanese
regulators. Do I want to go to Japan and
start the world's biggest bank in Japan?
Of course not. Do I want to start the
world's biggest bank in Germany? Of
course not. Do I want to be Deutsch
Bank? Do I want to be, you know, the
biggest bank in Switzerland? Of course
not. So, there's no point in competing
with the banking business.
The idea is digital money, high-powered
money, highowered money based on
Bitcoin. That's the idea, not my idea,
right? I mean, it it popped up many
years ago in the Bitcoin community. Um,
so if you want to create high-powered
money, you need to strip the ball and
you need to integrate it into the
currency system of the world. And so I
think it's a simple three-step process.
You start with digital capital. You
layer on digital credit and then a third
party, a bank or a money manager
actively manages it and then puts the
regulatory approval on it and then
markets it and brands it to create
digital money. Vanguard can create it.
Black Rockck can create it. Emirates
Bank can create it. Deutsch Bank can
create it. The Morgan Stanley can create
it. JP Morgan can create it. Do you not
agree with me that those are all much
more much better brands with much better
distribution with much better platform
than my company?
>> Yeah.
>> Right.
>> So a successful business strategy is not
not compete with everybody and be
intentionally, you know, obnoxious.
Like we don't need to topple the United
States government. We don't need to
topple the banking system. We don't need
to topple the dollar. We don't need to
topple the credit market. We don't need
to topple the commercial banks, the
investment banks. We don't need to
replace any of them. What we need to do
is figure out how to make them
successful and make them the best
version of themsel.
>> Right? So in this particular case, you
take STRC, you take a digital credit
instrument and you offer it as the
universal, you know, financial
sweetener, right? As the feed stock.
It's it's diesel or kerosene.
It's like I I show up in Saudi Arabia
and I got gasoline. What I don't have is
service stations and auto dealerships
and highways and auto manufacturers and
drivers education schools and police
force and garages.
And do I want to create all that? No. I
just literally want to sell tankers
worth of gasoline. and I want some local
business. It's like if I should happen
to find someone that already has all
that stuff,
>> why build it?
>> I would like to say, well, you know,
here I'm going to give you something 10
times better than what you're currently
running your industry on, and then you
get to get rich.
>> I mean, that sounds like a good deal. Is
this
>> No, now here's here's the the most
important question. If I offer you a
digital credit instrument that pays you
say right now it's 11% dividend tax
deferred but let's say it's 10% to make
the math easy. I give you 10% dividend
income on a digital credit instrument.
How much do you want to buy?
It's like
infinite.
Okay. What what's the market for that?
The market for that literally is 10 2030
trillion. Okay. Then the question is why
wouldn't you buy it?
What's keeping you from buying that?
Like if I'm going to give you something
which is which is
10% yielding and you can build any bank
account or any money market fund private
or public or any any stable coin or
anything on top of it.
Okay? And if the market right now is
$300 trillion of credit offering 5%.
And we're offering 10%. By the way, it's
10% tax deferred, so it's really 15%
blended. So [clears throat] if we have
something which is three times better
than the rest of the world, why wouldn't
you buy it? You know, tell me.
>> I mean, I don't know why you won't buy.
I guess the only reason someone maybe
won't buy it is if they didn't trust the
sort of Bitcoin backed side of it.
>> Okay. Well, we can we can rifle through
them. Okay. I wouldn't buy it because I
don't believe in I think Bitcoin's going
to zero tomorrow. I don't trust Bitcoin.
>> Then I don't buy it because I don't I
don't trust the credit of the issuer.
>> For example, I want to sell you $10
billion of this instrument, but I've
only got $1 billion of Bitcoin to back
it.
>> You see?
>> Yeah. If the credit if the issuer isn't
creditworthy, I wouldn't buy it.
>> And then the third reason I wouldn't buy
it is because I think the management
team is distracted by other things.
And that's a very long- winded answer to
your question. Why wouldn't I want to be
a bank? Oh, and the fourth reason I
wouldn't buy it is because the the
person that's offering it to me wants to
compete with me.
>> So So the answer to the question is
because you don't want to get
distracted. You want to focus on what
you're doing right now.
>> Laser like laser focused. Like if you've
created the world's greatest product
>> and if you have a vision for for a
digital transformation of the monetary
system of the world and the banking
system of the world and the credit
markets of the world. If that vision is
digital credit built on digital capital,
then why wouldn't you why wouldn't you
focus on that? Mh.
>> Everything else is a dilutive
distraction.
Right. Right. Like you you have the
world's greatest product. You can either
sell a trillion dollars of it or you can
go find the next thing.
>> Yeah. You understand that your odds of
actually succeeding at the first thing
go down exponentially if you come up
with a second idea. M
>> when you when you split
to three four ideas, your odds of
succeeding fall exponentially.
And so
so it's a it's not a good idea to get
distracted.
It's also, by the way, it's not a good
idea to compete with your customer.
If if I'm actually knocking on the door
of JP Morgan and First Bank of Abu Dhabi
and Emirates Bank and Morgan Stanley and
City and Bank of America and Black
Rockck and Vanguard and I'm offering
them digital money. It's like like
here's
let's talk about sales, Danny.
You're a salesperson and I and you show
up to the customer and here's your two
pitches. Uh, I've got the best company
in the world. We're the smartest and you
should buy our stock and bet on us
because we're smart.
That's a pitch.
>> Or,
I've got the best product in the world.
You can buy this product. It will cut
your cost to zero and it'll delight you
and you'll, you know, it'll be very
enjoyable. It's like the iPhone. It's
consumer product. That's pitch.
>> Or
I have an industrial product. If you buy
this, you can create robots and be the
most valuable company in the world
yourself. I'm going to give you a chip
and you will become the most valuable
company in the world. I have unlimited
free thermonuclear reactor in a pocket
and you can put it into your cars and
you can create flying hover cars and you
can become the greatest company on earth
with the greatest product on earth and
I'll be your vendor or even better I
have a product you can put it into your
bank your bank will be the biggest bank
in the world and your country will be
the most the richest country in the
world and your country and your
children's children's children will be
rich forever and you'll be the most
powerful company and the most powerful
ful country with the most prosperous
people and you'll create the greatest
company because you'll have the greatest
product in the world and I'm just going
to be your humble supplier.
Which of the three sales pitches do you
think is the most powerful sales pitch?
>> Easy decision.
>> Yeah. You see?
>> Mhm.
>> And this is the point of Bitcoin, which
is you don't by show up and say, "Guess
what? I invented something smarter than
what you have and you're stupid and I'm
smart and we're gonna crush you to death
because you're stupid and we're better."
Right? Don't show up with that with that
pitch. Or or you know, you have this
business, you have a bank, but it's a
20th century bank and it's going to
zero. So, what you ought to do is just
sell your stock in that bank and buy the
stock in my digital bank, which is 21st
century. Don't There's no reason to be
confrontational and negative. Why don't
you be inclusive
>> and [clears throat] aspirational?
Let everyone else win
with you. Right? And that's my view with
Bitcoin all the way forward. Bitcoin is
for everybody. Everybody is better with
Bitcoin. The government, the
corporation, the people richer than you,
people more powerful than you, people
more famous than you,
>> right? People that have politics you
disagree with, they can all embrace
Bitcoin and they will all benefit from
it and you will benefit from it. Right?
That's at the base layer. That's digital
capital. With digital credit, you know,
we're creating digital credit. Am I
worried that someone else might copy it?
No. Because if a hundred companies copy
it and they also issue digital credit,
that will accelerate the transformation
of the credit markets and we all win
together, right? They're actually
helping, we're helping each other.
That's a good thing, too.
>> Embrace that. And then when you go to
see the customer, right, the small ideas
is we have a great product, you should
buy our equity.
The bigger idea is we have a great
product. [cough and clears throat] You
should buy the product to make your life
better. But the greatest idea is we have
a digital credit product. You can
actually build it into your financial
product, build it into your bank, build
it into your your uh future, and you can
have the greatest product in the world.
And you can be the greatest company in
the world. And you can be the most
powerful nation in the world. Empower
others,
right? Empower others by allowing them
to be part of your future. And you can
see if you want Bitcoin, right? What is
hyper Bitcoinization? Hyper
Bitcoinization is not all the
governments and the banks and the
corporations all go away.
>> Yes, they all have Bitcoin.
>> Right? Next time you sit in a dentist
chair and you look up and imagine all
the governments and all the corporations
went away and then imagine the guy that
manufactures the Novacaane and the drill
bit, you know, and the X-ray machine
also went away and then think about how
they deal with your toothache. The point
is the future is not corporations and
governments go away and banks go away.
The future is not currencies like the
dollar go away. The future is
we embrace Bitcoin as digital capital.
We rebuild the entire economy with that
as the base layer.
Then we create products on top of it
whether it's digital insurance or
digital credit or digital banking or
digital derivatives. And and I am not
the expert in digital banking, digital
derivatives or digital insurance. Nor am
I going to purport to be. I'm just going
to focus on digital credit. And I'm not
even the expert in digital credit
because there's a hundred flavors of
digital credit. I'm just going to focus
upon the digital credit that we focused
on [clears throat] and digital treasury
credit.
And what I would say is that if you
actually take that credit and you a and
then you synchronize it with the dollar
and the yen and the euro
and the real and the pound, you
synchronize the digital credit with the
with the currency systems of the world
and you're synchronizing it with the
$300 trillion credit market. Then that
becomes the base layer for a new type of
digital money. And and high-powered
money is the yen yielding 6%, the pound
yielding 8%, the dollar yielding 8%, the
euro yielding whatever it yields.
Whatever whatever the currency frame of
reference is, wherever your liabilities
are, I'm going to give you that with no
currency risk, but with with a risk-free
rate,
ideally, which exceeds the inflation
rate of that currency, right?
>> Right. If if the dollar's expanding at
8% and I can give you digital money that
yields 8% tax deferred, then I just gave
you a completely stable instrument that
lets you keep up with inflation
and then you don't got to complain that
you bought Bitcoin at the all-time high
94 days ago and now it's traded down or
you know you bought whatever stock, some
Bitcoin treasury company three months
ago and it traded down. It's like I mean
the truth is when you buy Bitcoin,
you're a capital investor. You got to
have a four-year time horizon. When you
buy equity, you're an equity investor.
You got to have a four-year time
horizon. And you take equity risk,
right? It's like if you don't want to
take risk and you don't want to take
duration, you don't want credit risk.
You don't want duration risk. You don't
want equity risk. You want money.
>> Who do you want it from? You want it
from a too big to fail bank.
So what is the what is the future,
right? The brilliant future is the 200
biggest banks in the world offer digital
money accounts that pay double what
traditional money markets pay and 10 or
20%
of the money in the world flows into
those bank accounts. Maybe 30, maybe 40,
maybe 50. Remember what I said though?
It took 30 years for 75% of the people
to agree that electricity made sense.
How long did it take any rational
thinker? 30 seconds. Takes 30 seconds
for a rational thinker to figure out
what it took the world 30 years to 75%
agree on.
So if we create digital credit and we
wire it and then we create digital money
and then we wire it into the banking
system of the world,
you're going to have delivered a a
product which is you know three times
better or you know depending on how you
val how valuable is it for you to
collect $120,000 a year instead of
$40,000 a year. Is that three times
better or is that infinitely better?
Yeah,
>> might be infinitely better, right? Um,
so we'll create that. It'll take a mount
of time. And, uh, what's the risk
factor?
The risk factor is is distraction of the
management team. It's ego, right? It's
it's always ego, Danny. It's it's you
have a you have something good and your
ego tells you you got to make it better,
right? It's like if you want to segue
into into the controversy dour right
now, it's like Bitcoin will fail if it
doesn't have larger block sizes. That
was the controversy. Then Bitcoin will
fail and that gave us the block size
word. Bitcoin will fail unless it has
more functionality and that gave us tap
routt. Bitcoin will fail if it doesn't
use less energy and that gave us the
ESG, you know, wars. Bitcoin will fail
if a billion people can't self-custody
and all of a sudden you need a hundred
bit proposals to to scale up to scale
that up. Bitcoin will fail if it doesn't
have smart contracts and you need that.
Bitcoin will fail unless we're quantum
resistant right now. And it's it's all
of this alarmism and its ego. People
have these ideas and they want to be
very important and so they want to
represent their ego and and they want to
drive
dilutive distractions in a hundred ways.
And I would say
I would say that's how that's how
empires fail. Why is California
struggling? Uh because you get so rich
and so successful that you feel like you
can do whatever you want,
right? Why why is Europe struggling?
It's like after you win, you decide you
have to declare universal health care,
universal child care, universal this
care, universal that care, universal
whatever.
Like the the idea that in California
they're giving repres reparations to
slaves. No one was ever a slave and
people that lived there never had
slaves. And yet somehow we think we can
write a wrong that took place somewhere
else in the world to other people
because we have infinite money.
Well, so I think that every empire
collapses because people think they've
been successful, so now they can expand,
>> right? And and that's the most
pernitious thing at a protocol level.
It's the most pernitious thing at a city
when the mayor of the city says, "Hey,
we're going to give free needles and
free healthcare and free housing and
free whatever and free Uber rides and
free blah blah blah. We're going to
raise taxes to do it." And then everyone
that creates the capital leaves. And
then everyone that doesn't have any
that's a liability arrives and you've
swapped out your productive citizens for
non-productive citizens and the entire
economy collapses.
>> Yep.
>> Right. And did it happen in Easter
Island? Yeah. It hap I mean they thought
that they could create like large stone
statues. It's like you know how to 40
foot high stone statues contribute to
the economy of a you know Pacific island
where we need fish to eat. My friend, we
need the wood for the canoes to to to
catch the fish so we don't starve to
death. No, we will chop them down so we
can create large stone statues because
the gods demand it. It's like what you
have is you have a tipped power
structure.
And that is my way of addressing what
destroys companies, Danny. It's the CEO
and the management team are successful.
They're like, "Well, we've succeeded in
this, so now we can do this, and now we
can do the next thing, and now now that
we're doing this, we're expanding into
this, and we're expanding into this,
we're expanding into this, and we're
expanding into that." Why? Why do we do
it? Because we can. It's a Napoleonic
complex,
you know? It's like, I got to spread my
ideology and my ideas to the frozen
tundra of Russia in the winter and I'm
going to kill them if they disagree with
me spreading my ideas to them because I
was put on earth to do this. And so I so
I think that um my advice to any
entrepreneur is focus
>> and and check your ego. And the reason I
can do it is because I'm 60 years old
and because I was 30 once. I was a 30 35
year old successful entrepreneur once
and as soon as I was successful I came
up with 10 more ideas and each one of
them was ambitious and I split my
energies and my company's energies 10
different ways and what you realize is
it's very very challenging to do one
thing well in this world and uh you
shouldn't get distracted. So
we're not getting distracted, right?
We're focused on an idea. It's a big
idea. We want to create digital credit
as the base layer for digital money. And
if that if that one idea works, that
would make us the biggest company on
earth and that would make that would
make that the most successful product
ever. And so humility dictates that once
you come up with a good idea,
you might want to focus 100% of your
energy in making that idea successful.
And it's cavalier. It's cavalier and
irresponsible to like run off and chase
after the next 99 ideas like because
you're putting at risk
the important one. you're putting at
risk just like that's why I'm a
conservative defender of the protocol. I
don't like big protocol because if
Bitcoin is the idea and it's already
it's already succeeding and it's going
from nothing to two trillion to 20
trillion to 200 trillion, then don't put
that at risk, right? Don't put that at
risk until you have overwhelming global
consensus that the thing that you're
doing is necessary to derisk it.
>> Right? And and if I want to destroy a
company, I just walk into the boardroom
with a 100 good ideas and I have them
fund all of them. If I want to destroy
the protocol, I just fund 100 BIP
proposals with unlimited money and I and
I and I get the best engineers and I
fund everything. And if you want to
destroy a city, you fund every possible
program. You know, we're going to clean
up the environment and we're going to
give free lunches and free this and free
that. And you know, you see what happens
in Minneapolis. Like, oh, we got to give
like child health care and it's free and
we got to do it fast and pretty soon you
find out that you're funding
non-existent children.
you know, like they notice, you know,
there's this explosion of of autism and
and all of these other ADHD diagnoses.
Well, when the government gives you
$10,000 a year for every person
diagnosed with autism or ADHD, you will
generate a lot more of those diagnosis.
If the government's buying that
diagnosis, the free market generates it.
So
if you decide that if you have infinite
power or infinite money, if you're a
politician with infinite power and you
want to pursue a 100 good ideas, that's
what destroys the society.
>> Mhm.
>> And if you're if you're a businessman, a
CEO, and you have infinite money and you
have 100 good ideas and you presume
that's what destroys the company.
>> Yeah. So just staying laser focused. I
love it. Um earlier when you were
talking about digital money, um recently
you've just started stacking dollars as
well as Bitcoin. Is that with an idea of
being that liquidity pool for a digital
money or is that more to try and um sort
of
get rid of some of the nervousness
around investing in the preferred
because of the interest payments?
>> Uh the reason for for creating uh a USD
reserve is to improve the
creditworthiness of the company and the
eyes of the credit investors.
>> Okay.
>> Right. The people that are buying
buying the credit are buying the credit
because they think Bitcoin's too
volatile
>> and they think the equity is too
volatile. You see?
>> Yeah.
>> Right. And so, so you can do things that
are good for a Bitcoin investor, someone
that wanted if you're an equity
investor, you want more Bitcoin, more
volatility.
But if you're a credit investor, right,
you want something which is most creditw
worthy. So how do you improve the
creditworthiness
of the company if you want to be the
biggest issue of digital credit? Well,
those are those investors, they don't
really have a strong view on Bitcoin one
way or the other, but they don't like
volatility. They don't like uncertainty,
right? Mhm.
>> And uh right now you have you're you're
creating a credit profile in the eyes of
say the S&P credit rating agencies or
Fitch or Moody's or in the eyes of a
very conservative credit investor.
So like I you know it's it's it's
complicated for me to assess the
statistical risk of being able to
generate $800 million of cash over the
next 12 months in the equity markets.
But it's not complicated to assess
whether or not you have $800 million of
cash in the bank if you have $800
million cash. Right.
>> Yeah.
>> Right. If I said to you, if your life
depended on it like, Danny, I'm going to
put a gun to your head. I'm going to
pull the trigger and blow your brains
out if you're wrong. I have 800 million
in cash in the bank and I need to pay a
bill on Monday. Or I have the ability to
generate $800 million of cash by selling
equity. it's, you know, there's a lot of
equity liquidity in the market and you
have to risk your life. Which of the two
trades would you wait?
>> Even though I'd probably believe the
equity, you're obviously picking the
money.
>> Yeah.
>> Yeah. Because because what we're talking
about here is um
the whole idea of credit is to strip the
volatility and strip the risk
>> Yeah.
>> off of the capital,
right? Um, if you're a capital investor
and you have a 30-year time horizon and
you have a million dollars, you buy a
million dollars of Bitcoin, you hold it,
you get 30% AR for the rest of your
life. It's a no-brainer.
If you're a three-year-old
and you need $10,000 a month or X,000 a
month or else you starve to death and
you're three years old,
you would settle for 10%.
You would settle for 10. You know, you
don't want 30%. you would take $10,000 a
month or $8,000 a month on a million
dollar of capital if I said I'll give
you $8,000 a month forever
and I'm going to keep
by I'm going to keep twothirds up front
but what I'm really keeping is 90% of
the capital gains. If you do the math
over a long period, 90% of the economic
benefit goes to the company, 10% goes to
the credit investor.
But if your life depended upon having
the money, if you were going to get
thrown out of your house or your
marriage was going to fail and your kids
were going to, you know, not eat or you
weren't going to pay your medical bill
and you were going to die, then then all
of the arguments about theoretically
it's better to accept the volatility,
>> they go out the window.
>> Like you have to accept two things if
you're a capital investor. And by the
way, capital investor is is Bitcoin
holder,
>> not equity investor. Equity is MSTR
holder. If you're a cap investor, you
have to accept volatility and duration.
>> You're you're you're not accepting, you
know, the equity risk because you're
just holding Bitcoin, but you're
accepting you're basically saying, I'm
holding it for four years minimum, 10
years ideally, and you're accepting 45
35 45 ball. Um, but if you're a credit
investor, I mean, ideally people want
zero vault. I mean, that's the ideal
product is is I have a million dollars.
I put it into a bank and it generates
$100,000 a year and I get $8,000 a month
and I get it every month for the rest of
my life tax deferred ideally. But
>> whether it's taxable or not, I just want
that because that way I can buy an
apartment that cost me x thousands and I
can pay for healthare and I can go to
school and I can take a girl out on a
date or I can buy furniture,
pay electricity,
>> right? As I've said, the world is built
on capital, but the world runs on
credit,
you know, and
so what's the logic of what we're doing?
We're a company. What is the company's
business? Like how are we creating
value? The number the big way we're
creating value is we're creating digital
credit.
Who's the customer? It's not the capital
investor, not the equity investor,
right? The capital investor is buying
Bitcoin. They're not our customer.
They're our ally. We're allies together.
We're on the journey together.
The credit investor is buying STRC. They
want to trade at $100 and pay them a
monthly dividend. And they want to know
that no matter what happens to Bitcoin,
no matter what happens to MSTR, they're
just getting that drip, right?
If the customer is happy, right? If if
the credit investor is happy, then we
buy Bitcoin and that creates
amplification for the equity and then
the equity has value. If the company can
sell $10 billion of credit a year and if
we're capturing 90% of the economic
benefit of the credit, okay, I just
raised $10 billion. It's going to be
worth a hundred billion in 10 years. I
just captured 90% of the benefit. I made
$90 billion for the equity.
Right.
>> I'm creating the I'm creating
shareholder value by selling the credit.
The equity value is the is is the um
after is the result, right?
>> That makes sense.
>> And so you're running the company for
the benefit of the creditors.
But it turns out that if we run the
company for the benefit of the
creditors, then the demand for the
credit increases and the stability of
the credit increases, right? Do you want
it to trade with a V of one or a V of 10
or a V of 20
>> when uh when we didn't have that USD
reserve, Bitcoin crashed.
>> Y
>> and STRC went from $100 down to $92.
>> And then everybody chatters like maybe
they can't pay the dividend, right?
And so
then we put
$2.25 billion of cash on the balance
sheet and now you're like, well, for the
next three years they're going to pay
out of the the reserve even if they
can't raise equity capital. So
>> So all of a sudden that strips the risk.
If you strip the risk, you strip the va
the volatility of STRC. uh it spiked to
19 after that crash and now it's working
its way down to like seven. It's been
it's been falling and it should fall
down to five or four or three or two or
one, right? So, so our our operation is
to strip the V and to strip the V we
have to strip the risk and to strip the
risk it means that we have to put some
cash on the balance sheet and in the
near term in the near term that's
slightly dilutive
to the to the equity. Instead of a BTC
yield of 27% you might have a BTC yield
of 23%.
>> Yep. But at the end of the day,
>> sorry, that's because you did the ATM to
do it and obviously didn't buy Bitcoin
>> because we sell some equity and we hold
buy cash instead of buying dollars.
>> So it's nearer somewhat dilutive,
but on the other hand, the market was
valuing us with a P to E of one
>> like like they were giving us a a
premium of 23% against or 25% against
a BT yield of 25%. So the market gives
you a P to E of one. So the market
doesn't believe you can keep doing that
anyway.
Okay? So you got to ask the question,
well if the company never sells any
credit again for the next decade, then
what's the PD, you know, what's the
yield going to be? Well, the yield's
going to zero.
>> And so the company trades, if the
company doesn't sell credit,
then it doesn't matter. So,
what you want to do is not try to
maximize the BTC yield with an
expectation that it's a one-year thing.
What you want to do is create a business
model where you can generate a
consistent BTC yield for the equity
investors for the next decade. So, like
we'd be better if we generated a 10%
yield every year for 10 years, then
maybe get a PTO of 10 and then you trade
at a premium of 100% to your NAB.
That's better than a than a BTC to 25%
with uncertainty about how you're
getting there.
>> Totally. That makes sense.
>> Yeah. And the challenge that some of the
Bitcoin treasury companies have is if
you're just selling equity, there's an
uncertainty about how many years you can
continue to generate yield just by
selling equity. Mhm.
>> Which is why you want to look at an
operating model, which is, you know,
some kind of financial instrument or
some model where you generate consistent
yields through an operating business, an
insurance business, a banking business,
a derivatives business, um a financial
activity, a credit business, etc.
So what we've what we're doing is
creating a digital credit vehicle, you
know, and you know the you look at the
company going into 2026 and it's you got
$2.25 billion of cash, you got $60
billion of capital of of Bitcoin. Okay,
you got 6263 billion of capital.
we should reasonably
be able to sell uh a dime worth of
credit for every dollar of capital. Like
so you have 60 billion of capital, sell
$6 billion of credit a year. That's
sustainable in theory in perpetuity,
right? I mean, so you're really building
a business where you know, you look to
sell $6 billion of credit against 60
billion of capital, have the capital
appreciate to hundred billion. The next
year sell 10 billion dollars of credit
have the capital appreciate to 130 140.
The next year sell 13 billion dollars of
credit. You're like you know what's your
cash flow? Oh 6 billion 10 billion 15
billion 20 billion 25 billion 30
billion.
The equity the equity capital markets
they like a business model well
understood predictable.
the credit markets, they like an issuer,
highly [snorts] over capitalized, over
collateralized, and oftentimes they like
third-party endorsements. That the thing
that we're struggling against in the
credit markets is is the Basel rules
currently give zero value to Bitcoin. So
you have you could have 60 billion, they
multiply by zero, and the credit rating
agencies think it's worth nothing.
>> I see. So getting that zero multiplier
to go to 25% or 50 or 100% is a big deal
in getting institutional adoption by the
traditional credit establishment.
>> So that's what we need to see in 26.
>> Yeah. If you're if you're making a list
of like our our regulatory hurdles, it
was, you know, get the insurance
companies to ensure us, get the
accounting profession to give us fair
accounting, right? Make make sure the
IRS and the Treasury doesn't unfairly
tax us with CAMY. Make sure that the
indexes uh you know don't discriminate
against us by not allowing us in indexes
because we're digital instead of
whatever, right? Get the banks to agree
to bank us and extend credit and
get the regulators to allow us to take a
company public, which all all them those
things we've overcome.
I think that the last thing to focus
upon is is get the banking regulators to
acknowledge digital assets as assets.
>> Yeah.
>> Right. Yeah. You know, if someone deems
you to be a non-person, it's like, okay,
well, you can have 100 million voters
and you all get zero votes each,
you don't really have equal
participation in the society. So, so
moving from from being non uh
illegitimate assets to legitimate assets
is a big deal. And believe it or not,
sometimes it's a committee of like eight
people that decide to legitimize you or
not.
>> Mhm. So, we need to get them on board.
>> Yeah.
>> Um Michael, I know you're short on time.
This has been amazing. Um thank you for
having us here. We're in the library.
I'm going to ask you a question
completely on a tangent to finish. Do
you have a book that you would recommend
anyone to read? One that's like had a
real impact on your life. It doesn't
obviously not a Bitcoin book, just
anything.
>> I think that if you have copious free
time, you know, there are two histories.
Either read uh the story of
civilization, which is Will Durant's
history, and it's like 11 volumes, maybe
12 to 15,000 pages. Start at the
beginning, go to the end.
might take you a few hundred hours. You
can listen to it in audio form or you
can read it. Read it if you can because
there's a lot of graphic images in it.
Uh I think that [clears throat]
it's a it's a balanced
it's a balanced uh history of the world.
I used to think it's comprehensive and I
realized no, it's a summary of the
history of the world, but compared to
what you studied in school, you probably
got the cliff notes and this was just a
intellectually responsible summary.
Uh, and so I would do that because if
you read
if you read the history of the world,
you know, the Asian histories, Middle
East, European histories, American
histories, you know, you'll have 1,000
examples of civilizations rising and
falling, maybe 10,000 examples, and
you'll see certain themes over and over
again, but it will immunize you or
inoculate you against falling for
you know the latest new idea jour
fattishness and I think that's very
helpful it gives you wisdom and I think
and [clears throat] for the Bitcoin
community in specific I think it's also
instructive to read Murray Rothbart's
histories right Murray Rothbart wrote
you know a a history of of economic
bought right
>> or uh conceived in liberty all of those
volumes. I think Rothbird wrote pretty
comprehensive economic histories and he
tells you the history of economic
intervention, political intervention,
monetary intervention and it's very
[clears throat] helpful to
to read that because
I think people are manipulated by the
idea dour and people are always
>> absolutely
>> they're always constructing some
broomemide or some simplistic idea like
well this represents this or this is the
first time this has happened or or this
happened for the first time and
you know and they act like there's some
righteous indignation or like like for
example you know
1971
you know we went off the gold standard
well let me tell you a secret like we
went off the gold standard 10,000 times
in the history of the world in fact
every single society you know in Russia
you know all 200 200 German
principalities, they all went off the
gold standard, right? The the example of
currency debasement is as old as we have
written history.
you know, uh, if you go back and you
read Rothbart's histories, what's
fascinating is he points out that every
20 years or every 30 years in the
Massachusetts Bay colony from 1650
through the revolution, some politician
decided it was a good idea to print
money and go fight a war and invade
Canada. And they would all issue a bunch
of credit and then they would go invade
Canada. they would lose come back and
the entire then they would default on
their obligations and they had
hyperinflation
and that was five times in one colony
and often times you'll read people will
say you know like America decided to
invade Canada this one time it's like no
actually or and this was an example of
the first time we debased the currency
well in fact every state debased the
currency and the you know the colonial
government during the Revolutionary War,
but it had happened 37 times before we
even had a colonial government. And then
it happened how many dozens of times
afterwards.
And so you see you see in these
histories all these patterns and they
and they just echo over and over again.
You know, there's a broomemide that circ
circulates through the crypto community
like, "Oh, yeah. The reformation, you
know, that was a separation of church
and state, and we're the separation of
money and state."
>> The Reformation was not the separation
of church and state. If you actually
study it close enough, what you realize
is that Martin Luther
was a monk that came up with the idea
that maybe the German princes could just
keep their money and steal all of the
property from the Roman princes. It's
like like what it represented was the
combination of church with the state of
Germany with the northern German state.
And the German princes realized that if
they were going to seize the property
that the church held in Germany, they
needed God to endorse it. And so they
needed God to speak German. And so they
took a German monk who created Lutheran,
a Lutheran faith. They adopted the
Lutheran faith. They excommunicated the
Roman pope. And instead of onethird of
all the property in Germany being held
by the Roman Catholic Church, it was now
held by the German Protestant church.
And instead of 10% of all the money
going as tides to Rome, the 10% of the
money terminated back in Germany. And so
it was literally just the use of a
religious mechanism for political power
to to redirect economic power. And there
was never a separation of church and
state. The church has always been
aligned with the state. It turns out
that the French Catholic Church
terminated with the king of France. The
Spanish Catholic Church terminated with
the king of Spain. The Roman Catholic
Church terminated in Rome. There's a
Venetian Catholic Church that terminated
with the Doge of Venice. And if you
think that somehow the Protestant
Reformation was a reformation, then
explain how come the Protestants in
Switzerland became Calvinist because
they wanted to terminate all the money
and all the power in Switzerland. And
then the Protestants in Scotland,
Presbyterians, they wanted to terminate
the money and the power in Scotland.
>> And then the Protestants in the UK,
Anglicans, they wanted to terminate the
money and the power with the king of
England. And then you had the Puritans
and the Baptists and the Anabaptists.
And you know what Southern Baptist are?
The Southern Baptist formed because
there's a civil war and we couldn't very
well have all the money and the power
terminate with a northerner.
>> So we needed to split. And so you have
you have continual examples of of a
political struggle which was also an
economic struggle.
And people frame things as this is a
religious fight.
Well, it's a religious fight. I the
whole term barbarian, we killed them
because they were barbarians. They
engaged in barbaric activity. Barbarian
just means I speak a different language.
Just I'm an other. Okay. If I want to
kill someone, it's convenient for me if
they don't speak my language because I
can say that they're barbaric. And
barbaric means they're Satan worshiping
child sacrificing,
you know,
barbarians.
They're not there to defend themselves
and they can't because they don't know
what I said because they don't speak the
language I just said it in. And the joke
is the Greeks came up with that idea.
So, in essence, it gives you God's
permission to murder someone that lives
across the river and take their stuff,
right? And and this this entire idea,
you know, these things that echo through
history, it's it's I'm combining
religion with politics with economics
with money, and these are all
justifications for me to accumulate
power, seize power. If if I need to undo
the power of a Roman pope, I I very well
better create the Anglican church,
right?
And say that God spoke directly to me,
>> right? And and and that kind of was the
basis of the Lutheran idea, which is God
is German, God spoke to me. and he told
good Germans that the Roman Catholic,
you know, papist is not his spokesperson
on earth anymore.
So, I think when you see that you you
see that every one of these things,
they're not new. 1971 wasn't special.
Will Durant literally has a line. He,
you know, he's talking about a ro a
Russian Zar 16th century and he goes,
"Yeah, you know, the Russians are
debased the currency and it all became
worthless and people discovered that the
last thing in the world that you want to
save is money or whatever." It's like,
and he's talking about something 500
years ago in a culture you've never
heard of. And it was like just the 19th
time it had happened in the Russian
culture. So all of these things are are
are are echoing
right and and oftentimes
you know one of the most interesting
insights that comes out of out of uh
Rothbart's work and conceived in liberty
is is the colonies before the
revolutionary war were decentralized and
the reason that you had any virtue at
all was because when the governor of New
York dictated or or or
when they when the government governor
of New York said you can't own property
and you have no economic rights and you
can't operate a business people can get
in a canoe and cross the river and go to
New Jersey or Pennsylvania where they
might have a chance and when all of the
go by the way all the governors went
insane they were all insane autocrats
but when all of the governors and all of
the colonies had all these autocratic
rules like oh yeah it's illegal to bake
bread or you know it's illegal to make a
hat there's is literally like the the
friend of the governor is the only guy
that could make hats in New York. They
had the most insane
communist authoritarian socialist
rules. When they all went insane, you
could just sort of go west.
>> Mhm.
and your competition was a ne a set of
Neolithic stone age tribes
and then you could do what you want and
and um you get to bake bread and make
your own hats and you get to
>> and
now here's the big reveal which is
we're taught in school that somehow the
Revolutionary War was the calling of
standing up against tyranny and that the
job wasn't done until we formed the
Constitution and created the United
States. But what you really realize is
is
we probably were at the ideal point when
there were just a bunch of colonies and
there was no United States because the
United States was a power grab because a
bunch of a bunch of of federalists and
centralized businessmen wanted to find a
way to enex hundreds of thousands of
acres in Ohio. and they needed a federal
government to give them title to the
millions of acres west of the colonies.
>> And so they needed to go to the
government. So we created a federal
government. They could actually buy a
million acres and they show up on the
million acres and kick off all the
homesteaders and say, "We have a title
from the federal government of the
United States. You owe us taxes or we
own your land."
And so all of these political
formations, they've always been about
balance of power and property rights
and the denial of property rights. And
what you think, what you were taught,
you know, that was the separation of
church and state is exactly the opposite
of what literally happened. And what you
were taught was, oh, we formed a great
nation,
you know, to preserve people's rights.
It was exactly the opposite of what
happened to a lot of people. A lot of
people lost their rights, you know, and
um
once you understand that, it'll keep you
from being a simplistic idealist and you
realize that there there's a continual
there's a continual power struggle in
nature, in life, in history,
never ending,
right? all everything in history. It's a
it's continual never ending power
struggle over money, over power,
over property.
And if I want to murder half of the
nation and steal all their property,
generally the best way to do it is say
God said it was okay.
>> And so people go, well, you know, we've
been mired in religious wars forever.
Isn't that a tragedy?
We created the religious differences
to justify the war. And once you
understand that that the religious
differences were inevitable because
they're all part of the power struggle
between one party and another party,
then I think it helps you to understand
why the world is the way it is and and
why these power struggles will continue.
>> All about money and power. Well, it
sounds like I've got a couple hundred
hours of reading to do cuz that was I
was not aware of any of that. Um, but
thank you so much, Michael. This has
been great. Um, hope to do it again at
some point, but thank you.
>> Yeah, anytime.