Michael Saylor on BTC at $100K and the Future of MicroStrategy

[Music]

I guess I just want to start with the

fact that Bitcoin broke

$100,000 is this your first interview

since this Milestone yes it is and I

said this to Tucker cross and on

television I said I'm going to be buying

the top forever it it's okay now

everybody's got to do their thing the

shorts got to be short the Longs got to

be long the Traders got to trade the

haters got to hate this is a global

monetary asset it is worthy of attention

if it's not going to zero it's going to

a million Y and that's where we find

ourselves today welcome to Galaxy brains

an infinite amount of cash I'm your host

Alex Thor the US banking system is sound

and resilient Bitcoin made a new

all-time high if you're not long if

you're not long you're short satachi is

going to come on there laugh

hysterically go quiet all bitcoin's

going to be erased Bitcoin Bitcoin is

the best crypto user Bitcoin is going to

zero welcome back to Galaxy brains as

always I'm Alex Thorne head of firmwide

research at Galaxy Bitcoin not zero and

we have a great episode for you today

Michael sailor founder and chairman of

micro strategy is our guest we flew down

to Miami to interview Michael the day

that Bitcoin hit 100,000 for the first

time and this 90-minute interview is the

first long form interview with Michael

since that epic Milestone micro strategy

is the largest single entity holder of

Bitcoin in the world its stock is the

best performing this year year in the

world and we get into it deep with

Michael about his thoughts for the

Bitcoin strategic Reserve nation state

game theory for dollar dominance and

Bitcoin we talked with Michael about

micro strategies uh treasury operations

both now and its plans for the future as

well as some Bitcoin native topics like

proof of reserves Bitcoin development

and much more it's a fascinating

interview I know you will enjoy but

before we get to it I need to remind you

to please refer to the link to

disclaimer in the podcast notes and note

that none of the information in this

podcast constitutes investment advice or

an offer recommendation or solicitation

by Galaxy or any of its Affiliates to

buy or sell any Securities this is a

great episode Michael was on fire we

were uh down there the first day after

Bitcoin hit 100K and I know you'll enjoy

this interview Bim net is off this week

we'll catch up with him next week so

let's get right into it with Michael

sailor Michael sailor uh founder and

chairman of micro strategy thank you so

much for coming on Galaxy brins yeah

thanks for having me it's great to be

here Michael and I guess I just want to

start with the fact that Bitcoin broke

$100,000 I think this is is this your

first interview since uh this Milestone

yes it is do you feel uh Vindicated

what's your take is is it an important

Milestone I think uh it's an important

Milestone because when you get to the

100 to the six figure level I think it

sends the message to people that Bitcoin

is here to stay I think uh there's been

uh multiple stages of Bitcoin right

there there were the early years when it

wasn't clear what it was or whether

would

survive then there were the blocksize

War years when there was the big fight

over the identity of Bitcoin and what

was what was Bitcoin and what wasn't

Bitcoin and then I think from 2020 to

2024 I would say those were the crazy

years but there was a big the big

question was is Bitcoin an Institutional

great asset will it be embraced by

governments by corporations by

institutions by traditional Capital

markets and there was back and forth and

there was a lot of skepticism and you

know some people said it's too good to

be true some people said it's so good

they'll ban it some people said well

there'll be a little bit but it won't be

much and uh and then there's a big fight

over is it a currency or is it capital

and I think that um since November 5th

right we've seen kind of a surge from

like 68 67 all the way through

100 I think the answer that's been

question that the the question that's

been answered is is Bitcoin here to stay

is it an Institutional great asset will

it be

embraced by the wealth and the power of

the world and I think think busting

through 100,000 is is a numeric

punctuation uh to the emphatic answer to

that question which is yes yeah it will

be embraced a resounding yes you've

never been more right in your strategy

than at this very moment with Bitcoin at

$113,000

um what's the ride been like I mean i' I

think you know not just Bitcoin but

Micro strategy is maybe the most

important and biggest story in global

markets this year certainly from a stock

it's the best performing stock in the

world um what's that ride been like this

year uh it's been uh

exhilarating uh and uh it's full of

highs and lows I

think in the middle of 2020 it started

with um an act uh out of uh frustration

and

Desperation it was like we're going to

take a we're going to take a strategic

move because the alternative is a slow

death or quick death and once you get to

the point where your back is against the

wall you know you're going to do

something so at that point we're a bit

frustrated and we took our first Bitcoin

position then Bitcoin began to rally and

when Bitcoin rallied back toward the

all-time high at the time was just

heading toward

19,000 uh we moved into an opportunistic

phase and we were we opportunistically

found we could uh raise money in the

convertible bond market for less than 1%

interest and it's like what what if

someone wants to give you billions of

dollars for free to pursue your business

strategy right what CEO wouldn't take

the money for free right and so yeah we

did that and then we moved into sort of

a a what is it the the terrorized Zone

I think Bitcoin sorted up then it

crashed on the Chinese yeah the China

ban first the China ban and that the

then there was the environmental ESG

fund right Elon discovered that it used

electricity all of a sudden yeah we and

we fought our way through that and then

it surged back up again and then we went

into the crypto winter and we we fell

from 66,000 to

16,000 and so that 80% draw down I I

think that was uh you know the big test

because it shook out it shook out the

tourists and it also shook out everyone

that didn't know how to manage a capital

structure so you know the poorly

capitalized uh you know entities that

had lots of credit risk and and had L

had unhealthy leverage got taken out and

there was a lot of uh forced liquid and

panic selling of Bitcoin that took us to

the 16

66,000 and uh you just had to grit your

teeth and get through that and I would

say you know that was sort of the low

point right around the point where

silvergate Bank failed or like q1 2023

from from FTX to silvergate bank uh and

it was also sad I mean it was I mean a

lot of poorly run companies

uh failed because they were poorly run

but then there were a lot of good

companies I thought you know signature

silvergate were forced out of business

to no fault of their own they just uh

they were caught in choke point 2.0 and

that was somewhere between tragic and

coordinated even distasteful yeah

silvergate in particular to me because

they didn't go bankrupt they orderly it

was an orderly windown they didn't lose

any anybody's money um neither did

signature I know signature is like

almost like an assassination I would say

they're both political yeah yeah you are

you optimistic that that's that's going

to change under the new Administration I

am yeah I think we crawled out of the

Valley of the crypto winter and and we

crawled uh you know recovered back into

the 30s or the the 40s and then I think

we got into 2024 and I think in

2024 you know there's we started with

some uh

cautious

optimism Bitcoin grinding up a lot of

questions about the rest of the digital

assets economy but Bitcoin you know

recovering from the bottom on its own

without help from

anybody and then we got the approval of

the spot Bitcoin

ETFs and uh then we had the having and

the consequences the having were were a

number of things one there was a big

secular rotation of of capital from a

bunch of Bitcoin miners to micro

strategy the options market and Bitcoin

moved from the miners to micro strategy

so all of a sudden micro strategy uh

emerged as you know a leading volatility

liquidity trade in the crypto

ecosystem and we became aware of that

and I think the second thing is 450

Bitcoin a day which is $45 million a day

of sell got taken out of the market and

so the supply tightened and the natural

Supply Titan the market

matured the ETFs

legitimized uh the asset class and we

went into the summer and it was a big

summer uh the Summer where the Trump

campaign first of all you know caught a

huge amount of electricity in the

greater political economy and then Trump

embraced Bitcoin and embraced crypto

and the crypto community and the Bitcoin

Community embraced Trump uh that took us

into the November 5th elections and uh

and two things kind of happened uh

around that time frame on October

30th uh micro micro strategy announced

our 2121 plan we had basically gone and

done one convert a second convert a

third convert a fourth convert and a few

billion dollars of ATM is so we had

raised quite a bit of capital but we

were doing it peace meal quarter by

quarter and we decided it was time for

us to be more strategic so we announced

a $21 billion uh Equity shelf

registration and a $21 billion fixed

income plan over three years that was

the biggest uh Equity uh shelf

registration in the history of capital

markets so no one ever sold $21 billion

of equity like that ever right and and

that kind of flies past some people

because it's like what I'm saying is

like out of every company ever right

never done before the Bitcoin demand and

the Bitcoin company did it yeah one

Bitcoin company did it and of course

it's we did it because we have the

world's best use of proceeds right uh

the first time in in human history you

have a commodity that returns higher

higher than the S&P with higher

volatility than the S&P so you have 60

Vol 60 AR on bitcoin

going for many years versus 1515 for the

S&P now you had a commodity high allall

high performance you can put 100% on

your balance sheet well that means in

theory you can issue infinite Equity

right I mean as long as you can return

more than the S&P every other commodity

I mean real estate art gold it's 10v 10

AR SV 7 AR five five

so everything other than Bitcoin was

always less than the cost of capital

micro strategy you know we kind of

discovered we discovered a crypto

reactor that could be fueled by Bitcoin

and we put a re crypto reactor in the

middle of our company it's kind of like

turning on a nuclear reactor or putting

an internal combustion engine in a

Horseless

Carriage and it you know that's what we

learned in 2024 and we came in October

30th and we said this is what we're

going to do and that was very well

received by the capital markets that was

a big success yeah and the day after we

did that our stock outperformed every

magnificent 7 company and our stock

outperformed every Bitcoin company and

outperformed Bitcoin and that was a very

important signal to the market which is

the capital Market's going to line up

behind an operating company to pursue a

Bitcoin treasury strategy in size yeah

in size so we were ready to go the

market kind of started to take off and

then we get to November 5th and at 8:00

p.m. on November 5th Bitcoin is high 60s

and nobody knows whether it's going to

be a blue sweep or a red sweep or a red

and white and blue or right a split and

really the the timeline is if you get a

Blue

Wave bitcoin's going to grind up 20 to

40% a year against resistance the rest

of the digital assets industry is going

to trade sideways under Onslaught you

know gradually you know and who knows

hoping just fighting on could be bad

yeah yeah it could be bad but with the

red wave and by 8 am the next morning we

knew there was a red sweep of Congress

the Senate the house and the White House

at that point Bitcoin is going to Surge

up 40 60

80% the digital assets industry has a

new lease on life now you're going to

get a digital assets framework going to

get an end to the war in crypto we don't

know what it means but we know that the

alternative was fight on a Guerilla War

that's very painful a war of attrition

yeah and now what you've got is a

favorable tax regime a favorable you

know a low regulation regime a pro

crypto regime a pro Bitcoin you know

regime and also the Domino start to fall

Bitcoin surges up

and uh you know it goes from 69 to today

we're plus 100 so I don't have to say

the implication of that to everybody

right right it's pretty obvious the

impact of that on 20 million Bitcoins

right you

create eight 700 billion dollar yeah

since the election 700 billion dollars

in weeks but the other thing that

happened was micro strategy had we took

30 years to culate 500 million in

capital which we invested by September

October of 2020 we took four years

grinding away through the crypto winter

to find another $10 billion of capital

to invest in Bitcoin and then the next

four weeks of November we raised 13.5

billion dollars of

capital so and in November we bought

nearly like 150,000 Bitcoin it was your

biggest slug of Bitcoin ever at it there

were 15,000 Bitcoin mined in the month

of November right about 10 times that

when you start to work through the math

of what's going on here you can

see uh the political landscape changed

the headwinds became Tailwinds the

capital markets aligned they align

they're aligning behind the ETF

providers I mean Black Rock has had

record flow incredible yeah right and

micro strategy as record flows our

option interest surged to like hundred

billion do right and our liquidity

surged the point where we're the number

three stock after Nvidia and you know

and after Tesla and so the capital

markets discovered and supported Bitcoin

uh the political system did and now

we're starting to see The Dominoes fall

I mean the favorable comments by Jerome

pal not a surprise right his mark I mean

and everybody else it's you you can see

at this point the consensus is building

this is a global monetary asset it is

worthy of attention if it's not going to

zero it's going to a million yep and

that's where we find oursel today can I

ask you about the 2121 plan which was

Absol you're you're absolutely right

Earth shattering in Earth shaking in

capital markets I think and then proving

the demand in fact so much demand that I

think the latest convert that you guys

did at a 0% interest rate right zero

coupon up 55 points and we started to

looking to raise 1.75 billion which is

twice as big as our previous largest

convert we started twice as big and it

became $3 billion by the time we

finished and you've already raised 13

out of the

42 uh that's 30% over 3 years though

aren't you ahead of schedule like or

what you know what what is your pacing

going to look like you think yeah we are

had a schedule but you know there are a

lot of

unknowns on October 30th uh we weren't

sure how enthusiastically the capital

markets would Embrace us you've got

you've got the convertible investors

you've also got the equity investors

you've also got the options Traders so

so we have many many constituencies so

we had to see how they would react and

that was a big thumbs up from all of

them M and then we didn't really know

the outcome of the election and and I I

really do think the red sweep on

November 5th is probably the single most

important thing that's happened maybe to

the entire crypto economy in the history

of the economy do you think there might

ever be interest uh in those Capital

markets for like a minus 50 bips coupon

cuz you're you found a way to turn free

money into Bitcoin basically what about

making them pay you okay well I I I

think the most important point to to

make here is we're not really limited to

the convertible bond market right

convertible bonds just happen to be one

form of fixed income we've experimented

with all sorts of fixed income we've

tried asset-backed financing we've tried

senior debt there's junk bonds there's

also preferred stock uh and there and

there are various flavors of that and

Structured Products um in October 30 we

laid out our treasury strategy and our

treasury strategy is it looks like this

it's you've got a crypto commodity

called Bitcoin which is 60

AR 60 volatility okay

6060

okay the uh the performance the 60r

that's a form of

energy and then the volatil is another

form of energy it's it's kind of like uh

potential in kinetic energy or you could

think of it as a you know you got a

train moving 60 miles an hour and you

got a Flywheel spinning 60 RPM on the

train and that's your energy okay so

that's what's coming out of the crypto

economy the macro economy there's a

drive shaft and that's being driven into

the spot ETFs and if you wrap it with

ibit or fbtc you can buy

6060 right in the form of uh security

or you can buy

6060 in the form of a

commodity micro strategy as an operating

company what we're doing is is we're

stepping that up and we're stepping that

down right so some people want 15 what

they want is 25% of the return of

Bitcoin and you would think well you're

crazy well they'd rather have 15 ARR

five vol

no risk or or be 10x over collateralized

right uh just give me 15% but tell me

there's a very very small chance I you

know I don't get my principal back some

people want 15 15 by the way the entire

S&P index is people buying 15 15 right

right all you got to do is take 75% of

Bitcoin away and you can create 155

which is A1 trillion dollar right market

right now so one for of of fixed income

or one form of investors is to Target

that you can Target that in an in a a

fixed instrument where you're giving

people a Cash

coupon or you can Target it in a um in a

structured instrument where you're

giving them a capital gain over time a

convertible instrument but you could

just Target 25% of Bitcoin and I'll give

you 15 15 or maybe I'll give you 15 AR

five vol and people would lose their

minds right because that's like 3x the

sharp ratio of the S&P so you can create

that you can create 3030 you can

basically give I'm going to give you

half Bitcoin I'm gonna take the other

I'm GNA take half of the performance and

I'm going to take half I'm going to take

all the volatility away and half the

performance and I'll give you the other

half do you want as a coupon or do you

want it in a conversion and then I can

give you 75% of it

um and then I can give you you know so

when we did that convert well we did a

convertible Bond at zero coupon up 55

but it's um it's a 144a offering so it's

an O it's something you sell to

qualified institutional buyers but you

can't sell it to retail and it doesn't

trade like on a four-letter ticker right

so that that's a market and a pool of

capital but there are all these other

pools of capital right so if you sell

something which is just the same

performance as the S&P but less risky I

mean how big is that pool of capital

massive Market or I'll give you another

idea what if I gave you the performance

of the ETFs with downside protection

what if I give you the upside of Bitcoin

but no downside that sounds pretty good

doesn't it yeah that's what our bonds do

our bonds are actually more than the

performance like convertible bonds and

micro strategy are more than the

performance Bitcoin more than the

performance of Bitcoin

but with the downside protection they're

a bond and so if you think about that

the thing an operating company can do is

we can strip the volatility strip the

performance strip the risk we can embed

something the senior 10% tranch of the

capital structure and we spit out one

type of

returns but by the way some people hate

volatility right the mainstream normies

yeah they do they hate it yeah

but if you go to

Susana and you said we're going to strip

the volatility from micro micro strategy

we wouldn't have a hundred billion doll

95 billion open interest do you know you

know what happens when you strip the

volatility from a company our size I

know because

I I have another company that I started

and the other company is twice as big as

micro strategy and revenue and twice as

big in EIT dah and it's

well-run and it's it's just a great

company the open interest is $5 million

wow we're

98 billion as I'm speaking to right now

so stripping the volatility out of the

business is like uh spraying the fire

with a fire extinguisher or literally

you're not pouring gas on the flame

you're you're pouring water on the flame

and

tionally right whereas what we're doing

is pouring gasoline on the flame if you

ever study a you know study an internal

combustion engine and look at how it

works the point is to channel and you

know and compress you know

supercharge the supercharge turbocharge

the fire and direct it not put it out

right right so so there's a big Market a

$300 trillion market for you know fixed

income coupon generating principal

protected low volatility instruments

there's another massive market100

trillion do market for Equity like SNP

spy Vanguard 500

QQQ that kind of in something that gives

you 15 just beat the S&P performance and

if you beat the and if you do it with

less ball or less risk then why don't I

just give you trillions of that so

there's that market

then there's the Bitcoin Market which is

I'll take I I want Bitcoin upside and of

course there's 100 billion dollars now I

guess in that market right now but you

know at micro strategy and then there's

a convertible

arbitragers right and the convertible

arbitragers they're like I'm going to

buy 50 million of your of your paper I'm

going to short 40 million or 35 million

of your stock and then as the stock

moves around I'm going to adjust the

short right and I'm extracting that

premium

risk-free and that's their thing and

that's what they do when I meet with

them by the way I'm like you know I see

you I see you guys every you know few

weeks or every quarter nice to see you

again by the way that thing that you

shorted tripled like my advice what I

say to them they don't take my advice

nobody it's okay nobody no it it's okay

now everybody's got to do their thing

the shorts got to be short the Long's

got to be long the Traders got got to

trade right the haters got to hate the

Maxis are going to Maxi everybody's

going to do their thing that's fine but

what I say to them is you know this is

bit this is like 75% Bitcoin upside

actually it's it's like 70% micro

strategy upside it's 100% Bitcoin upside

no downside right like that is to say a

Bitcoin crashed 90% tomorrow you're

still getting

paid the could go about 95% tomorrow and

stay there for five years you're still

getting paid it's like why are you

you're already hedged you're already 10x

over

collateralized why are you hedging it

again yeah it's interesting right and

but there are some people that do they

double hedge it so there's a group of

people that buy that convert and they

they just buy the convert they're

already hedged and they outperform

Bitcoin without the risk there's other

people that by way that's one type of

view there are other people they don't

want to take the risk for an

hour like literally the afternoon

they're buying the bond there I mean

when the Stock's moving around they're

buying 50 million shorting 40 million

minute by minute they don't even want to

take an afternoon of risk but that's

okay so I think that it's a long-winded

answer to your question but it's we're

just going to provide Securities to to

every pool of Capital if if what you

want is that instrument if we think it's

good for our common stock shareholders

we'll sell it I mean ultimately there's

a lot of instruments we could create

that are kind of dilutive to us so we're

not going to but you know there's the

dude that wants investment grade fixed

income guaranteed coupon 10x over

collateralize with a bit of boost past

that we're going to give them their

thing there's someone else that wants

20% coupon yield you know outperform

private credit and they want lots of

cash we'll give them their thing there's

somebody else that wants Bitcoin upside

but they want principal protection and

less volatility and we'll give them

their thing right and as we do each of

those things there's a certain uh

economic spread that we capture and when

we're doing it for example if if I sell

a fixed income instrument deep in the

capital structure and 10 10x over

collateralized I have $40 billion of

capital and I sell a billion or two

billion dollars of this senior strip and

I give you I give you

25% of the gain of

Bitcoin okay when you work that out in

your head you realize at a minimum 75%

of the economics goes to the common

stock right but it's better than that

because we also get the float yep but

it's better than that because we also

get the volatility yeah so most people

don't have the math but if you're a

Quant right model the value of selling a

fixed income instrument where what I

gave you was a guaranteed coupon and I

gave you over collateralization and

principal security but in return I took

the float I took the ball FR I'm getting

a billion dollars from you and it's

going to trade with a 60 ball right

anybody you it's like a billion dollar

flywheel spending 60 RPM there's energy

in it right yeah so when I get the

billion dollars and and it's spending 60

vol

I can probably sell the volatility for a

100 million a year right so you hand

yeah you hand it to me absolutely I'm

making a 100 million a year holding it

then it's going up 30 to 60% I'm getting

that yeah and then I've also got another

float which is another intangible I'm

holding the capital in the Fiat economy

and that provides collateral for

something else when you put it all

together that means that really the C

the spread is like 85% 80 880 it could

be easily 80 to 85% yeah okay well that

means you sell 10 billion doar of that

instrument you capture eight to eight

and a half billion dollars of

Bitcoin that that you stack on top of

your existing Equity that's the leverage

and the common okay so so the strategy

we pursue is we strip away the risk and

the volatility of the people that hate

it and we just give them something which

is just better than everything else

right it's better than all the bank

preferreds and it's better than all the

real estate preferreds and it's better

than corporate investment grades and

it's better than junk and it's better

than private credit and it's better than

you know better than the S&P it might be

better than a Bitcoin ETF we just give

you something how much better 20% better

30%

better but but then we keep the rest and

the rest goes into

MST MST then does one and a you know our

Target was 1 and a2x Bitcoin but the

truth is we got the 2x yeah so it's just

and then all of that compounds on itself

and well when we're running at 2x

Bitcoin and 2x VA like we have a vault

Bitcoin ball is is 60 we're 120

140 plug that into black

shs right what that means by the way is

if you sell the if you look at the call

rate if I sell a an at the market call

30 days out on ibit you generate 100%

interest if you sell the same call 30

days out on mstr you generate

220% and it's insane that is insane 200%

right you sell that same call on

spy

15% right and then you go and try to

sell that call on B and D on the bond or

on vnq the real estate or on gold good

luck right there's no Mark like there's

no Vault there's no Market nobody wants

to even make a market in that right and

you basically hold the dollar okay well

you get 30 days suur you get

480 basis points so so us Levering our

our permanent Capital gets us to more V

and then the UNC the fact that we're an

operating company means I can sell

Equity at a premium but I don't have to

I can do a convertible Bond but I don't

have to I can issue preferred I don't

have to right you don't know what we're

going to do we could buy our stock back

we don't have to so the uncertainty plus

the permanent capital P the plus the the

There's No Redemption right like right

right like you know black rock or

someone else I envy them because they

have more Capital but it's it's

overnight deposits right okay so you

could have what would you rather have a

hundred billion dollars in overnight

deposits in your bank or $50

billion that you have forever that no

one gets back right so we have the

permanent capital

we can lever it we have the option to

lever it the combination of those things

means that we would even if we weren't

levered I think we would trade at

130% of Bitcoin ball yeah because just

of the uncertainty right but when you

layer a little bit of Leverage on top

maybe you get to to 2X and maybe you

could get to more than twox you might

get to 3x if you do that gives you all

this not no pun tenant all this

optionality right you mean okay and now

we're back to the turbocharger the

supercharger right what we do is we

compress this Capital we put leverage on

it and then we feed it right back into

the engine because we we can issue

convertible bonds that are actually

boosted by MST right that's how the bond

the bond could be half you know we could

sell a bond theoretically that zero

coupon up 100 right and if mstr is 2x

Bitcoin the bond is 1x Bitcoin coin

right but the bond is still got

theoretically 50 to

65% spread in it or economic boost to

the common stock so if you understand

the float to spread the volatility when

you when you plug everything into

everything we basically use the common

to go back even we could use the common

to pay the Cash coupon to pay a cash

dividend but when we're paying the cash

dividend we wouldn't be paying

6% in cash we would be raising the cash

by selling equity which is valued three

to four to five to 10x the underlying

assets so our effective cost of capital

isn't six it's two yeah or one right and

then you're like well where's the

premium comp from because we're actually

getting an 80% boost on the Strip that

we sold the fixed income and we're

feeding it back into the common so we're

in the business of creating this Capital

amplifier y triple amplifier you know

we're we're boosting The Leverage on the

common we're we're boosting the return

on all of these other instruments

because we're using the common and then

we're feeding it back into the Bitcoin

Network which is driving up the price of

Bitcoin right you know which is helping

everybody

else which is bringing more companies so

so it's a very virtuous cycle with about

three or four very powerful positive

feedback loops that are all engineered

yeah and then one last point which

is you you got to be 100%

Bitcoin like the reason we can do

it is because we are we are $40 billion

of Bitcoin

Capital 60 or $50 million of USD MH and

nothing yeah of anything else no real

estate right no other coin no other no

other good idea the thing that I try to

get across to people with the laser eyes

and the focus is is sometimes the least

risky thing is not to diversify right

when you've got an engineering solution

when you're building an airplane and

someone says aluminum is the right metal

diversifying into copper bronze steel

and aluminum doesn't make the plane less

risky right right if the you don't need

it's it's not like this everybody's got

to have their turn we got to we got to

like use a little bit of Art and a

little bit of real estate and a little

bit of gold a little bit of Bitcoin and

a little bit of what Nvidia stock right

it's that doesn't work it breaks the

machine right it's the homogeneity of

the of the fuel right we don't put 16

different types of radioactive elements

into the you know yeah pick the thing

engineer the reactor for the thing you

know you put dirty fuel into the into

the yacht the engine fouls you put dirty

gasoline into the car it fouls right so

you have to engineer the reactor in the

right way and it's you know it's like

the austrians would say about money any

amount will do

you just have to

pick the money right right right bu

metalism silver and gold is a recipe to

disaster yeah pick one focus on it so

what we've done is we've focused on

bitcoin we've created a Bitcoin treasury

company it's a crypto Reactor with

Bitcoin is the fuel because we do that

we can give our converts the highest

performance of any convertible bonds and

we can give our f fixed income the

highest performance of any fixed income

and we can give homogeneous credit and

transparency and here's the other point

I make a lot of times people come and

they're like I want to do the Bitcoin

standard thing but but I think I should

I'm GNA hedge I'm gonna I'm gonna put in

this put hedge thing or maybe I should

do some of this and some of that you

know I'm like no that's not the engine

no yeah no don't you know you don't

hedge you don't want to

be 72% Bitcoin with 30% Hedges on to

generate guarantee

yield you want to be

150% Bitcoin no Hedges on but but but

yeah because you're robbing the investor

of their opportunity when you put your

Hedges on there's a there's a concept in

System Dynamics and political economy

the shifting of the burden to the

intervener yeah okay it's like because

you you chose to do it I don't have to

okay so when I give you a

150%

Bitcoin company and I don't hedge it and

I tell you I'm not going to hedge it you

don't believe me for a while you're

going to you're going to rug pull me

you're going to take profits you're

going to right it takes a long time for

people to trust you right but your best

chance to get people to trust you is if

you're laser like focused and committed

and transparent and you never break

Faith with them they're like this is by

the way this is tough love when Bitcoin

trades down 80% and you wanted me to

bail out I didn't I'm sorry you know all

those Bond holders they came to me when

when the bonds the bonds were trading 30

cents and 40 and they wanted me to issue

Equity to buy them back

back said no we're keeping our position

they said well this is a big opportunity

for you you could buy these bonds back

below par I said no this is a big

opportunity for

you you're the convertible Bond investor

you have to buy bonds with your capital

for a living that's your opportunity my

job is to issue the Securities and stay

and stay long Bitcoin buy Bitcoin hold

the Bitcoin manage the structure don't

get liquidated that's my job your job is

to buy the equity or if you don't want

to buy the equity buy the bonds the

short story is the bonds went from 30 to

300 right like they were they were

screaming home runs the most lucrative

thing you could have done the simplest

most brainless thing imaginable was at

the bottom of the crypto winter you

could have bought all of these micro

strategy convertible bonds at 50% 60%

below par they were and the joke of

course is they were guaranteed to pay at

par right I was like I would have bought

them guys if my lawyers would let me buy

these I would have bought them they were

guaranteed to pay off right and yet what

you the only thing you had to know to

make that money was you just had to do

the research and figure out the Bitcoin

was something real once you figured that

out it was very

straightforward so coming back to this

point it's when you hedge and when and

when you're

heterogeneous you rob the rest of the

market of their opportunity the

opportunity for the convertible

Arbitrage is they get to ARB that

instrument the options Traders get to

trade the options the the haters get to

short and they get a great short

opportunity the guys that are long get

to go long the degenerate Traders they

get their thing everybody can go take

their Bloomberg and they build a little

model and like you know well the the the

$800 call strikes two years out are

mispriced versus the one year out $700

call strikes I'm going to sell one and

buy the other one and lock the

difference yeah everybody's got to have

their thing and so the point is if

you're thinking as a public company that

you're going to take a Bloomberg and

trade you're a fool

because what you can do that they can't

do buy Bitcoin hold the Bitcoin issue

the Securities that they need you to do

that Y and what they what they can do is

is Buy trade Arbitrage short go long and

you want them to do that so when you

start to to move into the territory of

your partners and you take their

opportunity like like if if I was like

could you imagine if I put on a press

release yeah bitcoin's zoomed above

100,000 we decided to take money off the

table we locked in our

gains everybody would go ballistic yeah

yeah and then they would never trust us

ever again yeah I mean for all of those

people and I'm like you don't understand

like the world doesn't give a they don't

care that you're the world's most

brilliant Trader and you do like 187

opaque things to make a billion dollars

if you show me a hedge fund that makes a

billion dollars in an opaque way I don't

want to invest a dime in

you like not not like what how would I

Val I'm not going to why would I you're

like some smart guy that makes some

money in a way I don't know how but

maybe you won't next year good for you

but I don't I can't bet on that yeah I

would rather invest in a guy that loses

a billion dollars in a way that I

understand it's like oh Bitcoin traded

down five ,000 oh yeah you just lost a

billion do you know Bitcoin when Bitcoin

moves like 2 ,500 down we lose a billion

yeah but now I can go you know I go buy

that yeah and you and everyone knows

exactly why yeah it's like the world's

got infinite Capital they want they want

the security so the real key here if

you're running a public company is pick

a strategy solve a problem for the

market be consistent reliable

trustworthy and you know if the market

move trades down

90% you know the most lucrative trade in

the world was like to buy micro strategy

stock at the bottom of the crypto winter

right yeah absolutely right I mean I

think our stock got down to $13 a share

1 you know not that long ago $13 a share

you're up over 400 right now yeah and so

and so for us to unwind the trade would

have

Unwound like I think

literally it's a98 billion

mistake yeah to basically Flinch yeah at

the bottom of the market and by the way

it never occurred to me like why would

we had a strategy of course I'm not

going to it's just the conventional rest

of the world they were all asking they

were like you definitely should I'm like

you guys out of your mind I saw stories

that were like Michael sailor bet big on

bitcoin and lost I think it was like a

four was the headline in the wall yeah

it's like um let me ask you Michael you

talked about other companies you you I

was um I was at your Bitcoin for

Corporation conference in Las Vegas

early earlier this year yeah um you gave

a great presentation there you just gave

a presentation to the Microsoft board of

directors uh which had a lot of the

slides from your uh talk in Las Vegas um

they have like 80 billion in cash on

their balance sheet like you're talking

about not how it's not efficient it

messes up the engine if you in in this

pot whether it's your operating business

or on your balance you have all this

other stuff of course they have a lot of

stuff what's the pitch exact like

broadly speaking for an operating

company not for a a micro strategy or

metap planet where where it's a Bitcoin

engine company at this point but for

like a Microsoft like like should they

be doing 2% like or should they be

plowing a lot more in right I mean I've

seen this the talk I think 2% is silly I

think I think traditional financial

advisors that want to talk work Bitcoin

into their talk script so they sound

cool and adding one or two can improve

the sharp and what that's buying an

insurance

policy right that's like me pitching you

on life insurance just in case I I mean

it's not a way to live it's not a you

know you're not going to you know live

joyfully forever and put your family you

know you're not going to provide

generational wealth for your family and

put your kids through college and get a

yacht and a third vacation yeah home and

be universally idolized because you

bought flood

insurance right so uh yeah I'm not

against buying insurance or auto

insurance I just think think uh not that

interesting um here's my view on

Microsoft and this the same for pretty

much every company certainly The

Magnificent Seven you have a good

company you're generating cash flow a

lot of cash investors invested their

money in you so now your choice is you

can invest in the core business to grow

the business you can but but let's

assume you're investing as much as you

can come up with and then the cash flow

you've got that's excess you just don't

know how to grow the p&l anymore well

then you either hold it as Bonds on your

balance sheet you pay it out as a

dividend you buy your stock back or you

go and you do a merger and you pay cash

for the

merger and so we tick those off uh doing

mergers and Acquisitions 90% to 95%

failure rate right I mean HP did a

disastrous acquisition I mean the number

of disastrous Acquisitions where the

companies overvalued by 2 to 10 yeah

most like to if I were to say 5% of the

Acquisitions are

successful

economically I think I might be

overstating the case but I'd be very

optimistic but I I'm sure 90 to 95% are

um a disaster and you don't really know

whether they're a disaster for like

three two to four years so you can

embark on that course which is

statistically you know a bad outcome and

it's a slow outcome it's costly just to

effect and how how many of these big

mergers they're still fighting uh in

litigation over the merger to get

approval or whatever a year after they

announce it it takes forever it's very

dilutive it's

distracting and most of the time it