Michael Saylor, The Bitcoin Strategy for a New Financial System, Economic Club of Miami

Welcome, welcome here to the Moore

building and for our uh winter event for

our holiday holiday event. Um I'd like

to uh my name is Jeremy Schwarz. I'm the

board chair for the Economic Club of

Miami and one of the C co-founders. I I

just want to extend to all of you a a

warm and generous uh thank you for

joining and for being part of this club.

Um when people talk about what it really

makes up the Miami miracle, well, you

guys are it. You really make Miami uh

what it is. It's the people, the talent,

the energy. So, we're very grateful for

you joining us tonight. Um, we're also

grateful for all of our partners and

we're of course very grateful to our

speaker Michael Sailor for joining us uh

for an important discussion. Uh,

again, obviously in the holiday spirit,

we have Hanukkah and Christmas coming

up. Um, so this is especially

appropriate now. Um 2026 offers to be a

very exciting year and so we thought

this would be a wonderful event for all

of you to listen to what Michael has to

say to ask questions and for all of us

to learn to grow and to exchange ideas

with one another. So a big thank you for

all of your gracious uh hosting and

presence. And uh just so you know um

this area we still have access um back

over in the uh the bar area and

obviously at the other uh entry points.

I would like to turn this over to our

executive director and a dynamo in the

social media space Francisco Gonzalez to

sort of run this out. Okay.

>> Thank you Jeremy. And thank you Jeremy

for uh having the great idea to be one

of the co-founders of this club four

years ago. Uh putting Miami even more on

the map globally. Um so yes, as you

mentioned, I'm Francisco Gonzalez,

executive director of the Economic Club

of Miami. Um we've really been growing

like crazy as you can see. Um you know,

we just can't even fit people in the

room anymore. We're going to have to get

bigger rooms. Um but I did want to make

a mention. We're now we now have over

340 active members of the Economic Club

of Miami.

And there's many people here tonight

that this is their first um event as a

member. So if that's you, I'd like you

to please stand. And I know there's some

already standing, but thank you.

Well, welcome.

>> Okay, now down in front from the

cameras. Um also uh yeah we have just a

great event tonight and it wouldn't be

possible again without the support of

our members but also uh some of our

sponsors. Uh so first uh we have an

amazing sponsor host of of this place

here of Oshaka Mama here at the Moore

and that is William Seing and I'm going

to bring up William to give you a nice

welcome as well.

>> Hi how are you? Uh welcome to the more

building. Um, our objective here is to

build a platform for entrepreneurship,

a plat a platform for Miami to compete

against the big cities of the world that

are Dubai, Abu Dhabi, New York, etc. I

think that we're doing an amazing job. I

think that we have a bright future and I

like I always say, it's time to shine.

Time to shine for Miami. So, thank you

for coming. Thank you, Michael and um,

uh, Francisco. We have been

collaborating with the economics club

for a long time. It's a great community

and enjoy the evening and welcome to the

more building.

>> Thank you, William. Again, thank you

again for supporting this event. Um, so

now I also want to say thank you to one

of our members, Craig O Sullivan, who's

up here. And Craig will be uh will be

interviewing um our featured guest

tonight, Michael Sailor, who probably

doesn't need any introduction, but I'm

going to do so anyway. Um, we do have

people on YouTube eventually. So, um,

Michael Sailor is an American

entrepreneur, executive inventor,

author, and philanthropist. He's the

founder and executive chairman of

Strategy, a publicly traded business

intelligence firm that he founded in

1989. Dang, I think there I was playing

Nintendo then. Um,

and it wasn't connected to the internet,

whatever that one is. uh which holds 3%

of the total 21 million Bitcoin supply,

making it one of the top five global

investors in Bitcoin. Uh Michael's also

become one of the biggest ambassadors of

Bitcoin on the planet. He's also the

founder of Alarm.com, named inventor um

uh on 80, I'm sorry, on 48 plus patents.

We'll get you to 80 soon. And author of

the book The Mobile Wave. He founded the

Sailor Academy, a nonprofit that has

provided free education to over two

million students. He's an advocate for

the Bitcoin Standard. Uh you can find

that at hope.com with dual degrees from

MIT in aerospace engineering and history

of science. Um he posts his views on

Xailor s a y l and his website

michael.com. His four-hour interview

with Lex Freriedman summarizes his

thoughts on Bitcoin inflation and the

future of money with 11 million views on

YouTube. We'll try to get you a few more

views tonight. And now I'll turn it over

to Craig Sullivan. I agree. Thanks,

Francisco. Well, welcome to the Economic

Club of Miami, Michael. We're delighted

to have you. I know this has been a long

time coming, but um we're definitely

appreciative of your time and the fact

that you're willing to meet us here in

this rather small and intimate setting.

Certainly, you're used to to the larger

conferences, so we appreciate your

versatility. So, on Friday, NASDAQ

announced that MSTR would remain in the

benchmark NASDAQ 100 index. So,

congratulations on that news. Your

response on X was that Bitcoin hoarding

will continue until the the complaining

stops.

Can you uh explain um a little bit of

the backdrop on on why you posted that?

Uh there was just a a snarky headline in

Reuters where they said Bitcoin hoarder

strategy remains in the NASDAQ 100 and

it was like fake news because there was

never any intention of removing us from

the NASDAQ 100 and it's kind of like a

it's a backwards kind of insult to

suggest that the company just hoards

something and

>> just reminds me of uh of uh you know the

what is the insult of of people doing

anything intelligent that you don't

understand you just call them hoarders

like the people that hoard food when

everybody else is starving to death or

whatever they think you might need it

but uh yeah we're not a hoarder what

we're what we are capitalists so so the

the most fundamental premise is Bitcoin

is digital capital and uh a lot of the

traditional finance establishment

doesn't understand capital and so they

don't recognize a capital asset when and

they see it. So, we're acquiring Bitcoin

as capital the same way that you might

acquire 3% of Manhattan.

So, say you believed in Manhattan and

you go and you buy up 3% of all the raw

land in Manhattan, right? They would

call you a Manhattan real estate

hoarder. But it was never our intention

to hoard the real estate in Manhattan.

It was the intention of people that

bought at Manhattan to develop a great

city. And eventually you build buildings

on that real estate and the buildings

have cash flows and that those are

credit instruments. So our company uh

believes Bitcoin is cyber Manhattan,

right? It's a place that one day

everybody on earth will want to put some

of their money. We think it's the

greatest city in cyerspace. It's the

greatest digital property. Um just like

if you go to Manhattan, you ask people

that live in Manhattan, they think that

their city is the greatest city not just

in America. They think they think it's

the greatest city on earth. And people

have been buying Manhattan real estate

since

1650

every decade for 300 years and they keep

paying more than the previous decade

paid. And it's never been a bad idea to

buy Manhattan because it is the greatest

city. So uh but no one ever called a

Manhattan real estate developer a land

hoarder. I don't think uh maybe they

did. I don't know. But but uh you know

we think that Bitcoin represents the

apex human the apex property of the

human race digital property and um and

our our

rationale is

if it is the apex property in cyerspace

it rec it represents economic spectrum.

It's like um you know once upon a time

people bought up all of the radio

broadcast rights over the United States

and yeah you might have called them you

know spectrum hoarders but you know

without the spectrum there would be no

AT&T or Verizon you can't have mobile

phones so you need the spectrum and so

we view Bitcoin as like economic

spectrum

uh and uh we think it's just going to

get more scarce and more valuable over

time because there's a lot money in the

world. And as people want to move their

money in cyerspace, either through

cyberspace or into cyerspace, they're

going to want to buy up that spectrum.

And so our company's been accumulating

it uh with an eye toward developing it.

And there are a lot of ways to develop

capital. If you if you had $50 billion

of capital, you could use it to launch a

commodities exchange. You could trade

derivatives. You could use it to

underwrite insurance. Insurance

companies have capital. You could turn

it into a bank and you could use it to

buy consumer loans or you could buy

commercial loans. We have chosen to use

it to create and sell credit.

Another way to say it, you've heard of

annuity companies, companies that

actually create annuities. You can buy

an annuity, they'll pay you 7% or 8% or

6%. We're in we're in essence creating

annuities. And uh the most famous one is

STRC and it basically is a digital

credit instrument that right now pays

10.75%

dividend yield monthly in cash.

And the way we do it is we invest that

capital into into Bitcoin which is

appreciating faster and we scrape off

the first 10.75%.

We pass it through the credit investors

and because our we are the capital

investors we hold the capital. We take

the long view. And if you have enough

capital and you have a long enough view,

you can strip the volatility and the

risk off of the instrument and off of

the credit investor.

80 or 90% less risk, 80 or 90% less

volatility and you can extract the

dividend or or or the annuity stream

they want. The remainder goes to the

equity investor. And you know, generally

if you were in the business of creating

annuities for people, you wouldn't just

call a company a Bitcoin hoarder, right?

Any more than you call, you know, the

related company a land hoarder. That's

not what they do, right? Where they're

creating buildings for people to live

in. And

>> but you're a hobbit for sure.

>> Yeah. Um uh we're just believers. Again,

just like if you ever met someone in

Manhattan, you ask them if they're ever

going to sell their apartment, they're

like, "For sell it for what?"

Like literally, people that have a nice

piece of real estate in Manhattan will

say, "I'm giving it to my to my heirs."

And they'll give it to their heirs.

It'll be in the family for the next

hundred years because every place on

earth is a step down. And all you got to

do is go talk to someone that's a big

New Yorker. You'll hear that over and

over again. So our view is, yeah, this

is the apex property, so we're going to

develop it and we're going to enhance it

over time, but no, we're not really

looking to sell.

>> So today you announced another

acquisition, another purchase. I think

it was about 10,600 Bitcoin.

And

when you announced on a Monday though,

that doesn't mean you that you bought it

Monday. That means it could have been

from the last week or so. Correct. Yeah,

we we normally announce those things uh

over the course of a week. So on Monday

morning we'll announce what we did in

the previous week. This week we

announced, you know, something like what

960 million worth of purchases, but a

week ago we also announced about 950 or

960 million purchases. So about a

billion a week for the past two weeks.

So this this announcement was everything

we did Monday through Friday of last

week.

So, what factors do you consider when

making these purchases?

>> Um, we buy Bitcoin whenever we have

money.

>> I I would say tongue and cheek, I only

buy Bitcoin with the money you can't

afford to lose. So, uh, this is the 90th

purchase. And, uh, and so we've done it

90 times. Uh, it's a very simple way to

think of it. So, Bitcoin's been going up

about 45% a year for the past uh five

years.

I expect it to go up 30% on average for

the next 20 years. It was going up 80%

on average 5 years ago. So, it's

decelerating from 80 to 70 to 60 to 50

to 40. And it should continue to

decelerate, you know, towards something

like 1.5x the S&P.

And so that's it's not hard to get to a

forecast of about 30% over over 20

years. But that being the case, the way

I think about Bitcoin is it's a digital

monopoly on capital. It's the world

reserve capital Network that's growing

30% a year that you can purchase at one

times revenue. So if you're the CEO of a

company and I came to you and said, I

have a monopoly that's growing 30% a

year for the next 20 years and you can

buy it at one times revenue. The

question is, would you do the deal? And

of course, the answer is everybody would

do the deal. Right? If anybody ever

said, I have a company growing 30% a

year for the next 20 years, and they'll

sell themselves to you at one times

revenue. You're like, well, why are they

so stupid? Like, no one's ever that

stupid. The last time Google bought a

high growth company, they paid 27 times,

30 times revenue, 10 times revenue.

Normally, you pay 10, 20, 30 times

revenue for a high growth company. So a

high growth company that'll sell itself

at one times revenue is pretty

extraordinary deal. Now for us though

it's a much simpler decision. It's not

just a monopoly growing 30% a year for

the next 20 years that we can grow buy

at one times revenue. We can buy it

risk-f free. Okay. Well, why can I buy

it risk- free?

Because my company is constructed uh for

Bitcoin maximalist. The only people that

buy my equity are people that believe

Bitcoin is going to win and is going to

grow 30% a year. If you didn't think

Bitcoin was going to grow faster than

the S&P index, there's no way you would

buy MSTR.

Okay? If you thought, you know, that

might have been a debate back in 2020,

but but after the company bought Bitcoin

89 times in a row, if you're still

holding the equity, you have to believe

in Bitcoin. So when when we buy Bitcoin,

we've already stripped the existential

risk off of the investment. You know,

what matters is not whether anybody else

in the world thinks Bitcoin is risky.

What matters is do my equity investors

think Bitcoin is risky. And so I'm doing

an acquisition which is by definition a

creative without risk and I'm getting

the deal at one times revenue, right?

and and we're we're creating a very

transparent credit profile, a very

transparent performance profile, and

that means that our hurdle rate is 30%

risk-free.

So, you know, any if you were to pitch

me anything, if you said I have the best

startup idea ever, I guarantee you 40% a

year for the next decade, I would think

that's not as good as the deal I have

buying Bitcoin. You could promise me 50%

a year for the next 20 years. we

wouldn't do the deal because I would

have to convince a hundred outside

equity investors that your deal is

better than Bitcoin and I wouldn't be

able to convince them. Number one, but

number two, it would be a dilutive

distraction. So, we have a very simple

business model. It's just we just buy

Bitcoin. We expect 30%. We know it'll be

volatile. It'll be 30% with 30 V over 20

years. And right now it's 4050 V. And um

and if you have the ability to just keep

doing the same trade over and over

again, it makes sense. You could think

of it as, you know, maybe one of the the

all-time great rollups

where you're just rolling up uh you

know, a a digital asset with a limited

supply

and every time you buy a bit more,

there's that much less supply in the

market. The scarcity goes up. the risk

doesn't go up because let's face it, if

Bitcoin goes to zero tomorrow, it

doesn't matter whether I own 1% of it or

2% or 3% of it or half a percent of it.

It's it's irrelevant, right? I mean,

it's kind of like back to back to the

Manhattan example. If you've decided you

believe in Manhattan and you bought 1%

of Manhattan, you might as well buy two

or four because if Manhattan sinks under

the ocean, you're going to be bankrupt

regardless, right? there's nothing you

can do if Manhattan sinks, you know,

beneath the earth. But, you know, once

you've accepted that as the system

systemic existential risk and your

opinion is Manhattan is not sinking

beneath the ocean, then you know, you've

already got a basis, you know, in the

city. You've already managed the rest

and and the least risky, most decreative

thing you can do is just continue on

your strategy.

At the Caner Crypto Conference held here

in Miami last month, you mentioned that

there are two important days in

everyone's life. The day they're born

and the day they realize why they're

here. When did you uh determine your

calling and how are you certain that it

was your existential purpose?

You know what's interesting is what you

discovered Bitcoin during the COVID

lockdowns when the world turned upside

down and uh interest rates went to zero.

And I would liken it to say you own $500

million of real estate in a city and and

there was a pandemic and the mayor took

over and the mayor decided to reduce all

rents to zero forever for the public

good and then just sent you a memo

saying we expect you to accept zero

rents on your building forever because

otherwise you're a bad citizen.

And if if that happened to you and if

the building was still worth 500

million, you might think, I'm going to

sell the building and move to another

city where I get respected a bit more

because this is offensive, right? Or or

you could stay in the city and accept

zero forever and go bankrupt

>> and then people will just ridicule you

uh for being stupid and you went

bankrupt and you probably deserved it.

So we got to that point and I thought,

well, you know, the cost of capital went

to zero. the Jerome Pal literally said,

"We're lowering interest rates to zero.

I'm not even thinking about thinking

about raising interest rates for four

years." Like you go see the press

conference. So at that point, I had 500

million. And I thought, it's either a

fast death or a slow death or we're

going to have to move, take a risk.

We're going to have to transform oursel

uh and fight our way out of this. So we

decided to take our 500 million and buy

something that where it wasn't rent

controlled to zero. And we started

looking for a capital asset that was not

already highly appreciated. And what I

wanted was something like gold, a cross

between gold and a monopoly

on uh a digital monopoly. So I wanted

like the Facebook of of money or I

wanted Google for money or Microsoft for

money. the the best investment ideas

have been these um the fang stocks now

mag seven stocks but fang Google Apple

Facebook Amazon I thought can I actually

buy a digital monopoly

on capital and and Bitcoin looked like

the best aspects of Google or Apple and

it looked like the best aspects of gold

and non you know a non-s sovereign store

of value bearer instrument and I thought

I kind of like the idea that of you have

portable capital you I give you a

billion dollar. I drop you in Africa and

I say, "Buy anything you want. You got

to hold it for 30 years." There's not a

single thing you would buy in Africa.

Not a company, not an index, not a

credit instrument, not a currency,

nothing. And you wouldn't buy a billion

of gold because they wouldn't let you

out of Africa. They'd steal the gold,

right? And and so the issue is what are

you going to buy where you need to move

the capital asset, right? In the Middle

Ages of the Renaissance, people bought

uh art. you know, they bought very very

valuable art from the Italian masters

and uh and they bought it so they could

run for their life when they had to flee

the city state when they were the

minority. Uh so the the struggle for

portable property goes back, you know,

thousands and thousands of years. It's

always been a human problem. So we

thought, you know, Bitcoin looks like

portable property, but it was digital.

And if it's did, you know, if I if I had

gold and I and gold was like portable

capital for thousands of years, like

everybody agreed that gold was capital

for thousands of years. Even people that

wanted to kill each other and hate each

other and they couldn't agree on

anything else, they could agree that

they wanted to kill you for your gold,

which by the way is it's a big deal

because, you know, in South America when

the Spaniards show up, you know, the

Aztecs thing because they didn't

actually think of gold was money. the

Spaniards did and they brought the gold

back to Europe where everybody the

Spaniards wanted to kill also agreed it

was money. And so it was a big deal that

people agreed the gold was money. But if

you if you had a genie and three wishes

and you said, "How do you make gold

better?" You would say, "Well, you know,

first I want to make it impossible to

mine any more gold and cap it at 21

million gold coins." And then you would

say, "I want it to be weightless,

invisible, and I want to be able to

teleport it." And then the third ask

would be I want to make it programmable

so the billion AIs can transform it a

billion times an hour and send it to

another billion computers and I can put

it on 8 billion iPhones and Android

phones because because that way

everybody is going to have this uh

powerful thing and maybe it'll you know

maybe it'll transform itself in 3700

iterations over the weekend and make you

a lot of money. That's not going to

happen with gold. It's not going to

happen with real estate. It's not going

to happen with soybeans. It's not going

to happen with art. It's not going to

happen with with uh credit portfolios

and security portfolios. So, I thought,

you know, digital a digital monopoly on

capital asset. We're going to take our

500 million. We're going to buy it.

And uh it was first

first we were uh I would say it was out

of desperation and frustration.

It's like someone told you you're going

to die and you're like, "Okay, I guess I

will flee for my life with whatever I

can take." And then it became

opportunistic because the stock tripled,

volatility went through the roof, and we

could borrow money for free. And if

someone were to give you a billion

dollars for free for five years to, you

know, invest in your business, would you

take the money?

>> Yeah. I was like, after we were just

about to go, you know, out of business

six months earlier, we thought, okay,

now someone's going to give us a billion

dollars for free. We're going to go buy

Bitcoin with this money. So then we

became the biggest issue of convertible

bonds in the world. and and uh we issued

like you know 101 12 billion dollars of

them and we worked that but but

ultimately uh I would say that was the

opportunistic phase and and in that

phase the product was the equity and

then the tactic was the credit

but we went through these iterations

challenge and response and necessity is

the mother of invention and so when we

we barred senior debt we had IBID doc

covenants that choked us to death and so

we couldn't do that anymore and then we

did asset back finance ing where we

pledged the bitcoin and then the bank

failed and the bitcoin crashed and that

created hysteria so we couldn't do that

anymore. So then we did the $10 billion

convertible bonds and then we maxed out

the convertible bond market and uh all

the convertible bond buyers ran out of

money and they literally didn't have any

more money. We' just taken you know too

much of the market and uh along the way

I learned a lot. I got a PhD in leverage

and what I learned

I became very you know when when you

borrow money and your bank fails you

know you you learn a lot um by the way

it's much better that way than if you

get margin called by a bank that's

collapsed that's much better than

getting margin called when the bank is

healthy because we got to buy the loan

back at a big discount

but um

but I became very disenchanted with uh

corporate bonds and 144A offerings. For

those of you who don't know much about

it, a 144A offering is an

over-the-counter bond issue when you

sell it to a bunch of institutions. And

it's a really fancy term and they make

it sound good, but here's what it is.

It's like one dude in a back alley

trading between 37 guys baseball cards.

It's an awful market. Okay, so

over-the-counter bonds mean yeah, you

you can sell 500 million of bonds.

They're are liquid. the bid ass spread

is 3% and they trade 30% cheaper than

their fair value. And so I learned I

didn't know anything about this before I

got started, but we worked our way

through and I just realized that that

you're not going to grow the business

and there's no future if you're selling

bonds over the counter through the

convertible bond market or even the junk

bond market.

uh the credit uh and then I became more

of a you know first I didn't understand

capital until you know a near-death

experience and I had to think about

money then I didn't really understand

bonds until we had worked our way

through every part of the bond market

and then I just became very critical of

the bond market I just realized it was

crippled and it occurred to me that most

corporate issuers or bonds

are issuing crippled instruments for the

that tactically

uh in order to fund a project, but the

but the credit itself is not good. It's

not good to own it. Like, it's an awful

If you had a bond that was worth $100

and it traded at $52 and it was illquid

and only traded one day a week, that's

not good for you, right? And uh so we

decided that we needed something more

scalable and we went to to the preferred

equity market and we created a preferred

equity instrument to raise money with

the idea that we were going to put

together every good idea we'd seen and

we're going to duck the bad ideas. And

the good ideas are take the take the

credit instrument public, give it a

happy four-letter ticker, give it a

name, let the retail uh investors and

the public investors buy it. The

difference between over-the-counter

and IPO.

Over-the-counter means it's illegal for

you to buy this instrument. The regul

the securities law make it illegal for a

normal person to buy it. You have to

have a hund00 million. And let's say you

had a billion dollars. You still can't

buy it unless you actually have an

account with the bank that's selling it.

Okay? So, if I wanted to make it

insanely difficult to buy something, I

would do it that way. Um, public means

that 200 million people can buy it in 10

seconds. Okay? So, it's not like one is

a little bit better than the other one.

One is good, the other is awful. So, we

decided we were going to sell a credit

instrument to the public. We're going to

IPO it. We're going to put it on NASDAQ.

But then you think, well, I can't have a

five-year bond that I take public

because in two years or three years, the

duration won't be long enough to make it

useful. There's not enough liquidity.

So, we wanted to make it public. We

wanted to be perpetual. We wanted to put

a shelf registration on it so we could

sell it. There are days when we would

sell $45 million worth of this credit

instrument in a few hours. We just

liquid sell it. We could sell five 50

million a day, hundred million a day,

whatever. You can't do that with an OTC

bond. So, we put a shelf registration

together with a preferred equity, took

it public, backed it with a digital

capital asset called Bitcoin. And um you

know, and then we discovered, oh, we

didn't want to pay the money back,

right? Because if you're going to borrow

the money to invest forever, you don't

want to pay the money back. So, so it

turns out that credit investors like to

be paid back, and if you don't pay them

the money back, they require a higher

credit spread. So, we ended up, you

know, uh, selling these things and say

offering a 10% dividend at part. And I

thought 10% was a lot. And then I

thought about it and I realized, well,

we're collecting 30%.

10%, you know, if we pay 10 and we

collect 30. If you work out the math

over 10 years, it works out to the to

90% of the economics go to the common

equity investors and 10% goes to the

credit investor. And that's a pretty

good deal for the equity. So we paid a

bit more

and the bug became the feature and then

we discovered that we had inadvertently

created the world's best credit

instrument and the product is not the

equity the product is the credit because

the product we created is a you know is

a thing you can buy online like STRC

that'll pay you 10 or 10 say it's 10%

dividend it pays you a 10% dividend and

it's a return of capital so It's tax

deferred. So that if you're a New

Yorker, it's like a bank account that

pays you 22%. If you live in Miami, it's

like a bank account that pays you 18%.

And of course, who wants a bank account

that pays them 18%. Like, yeah, right.

Of course, we all do, right? Because

currently the money markets pay you 370

basis points and it's taxable. And

that's the best it's ever going to get

for you. Because if you go to Europe,

it's 150 basis points and if you go to

Japan, it's 50 basis points. And if you

go to Switzerland, it's minus 50 basis

points. So now we get to the final

punchline, like why are we here? Well,

well, here's what we realized is um we

can create digital credit and we can

strip 80 to 90% of the volatility off of

Bitcoin. We can strip somewhere between

80 and 90% of the risk off the

instrument. We can pass through 10% or 9

or 11 or 12% uh return and we can make

it tax deferred

and

there's a $300 trillion credit market

and that digital credit pays you two to

four times more than every other type of

credit.

So if we do that, we could no reason why

you can't just digitally transform 5% of

the market and 5% of 300 trillion

dollars now is 15 trillion. It's a lot

of money, but by the time we get there,

presumably the market's doubled and it's

$30 trillion. So So it's insane. And

then I I'll make one more point and I'll

and I'll stop for your next question,

which is

I first realized that Bitcoin was

digital capital,

but you know, digital capital is like um

it's like you got a three-year-old kid

and you give them a million dollars

worth of real estate in the middle of

Bickl. It's dirt, no cash flows.

And in 30 years, maybe it'll be worth a

lot of money. And if you want to get

cash flows out of it, you got to form a

real estate development company. You got

to design a building, get a construction

loan, build the building, market the

building, rent out the building, deal

with all the politics and the

maintenance, and then maybe you get some

cash flows. But not easy for a

three-year-old kid. Not easy for most 30

years old. So if you go to the same kid

and you say or the parent, you say,

"I'll just give you a credit instrument.

It pays you $10,000 a month forever

starting now."

Okay. Well, how many people would prefer

to have the credit? Right? By the way,

the world is bu even if the capital

assets going up 30% a year. The better

deal is take the capital asset, but most

of the people like they can't wait 20

years or 30 years with no cash flow.

They want the money. So it turns out

that converting capital into credit that

is the mission of the company in the

same way that a real estate developer

takes a bunch of raw land and turns it

into a building and either the people

are living in the building or the person

that's collecting the rents is getting

paid some steady income. um we realize

that we're kind of put here uh to create

that digital credit and that digital

credit is then the stepping stone to the

final thing and the final thing is

digital money and the idea of digital

money is not 10% dividend yield with a

10va it's eight or 7% yield with a zero

vault right what if I give you a bank

account that pays you seven or 8% with

zero volt put $99.71

in, you get $99.71

out, but until you take the money out,

you get 4% more than the risk-free rate

and the currency that you live in.

Right? That is the perfect product. I

submit to you, why I used to think the

iPhone was the perfect product, but the

iPhone, you got to actually be able to

hold it and look at it, and you got to

be awake or maybe be able to hear or be

able to see. But you know a bank account

that pays you 8% or 7%

you could be deaf, dumb, blind in a coma

unborn child. You still want that. You

want that for your heirs not born for 20

years, right? So So what is it that

everybody on earth wants, right? And and

you know in the English language there's

a word for what everybody in the on

earth wants for universal utility and

the word is money, right? You want

money. Okay? When I give you a bank

account that pays you double what sofur

pays you. If I give you double the money

market or if I give you you live in

Japan and I give you 6% or 8% in yen,

I'm literally just giving you free

money. Okay, I know it sounds difficult.

It is difficult. It's like building

nuclear reactors in order to give you

free electricity or one penny a kilowatt

hour electric. It's hard, right? You you

basically have to create a layer of

digital capital. Not our doing.

Then you have to create a layer of

digital credit. It takes a lot of equity

capital, right? We have 60 billion now.

We'll probably have the most digital

equity capital in the world forever at

this point because no one's going to

catch us on this network. And if you

have that credit layer, the last layer,

digital money, can be created by

partnering with a bank or a money

manager. like you just basically go to a

large bank or Black Rockck or a Vanguard

or the likes and then you create 80%

credit 20% cash equivalents put a 10%

buffer of currency reserves on top of it

to strip the last ball each day and you

have just put shock absorbers on the

credit and the credit is of course sort

of like damped volatility stripped

riskstripped capital, right? And that's

the three-step process. So,

what the day I realized why I was here

is I realized we're here to fix the

money, right? We're here to give a

billion people a bank account that pays

them 8%.

When the rest of the world wants them to

take nothing, right? In Switzerland,

nothing. Right? In Japan, nothing. In

Europe, 1% and the US about to be 2 and

a.5%. When the Fed lowers sofur to a two

handle or something, you will be getting

2%. And and the actual increase in the

monetary monetary system is like 7% a

year for 100 years. So if you don't beat

7%, you're just getting poorer in

relative basis. And right now, the only

way for the average person to beat that

is to gamble. You have to gamble on

equity. You have to guess. And I'm of

the opinion when you're a 70 year old

retiree, you shouldn't have to gamble.

You shouldn't have to gamble on equity.

It's not right. Right. The entire world

somehow decided that e that that capital

was buying the S&P index, right? You

have to buy a portfolio of equities and

and what about just giving people a

savings account that actually preserves

their wealth and they don't have to

gamble on equities or the like. And so

that's what we're here for, right? We're

we're digitally transforming the credit

markets, but the big idea is fix the

money in the world and fix the money

with technology.

>> Yeah, that's great. And you you've

already discussed some of this, but

maybe you can expound upon it uh for the

next question. Last week when you were

in Abu Dhabi for Bitcoin Mana, you

mentioned um Satoshi Nakamoto's uh idea

that the future is corporations holding

Bitcoin to create high-powered digital

money. Um can you explain the playbook

that a bank or a nation state should

follow to achieve this?

>> Yeah. Um,

so and this was uh this is an

observation we first got to when we

created stretch. It was like a Bitcoin

back T- bill, like a one-mon T bill. And

the idea was we modify the dividend rate

to strip the maximum volatility off it.

And it looks like right now we can

probably get that instrument to

somewhere between a five and a 10 volt.

like it's probably going to move between

97 and 100 or 98 or 99 and 100, but

we're never going to get it to zero

vault by ourself at the credit layer.

So, and we pay a monthly dividend.

Well, the ideal thing would be

would be we pass it through to a bank,

first Bank of Abu Dhabi or Emirates Bank

or Bank of Bahrain or could you could do

it with Morgan Stanley or JP Morgan, you

do it with any bank. uh and

the bank strips the last 10 points or

five points of volatility off it by

putting uh a small currency reserve on

top and then you can draw down the

reserve. If it if stretch is trading 99,

you just draw down 10% of a of a

reserve. If it's trading 98, you draw

down 20%. When it bounces back, you

replenish the reserve, you take some of

the dividends, you put them into the

reserve, and you just keep this reserve

buffer. It's like a shock absorber on a

car. Like how do you get a car to like

roll smoothly over a bumpy road? You

need some kind of shocks on it. So

that's one thing that you do, but you

need a partner to do it. You need the

counterparty. You can't do it yourself.

The other thing the bank does is you

convert monthly dividends into daily,

right? So you create you create a daily

dividend stream. The third thing you do

is you deal with liquidity fluctuations.

So maybe you make it, you could make it

50% credit, 50% currency equivalence or

80% credit, 20% currency equivalence,

but you actively manage the currency

layer. And by currency equivalence, I

mean like one month treasury bills. You

put that in. And so if you get hit with

a you get a billion dollar fund and you

get hit with a hund00 million of

redemptions in a single day, you sell

the currency. You don't sell the credit

because the currency is a thousand times

more liquid, 10,000 times more liquid

than the credit is. So you sell the

currency in order to avoid uh pushing

the NAV up and down. And um so the

currency is a liquidity buffer, you

know, and then that reserve is the

volatility buffer and through active

management you convert a monthly to a

daily thing.

Then you put it on a platform, rebrand

it, and then the last value add it is

get the regulator to approve the thing

to greenlight it. Right? And so what I'm

describing is digital money. If you you

can create it in the form of a of a

coin, by the way, you can create um a

stable coin type instrument that pays

8%, but you would need a digital assets

regulator to approve that.

You know, imagine stable coins that paid

8% backed by Bitcoin, right? That would

just eat the world, right? Uh if you do

it in a fund like an ETF like Black

Rockck or Vanguard do all the time that

you even JP Morgan has money market ETF

funds, if you do it in a fund, you need

a securities regulator to approve it.

And then if you do it in a bank account,

you would want the banking regulator to

approve it. So if you want to create

high-powered digital money, right, the

idea is it's perfectly pegged to the

dollar or, you know, you could do it in

the yen or the euro too if you want to

peg it to those. But at the end of the

day, some somewhere in the range of it

could be as low as 60 as high as 80% of

all the capital in the world really

wants to be in the dollar, right? So

that's the big kahuna here. So you peg

it to the dollar, you put it on the

platform,

you actively manage it

and then you reduce

you reduce that um uh that last

volatility uh level to zero. At that

point, you know, you've got the

platform, you got the sales force, you

know, everybody's got a, you know, all

the big banks in the world, they have

they either have a big sales force or

they have a big platform that they can

move it on. And I think the real the

real um challenge, it isn't going to be

technical at all. It all comes down to

regulation. And the and the countries

that are most advanced are either going

to be UAE, Bahrain, or the USA. I think

that uh the Swiss are way too slow. Uh

Singapore's lost its nerve. They're not

going to do this. The Chinese are too

more interested in control than they are

in innovation. Uh the Europeans more

interested in control than innovation.

The Canadians, the Australians, they'll

wait. So the the um competition to

create the world's greatest digital

money, the first digital bank that

offers a digital money account that pays

you

400 basis points more than the risk-free

rate that will be determined somewhere

between the Middle East and here

depending upon uh the conviction right

and the clarity and the ambition of the

individual actors. And I obviously I

don't think everybody will do it at the

same time. I think someone will do it,

right? And and what's the play?

Like you know what I said uh to all the

and I met with a bunch of banks, all the

sovereigns in the Middle East. I said

the $200 billion idea is you take your

sovereign wealth fund and you either buy

digital capital, digital credit or

digital equity. If you don't trust

anybody, you buy digital capital. Right?

If you think the credit markets are

broken because 3% or 4% isn't really

enough, then you buy digital credit,

right?

You know, and then

and then if you believe in digital

credit, you could buy the digital

equity. That would be like my common

equity, MSTR, or the equity in another

Bitcoin treasury company creating

credit. And there's two others right

now. There's MetaPlanet and there's

Strive. They're also creating digital

credit. But that's the big idea. The

bigger idea is you have your bank start

to custody Bitcoin

and then there's $2 trillion worth of

digital capital out there and is

unbanked and so you'll have hundreds of

billions and eventually trillions of

dollars and that's like a$ two trillion

dollar idea. You create the digital

credit by extending credit on on the

underlying capital and that's a bigger

idea. But the biggest idea is ironically

the simplest idea. Like a lot of people

don't want a nuclear reactor in their

backyard, but they want free unlimited

electricity.

And if I give you if I said, "Hey, my

state has free unlimited electricity."

You know, not one in a hundred people

would say, "Well, how did you get free