Michael Saylor and Bill Barhydt. The Ultimate Crypto Interview on Money Talks!

all right boom let's do this welcome to

money talks i'm your host bill barheitz

our goal with money talks is to make the

crypto

economy accessible

easier to understand

and maybe a little fun

so normally we focus on retail and

uh what it means to folks like us

individuals who want to invest in

bitcoin and the crypto economy today

we're going to have a little bit of a

different focus today i want to talk

more about institutional adoption

of bitcoin and crypto

and as you can see

uh in the image here uh we'll bring up

in a second here uh you know there's a

few companies that have had kind of an

outsized impact

on bitcoin in particular with their

holdings um

probably the the best known brand that's

holding bitcoin would be would be tesla

uh who made waves earlier this year when

elon musk first announced that they were

buying bitcoin but then also announced

uh that they were going to sell 10 of it

turns out that it was actually very

clever on their part because they wanted

to make sure that they could sell it

in a pinch and it was kind of a

liquidity test and they're still holding

the 90 percent that they've purchased so

far sounded like they intend to purchase

more but we haven't heard anything since

uh but by far the the largest uh

purchaser

uh and holder of uh of bitcoin as a

public company is a micro strategy

and we'll be joined in a couple of

minutes by the founder and ceo

of microstrategy michael saylor

and

let me just

give you a little bit of

background on our research on on

michael's absolute genius if you've ever

heard him speak i'm sure most of you

have if you're involved in crypto it's

kind of hard not to

uh mike's uh he's an mit

i believe aerospace engineer

uh had uh dibs on trying to become a

pilot and

ultimately uh luckily for us went into

the software business um instead and um

uh went through uh you know just a huge

boom cycle with uh microstrategy in the

90s and was one of the most prolific uh

ipos uh during that

original internet era dot com era i

remember it vividly

so uh uh there's so many things i could

tell you uh that i've read and heard

about michael but maybe we'll it's

better off we're better off just kind of

getting into it directly ourselves

so uh without further ado let me uh let

me bring michael on

to join us

good afternoon and and i believe you're

in miami welcome

and bill thanks for having me how you

doing

i'm awesome good good great thank you

yeah uh china news aside

the umpteenth ban

of of bitcoin uh at least for today uh

maybe maybe they'll bet it again today

have they ever done twice in one day i

don't know

i think it's good marketing bill

you know like if you think about it you

know you've got pronouncements you know

the the president of turkey says stuff

about bitcoin people are asking the

premier of

russia whether they'll accept bitcoin

people want to know from central bankers

what they think about bitcoin

when's the last time somebody asked the

government their opinion of apple stock

or whether you should invest in the

vanguard 500 index or whether you should

invest in gold or silver

or any other stock

or options trading or whether you should

put your money in a you know money

market nobody nobody cares about any of

those things the only thing they care

about is bitcoin bitcoin is sucking the

oxygen out of the room

and good news is good news and bad news

is good news and as long as you keep

talking about it it's

it's a good thing so now you have the

entire government in essence saying

it's just so good we're a little bit

afraid of it

and then you have people like the ray

dalia saying

yeah well what's your problem with it

well it's just so perfect that i'm sure

that somebody will want to stop it or

ban it because it's too perfect

i mean really that's the problem that

it's just too good that people are

afraid of it i think it's a good idea

you tell do you tell your marketing team

at microstrategy that that no price is

bad press

no press

i've tweeted it

okay

i think pt barnum said it once he said

all publicity is

good publicity but certainly i think for

bitcoin

i really do believe that that the more

people talk about it the better it is

you can't buy this kind of publicity

right

name one others investible asset

that is getting this news cycle

right now it's dominating the mainstream

media it's dominating television it's

dominating

everybody's concerns is there a

politician in the world

that isn't aware of it

yeah okay so here's the thing like when

i was young i saw i used to hate the

short sellers oh they're shorting my

stock

but the truth is you know uh someone

that shorts your stock has to buy it

back in the future

so

if someone talks about bitcoin and they

say they like it then that's good but if

they talk about bitcoin and they have an

issue

then there's only two things you can do

right you can either buy it or you

cannot buy it

and so if a hundred billion times people

mention it and half the time they agree

with the person that said whatever they

said okay well then they didn't buy it

but that's the status quo the other half

of the time the status quo is changing

so i think that this this is really just

elevating the brand

so so i have a whole bunch of things i

want to talk about so let's get to it

one more time the first question i got

to ask you all right

right at the top of your twitter feed

which has 1.5 million followers now i'm

going to guess it was a lot less 18

months ago

um

bitcoin is a swarm of cyber hornets

serving the goddess of wisdom feeding on

the fire of truth

exponentially growing ever smarter

faster and stronger behind a wall of

encrypted energy so now for those of us

who don't have degrees from mit can you

explain what that means sure

well so one thing i realize about

bitcoin is it's a totally decentralized

network

and um and people and companies and

entities are joining it so

i got the i got the metaphor for the

swarm of cyber hornets when i listened

to the wine of bitcoin miners

when you hear them they they you know

they they scream if you've ever been in

a bitcoin mining facility and makes you

think about a swarm of hornets

but the truth of the matter is

you know

some people thought oh it's the bitcoin

miners

well yeah there's hundreds and hundreds

if not thousands of bitcoin miners i

mean there's there's a million two

million bitcoin mining rigs out there

right so there's a there's a million

plus

hornets in the bitcoin mining world and

they're all converting

you know electrical engineering energy

into digital energy and so that's part

of it

but the other part of it is is all the

cyber hornets on twitter

they thought it meant them

right it's like all the people on

twitter talking about bitcoin and it

sort of did but it didn't exclusively

mean them

it also means that this morning when i

got up i turned on the television and

someone in china

is saying something and already 20 000

people had said something else about it

and then

anthony scaramucci is on tv and he's

talking about it on cnbc

and i thought scaramucci is a hornet

right and then i and then i heard andrew

sorkin saying

so bitcoin is visibly decentralized but

i'm not sure about the other coins

and scaramucci saying well that's what a

bitcoin maximalist would say

and i'm thinking

andrew's promoting bitcoin

scaramucci's promoting bitcoin

you know yesterday jack muller was on

cnbc talking about bitcoin

every journalist every influencer how

many ceos of bitcoin are there you're

promoting bitcoin i'm promoting bitcoin

jack dorsey's talking about bitcoin

and thousands of ceos so every company

on earth every government on earth every

bitcoin miner every bitcoin exchange

it's a swarm

creature and it's only growing stronger

because people keep joining the network

and every single one of them that joins

the network makes the network stronger

so let's let's talk for a second about

somebody who's and thanks for the

explanation let's talk for a second

about somebody who's not promoting

bitcoin i don't know if you heard on

peter schiff's uh uh sorry on uh peter

mccormick's what bitcoin did he had

peter schiff on a couple weeks ago and

uh he was debating somebody and i forget

the gentleman's name he actually was

very smart uh peter schiff didn't really

budge red cross maybe yeah that was it

great for us did you hear the interview

okay so first of all i think that peter

schiff is one of the bitcoiners he's

supporting bitcoin too all he does is

talk about bitcoin well okay boss is

another one they're all talking about

bitcoin right even when you're even when

you're

saying something negative a bitcoin

you're supporting bitcoin steve hanke is

supporting bitcoin they're all marketing

bitcoin when they when they don't market

bitcoin when they think they're hating

it they're loving it and when they're

okay but let's make it useful for those

the boomers listening who want to

respond to the gold bugs which i don't

think they did a great job of in the

podcast right

um

you know he he's he's just hasn't moved

his needle right he may be supporting it

because he talks about it but the under

the pr this discussion we just had but

but how do you respond to the gold bug

who really is entrenched and says this

is going to zero

um i mean every paradigm shift you've

got people in the old guard that they

just will never accept the new thing you

know albert einstein

who is of course one of the geniuses of

our world never accepted quantum

uncertainty

god does not play dice with the universe

sometimes people cannot be persuaded of

these things

there are people that could not be

persuaded

when the airplane was invented there are

a lot of people that had never flown an

airplane and they were unwilling to fly

in an airplane for the rest of their

life

you know some people didn't want to give

up their horses

some people don't you know

my father

my father doesn't use a computer

routinely

yeah

i think i think the first iphone my

father used was like the iphone

11 or the iphone 12. he skipped the

first 10 generations

so it's i mean people just sometimes

don't embrace new technology

yeah you know when you and i are if

we're still in this business 30 years

from now

someone's probably going to come up with

a new technology that we have a hard

time getting our hands around

that's going to be a sad day for me i'm

usually the first to buy anything if you

can't sell it so

um

so how how does

getting back to the institutional

question for a second yeah micro

strategy sells enterprise software right

right you're you're taking the profits

from that for the most part and you're

putting them into bitcoin is my simple

understanding of of what's happening and

you're also leveraging the company by

borrowing money on on

via bond issuance to also buy bitcoin is

that accurate

yeah i mean the right way to think about

us is we're like a fiat miner we're a

synthetic bitcoin miner we have a

software business that generates large

cash flows and so

we convert those cash flows into bitcoin

as we generate them

but um we also uh issue debt and we

convert the debt into bitcoin and then

sometimes we issue equity and we convert

the equity into bitcoin

so

we do all that because we think the

bitcoin is the best property in the

world and if we can raise capital

cheaply and invest in something that we

believe will be accretive to our

shareholders we do that

and i think you put up a tweet recently

or last week it said you think you're

holding over 110 000

the public number is like

114 000

more than 114 and i think outside of of

dcg which really isn't a public company

i think that makes makes microstrategy

the largest public company holder of

bitcoin today is my understanding

and does that create from an

institutional perspective issues with

you know accounting rules securities

rules um

headaches that you know

that we don't know about i mean

yeah so if you're a public company

um and you're going to acquire property

you can acquire as much property as you

want so i could buy billions and

billions of dollars worth of timberland

or land or buildings

and uh and i do that as an operating

company bitcoin is property

so there's no limit to the amount of

bitcoin you can acquire now if i were to

acquire the bitcoin in a fund

if i were to go buy gbtc or i would buy

a mutual fund i wouldn't be buying

property i'd be buying a security

and so there is a distinction between

owning property bitcoin is a commodity

equals property versus owning a security

if you own if more than 40 of your

tangible assets are securities i think

you trip the sec 40 act and then you're

a financial company and you have a whole

different set of regulatory uh

requirements so

so owning the property versus the

security was one of the

the constraints or the nuances we had to

consider

um the other nuance uh it doesn't give

us problems but it might give us other

companies problems is is the accounting

for bitcoin

as property has traditionally been and

is now uh indefinite intangible

which means that if you buy a billion

dollars of it and the price trades down

by 50 percent over the weekend and then

it trades up by a factor of 10

you could have in theory 10 billion

dollars of bitcoin but you would be

showing on your balance sheet 500

million dollars of assets

and in theory you could have a nine

billion dollar investment gain but you

would be showing a 500 million dollar

operating loss right okay so this is uh

odd

and it's confusing right um we

uh we have to provide a set of pro

formas on our p l's and our balance

sheets to explain to people what that

means and of course

since our shareholders are generally

long bitcoin and we're substantially a

bitcoin company right a large part of

our market cap is bitcoin that's not a

really a problem for us

but

it would be a problem for a company like

nike if if you're apple computer or nike

or facebook and if you had a pristine p

l and a pristine balance sheet

then uh if you were to buy a bunch of

bitcoin and it traded down you would

actually have an operating loss in the

quarter which is indistinguishable from

having lost money selling tennis shoes

or having lost money uh selling

advertisement so if you're a

conservative cfo

or a conservative board of directors you

would think you'd be afraid of the

volatility of bitcoin but to be clear

you're not afraid of the economic

volatility you're afraid of the

accounting volatility

so but that's a big issue how do we get

i'm sure you're talking to other public

companies either cfos or ceos all the

time and you don't have to disclose but

but

but how do we get them over that hump

given this what's see i mean uh maybe

it's surmountable maybe the fasb changes

the accounting rules but i don't have

any visibility into them doing that so

yeah well so that i mean that was the

news this week bill that on wednesday we

closed the window and submitting letters

to the financial account standards board

and a lot of letters got submitted i

think more than 100 by big companies by

big institutional investors by regula by

other regulators by other analysts

so we we have been uh part uh of the

vanguard leading that charge yep to put

this in front of fazbee

and uh and i'm cautiously optimistic i

think in time that'll be addressed i

mean as i don't see anybody in the

marketplace saying it isn't a good idea

to go from indefinite intangible

accounting to fair market accounting and

so i think that is that's a catalyst

over time and in the meantime i think

the most important thing is just to

educate people

i think the the work around the result

is two things

if you're a public company and you want

to protect your p l your balance sheet

you would buy bitcoin as a security by

purchasing

you could buy gbtc you could you could

buy a fund a bitcoin fund or a mutual

fund that owns bitcoin for that exposure

and that's one way to do it because then

it gets accounted for as a security with

fair value accounting the other approach

is you just buy a small amount

like i think you know square's initial

purchase was you know they bought one

percent of their balance sheet if it's a

one two three five percent that it

wouldn't be material and so

you could do that um

i think you could do the tesla approach

i mean tesla's you know obviously known

for being more decisive as a company

than many other companies

but even there

you know if you look at my tweet you

know what i said was you ought to buy 10

billion dollars of this stuff

and then buy another 10 billion dollars

you'll make a hundred billion then

you'll make a trillion dollars right

right

the michael sayler approach would be go

hard right and go for the billion you

know go go for the trillion dollars

because why why not right well you're

not a dollar cost averaging guy i guess

i'm not a dollar cost averaging guy my

view is is you have a chance uh to turn

a billion into 10 billion

and if i had a billion i could turn into

10 million i would but uh if you're a

bit more conservative

you know and you're gonna take a five

percent position or two percent position

then you wouldn't do that

i think gold you know ultimately why

wouldn't you buy the security because if

you buy the security you don't have

title to the underlying property so you

can't

you cannot move it between a hundred

thousand counterparties with no taxable

event

and i think it's useful to be able to

move a billion dollars without paying

tax on it right

it's an obvious thing for security

reasons and also you just don't want to

pay the tax when you move it from

counterparty to counterparty so

i don't think that's good but i you know

the summary is people are moving into it

bill i mean 35 40 publicly traded

companies

will have bitcoin on their balance sheet

by the end of the year and that's up

from zero

a year and a half ago so we're making

progress but we'll make much faster

progress

when the accounting gets fixed okay that

was my next question do you think that

there are fortune 100 cfos

waiting right now with their finger on

the buy button for this issue to be

resolved i've heard through back

channels that there are a lot of very

large companies that would make larger

investments it were not for the

accounting fair okay and so the

recommendation let me be clear the

number one impediment

to a publicly traded company buying

billions of dollars of bitcoin

is the accounting yeah and and the

proposal is go to a fair market model

where you can mark to market as you you

know

as you would with any other tangible and

that solves the problem and that's my

layman's explanation but that's more or

less the recommendation let's give it

give it the same if i if warren buffett

buys 10 billion dollars worth of apple

stock

you know if he was told he could only

write it down and never write it up

he probably wouldn't have bought it

right yep so just get give it a fair a

fair accounting treatment that's that's

fair value or it's comparable or at

parity with other assets that you could

buy

yep

is there a scenario

that you can think of in the next can i

make one more point though okay go ahead

it's an important point

uh bitcoin with fair value accounting

would be actually superior as an asset

on a balance sheet to owning apple stock

or owning any kind of stock because the

stock is still a security

and the security still trips that 40

limit right whereas if you own property

it would put it at parity more with like

treasury bonds i could have 100 of my

balance sheet and treasury bonds

right i couldn't have 100 of my balance

sheet in securities right or you just

become a broker dealer or an ria or

something like that as an addition to a

public company right it doesn't work for

an operating company they couldn't do

that right right okay got it is there a

scenario that you can imagine

you know even with a 0.1 percent chance

of happening where you would actually

start selling bitcoin in the next year

or two years

no

no it's a look bitcoin is a is a is the

most stable

highest

form highest value property

in the world right now right so so

trading bitcoin for something else is

trading from the apex property the best

property to an inferior property so i i

can imagine scenarios where i borrowed

against billions of dollars of bitcoin

to buy some other property that i wanted

there are other good properties right

there other there are other things right

i won't dispute that owning the stock of

a great company is not a good thing

i would just say that there's no better

thing than owning pure digital energy on

the dominant crypto asset network so

i wouldn't sell it because that implies

you're trading something for something

better while there is nothing better so

i wouldn't do that yeah and and are you

the i think you're the largest

shareholder of microstrategy still is

that i am i'm the principal shareholder

and i'm the controlling shareholder yeah

i have more than 50 percent of the

voting share and so nevertheless are

there people like on your board as a

public company that

you know are take convincing that of

what you're saying or is it more or less

obvious to everyone

we spent a lot of time getting educated

on the issue before we bought our first

bitcoin

right that was a that was an in-depth

process of education we consulted with

experts

we studied we read the books we

considered the accounting implications

we considered the legal implications we

considered the business implications we

consider the securities implications and

then you know

every every week since then we have

considered every development in the

market and how we feel about it so i i

think the the board takes this very

seriously

but you know clearly it's not like you

would buy billions of dollars of this

and then ask the question to the board

what do you think right

right this is a strategy of the company

it's disclosed in our 10k we have two

principal strategies one strategy is to

acquire and hold bitcoin right

so

so in a publicly traded company you

would have

consensus on the board before you did

something like that and that only comes

with extensive due diligence

how has that part of this disclosed

strategy affected the core product

strategy if at all of the company

it's been good um it's actually improved

the core business the best way to

understand our company is we were a 500

million dollar enterprise software

company growing zero percent a year

before we started this

and we had 500 million dollars in

treasury cash and credit

generating zero percent interest

so we were zero growth and zero interest

when we adopted the bitcoin strategy

we're now a five billion dollar

treasury that's growing at the rate of

bitcoin which traditionally was 130 but

you fell in the blank right so so a high

growth five billion dollar company and

then the 500 million dollar enterprise

software company's been growing between

10 and 13

a year on average for the last few

quarters so so we're now growing the

core business north of 10 and we're

growing the other the balance sheet

business much more aggressively now the

core business benefited because our

brand was

was enhanced by a factor of 100

employee retention was improved

recruiting got easier sales got easier

there's a halo effect morale improved

and of course we've also just been

working hard on the core business to

improve the product the products better

the services are better we digitally

transformed the way we sell and service

and deliver our value proposition so all

those things are working on our

advantage too

yeah so we before we got on i want to

this is awesome congrats i'm not sure

you would have expected that halo effect

on the core business but i'm sure you'll

take it

um and and so let's just jump in the

interest of time to to our probably our

least favorite topic which is uh

regulation so before we got on we were

we were trying to guess how often china

bans bitcoin

uh and and it seems like they're on you

know band number four million five

hundred thousand seven hundred and

thirty four

um

does this matter

you know how how should i i don't think

i don't think it matters

you know like i i was an early

shareholder of facebook i was an early

shareholder of twitter i was an early

shareholder of google

you know if you had dumped the shares of

google facebook and twitter in 2010

because you heard that china was going

to ban it it would have been

you would have lost a lot of money

yeah obscene amounts of money trillions

of dollars have been made

on technologies banned

by china

so i think that what china does is

largely irrelevant here and of course

it's kind of getting to be laughable

because like every quarter for the past

five six seven years there's been a

china banning thing

so i don't really think that's that

relevant i think with regard to bitcoin

if you wouldn't hold it for a decade you

shouldn't hold it for 10 minutes

so i i think

i i think these things aren't good for

speculators i don't think you should but

i don't think you should be a speculator

if you're a normal person i don't you

know if you're a trader maybe traders

love it or hate it i don't know but you

shouldn't be a trader you're either an

investor or you're or you're a saver if

you're a saver you're swapping a weak

currency or a weak property for a strong

property and a strong currency and

that's one way to view bitcoin

macroeconomically

moving toward the strong apex property

and if you're a technologist

you're buying the dominant digital

monetary network

with this view that one year one day

eight billion people will be swapping

energy via mobile phones with a hundred

million companies at the speed of light

you know subject to moore's law with

computer programs thinking very fast

you know so you you would buy it because

you believe in digital property digital

energy digital money

right and you believe in uh and you

believe in the philosophy of an

anti-inflationary asset and if that's

the reason you're doing it then it

doesn't really matter what happens day

by day week by week month by month

ask me again in like four years and i'll

give you an interim check

right but what about the u.s perspective

so now i listen to

a lot of

people in the current administration i

won't pick on any names my impression is

is that if you if a few of them had a

magic wand and they could make this

topic disappear maybe make bitcoin

disappear they might actually do it now

luckily our system doesn't allow for

that

but i think that's what they believe i

don't think i don't see that at all

actually i think that some of the alt

coiners spread that kind of of message

but i

i actually think if you look at every

statement by a central banker

or by regulators they're pretty clear

bitcoin is property

bitcoin is a commodity i'll give you the

exact quote bitcoin

is

uh a digital

scarce

speculative store of value unquote

if you took away the word speculative

and you said bitcoin is a digital scarce

store of value

right then that suggests that all 500

trillion dollars in the world should be

converted to bitcoin overnight

so you have to add the word speculative

in order to actually create any

competition at all

and i don't think there's any debate i

mean christina lagarde said that jerome

powell has said that gary gensler has

said that i think janet yellen has said

that i think the people in congress and

the senate have said that

right so i i haven't seen any regulator

actually debate that bitcoin

is a digital store of value and so it's

speculative that means be careful

and think about it when you buy it

no one's talking about taking away your

ability to hold digital property not in

western europe not in the united states

i think all the regulatory fund

is around is it okay for me to not pay

taxes if i sell a billion dollars a

bitcoin with a 900 million dollar tax

gain

no

is it okay for me to transfer a billion

dollars to someone and not disclose it

and not pay taxes on it no

right i mean

there can can i issue a billion dollars

of yoyo coin

you know

to my friends

and call it a currency and a token in a

commodity and not follow regulatory

disclosure on who owns it the answer is

no right so so i think that this that

the regulations coming to securities and

it's and it's

regulation related to

are you abiding by securities laws are

you abiding by tax laws

and that that kind of compliance will

continue but but digital property in the

form of bitcoin isn't really disputed by

anybody

if you looked at the senate hearings

they had last week there was broad-based

consensus

every single senator their body language

and what they said indicated that

they're supportive of bitcoin and the

crypto industry in general everybody

just wants it to be regulated

appropriately and i think the regulators

have agreed so i'm not really concerned

about that i think i think that the the

narratives in the fight are spread by

traders and

speculators and

you know

it'll be worked out

so we have a by my account upwards of

175 currencies in the world today

um what do you think

happens to those currencies 25 years

from now

i think to be a shakeout

i mean i think that uh you'll be a

you'll see the bottom 150 disappear

really in in 25 years i think there's a

shakeout in the cryptocurrencies right

sure i think i think when gensler

pointed out that 6 000 currencies

they're not all going to last people

were up in arms but the truth is

if you believe that the bottom 150

currencies or 100 currencies going to

disappear why wouldn't you think that

the bottom 4 000 or 5 000

cryptocurrencies are also going to

disappear

sure

that's a very different statement than

saying 150 world currency or or

sovereign currencies will disappear

right

the world doesn't need the weak ones

right the world needs the us dollar

it's clear that the rmb is going to last

the dollar is going to last any a

currency issued by a strong country

that's that's decently managed will last

i mean it's it's common for people to

criticize inflation in the dollar but

you should keep in mind that inflation

of the dollar is nothing compared to

inflation and the bolivar

right

so the venezuelan currencies disappeared

the el salvador currency disappeared

many years ago

right currencies in in lebanon

and syria you know the lebanese currency

had you know a 90 percent collapse in 12

months

so i think that those currencies are

discouraging where's the afghan currency

that's gone that's been gone right right

so i think it goes without saying that

the weak currencies will go away the

world doesn't need

all those currencies the world just

needs a few

and the few it needs it it needs the

dollar

people would people would prefer to buy

things that with the dollar in argentina

venezuela and nigeria you know and syria

and lebanon and every in afghanistan

right if they could they would do that

in a heartbeat and in many cases they

are so the world needs that the world

doesn't need the weak currencies and the

world's going to need the cny because as

long as china controls its own capital

markets and controls its own

uh business and trading zone then its

currency is going to be the dominant

currency in that zone everything else is

going to be

somewhat tied to those two currencies i

think

and and so what about the narrative that

you know i get that the boulevards is

going to zero quickly

but what about the narrative that the

dollar is going to zero slowly

right it doesn't just because we're

we're it's not obvious that it's going

to zero doesn't mean that the way we're

inflating the currency does it make it

worthless over time yeah i i just don't

see it's constructive right i mean i

think people are

they're focused on the wrong thing

the thing that's the the thing to focus

on is that gold is dead and you should

sell all your gold and buy bitcoin the

united states government is not dead the

chinese government is not dead as much

as you dislike saving in in the rmb or

saving in the euro or using the euro or

using the dollar

they're actually quite viable and in

fact they're getting stronger

right i mean you're you're saying well

yeah venezuela's currency might be

diving no it

might it's not it might be diving it's

already gone uh 99 collapse right

so if you're asking a practical question

in venezuela what should you be thinking

right now the answer is you should have

a digital wallet with dollars on it and

bitcoin in it

i say it a different way right for

example you know you could you could you

could harp on how much you don't like

the us dollar to me but microstrategy

uses dollars you know we sell all of our

revenues are in dollars all of our costs

are in dollars we use dollars right and

so

you know when will we stop using dollars

to do business well

not this year not next year

so a much more

a much more practical

thing to focus on is how much working

capital do you need in the local

currency you do business

and then how much treasury capital do

you have so microstrategy had

550 million dollars in capital we put 50

million dollars into usd we put 500

million dollars into btc

and we waited a year and today we have

five billion dollars in btc

50 million dollars in usd

okay so what was constructive

what was constructive was for one person

to convert 500 million dollars from usd

to btc that was easy

what is not destruct constructive for me

to hold my breath and wait for 8 billion

people on the planet to stop using

dollars

right like

that you know changing that

telling all my customers to switch and

telling all my employees to start taking

that's like a billion billion times

harder than the obvious thing and i

think every con everybody on earth is

the same way right everyone's got a

savings account and a checking account

so in your savings account you should

have an asset which which will

appreciate in value against currencies

over time

and that's btc

okay so take all your savings and

convert into btc and your checking

account is a currency that you need to

pay for

your room and your board and your

medical care and in china

that's not the euro that's not the

dollar that's not btc

that's cny

in europe that's you you know e

e you are

right whatever i need to pay my taxes

and pay my medical care and pay my my

day-to-day bills is going to be the

local currency

so

they're not going away

and they say in the us it's going to be

usd now in all the weak countries like

afghanistan and afghanistan it's usd

right and in in venezuela you could

probably pay bills and they prefer you

to be paying usd rather than pay in the

bolivar right

and in in argentina they'd rather get

paid in usd i can tell you that for sure

right not not in the peso so

here's a small idea and here's a big

idea the small idea is

i hold one month worth of working

capital in the local currency the

strongest currency

it's it's not like do you hate on the

dollar the point is your choice is the

dollar the peso or the bolivar

or the you know what's the currency of

afghanistan right now

is there a dollar the point is

so so instead of hating on the dollar

embrace the dollar the dollar is the

strongest of the currencies with which

you can you can uh buy and sell things

with liquidity so i

i i think that the idea is i take my

working capital i put in the strongest

currency i can find that's probably the

dollar

i take my

my savings and i put in the strongest

asset i can find

which is right now bitcoin

and

if you're really

smart

you convert all your money into bitcoin

and then you just borrow against the

bitcoin so

so instead of having 500 million dollars

in bitcoin and 50 million in cash

why don't you borrow 500 million you

have a billion dollars in bitcoin 500

million in debt

and now you could fund all of your

expenses just by borrowing against

the asset forever

and uh and that means that because the

the

portion of your capital which is working

capital sitting in the currency is not

appreciating it's depreciating right

you've made that point right

so

if you're really well-run company you

don't want to carry any working capital

zero working capital right you want

negative working capital

so you can work out the math

if you have a million dollars of of

capital and you uh and you expect

bitcoin to appreciate it 10 a year as

long as your expense ratio is less than

10 percent per year you can borrow money

forever yeah if your expense ratio is

less than the expected appreciation of

the asset you're holding on your

treasury

then you can borrow money forever

never sell anything

and get richer

while you wait

right so question so the wealthy have

been doing this with equities for

decades right they go to their their

prime broker they borrow against their

equity they live off of it or they buy

houses they buy more stock they've been

doing it with sports teams too like the

jets or the patriots they've also been

doing it with buildings

like the rockefeller center or any real

estate or any land so they've been doing

it with any property

forever they just finance the property

and live off of it so the question

becomes how do you think this could

affect or would affect the average

consumer potentially 20 years from now