Strategy's Michael Saylor on bitcoin: The volatility comes with the territory

Last time our next guest was on CNBC, he

was expecting Bitcoin to be $150,000 by

the end of the year. Want to find out if

he's changed his tune uh since late

October given the recent move in the

crypto space. You're looking at Bitcoin

right now at $94,000 632. Michael Sailor

is here, strategy founder and executive

chairman. Good morning to you.

What do you think? 150 by the end of the

year. What do you think's happening

here?

You know, I think um we all want to go

to the moon, but if you want to ride the

rocket, you got to be prepared to pull

the G's. Uh over five years, Bitcoin's

had like six brutal draw downs. If you

roll the clock back uh 13 months, we

were sitting around 68,000 and then

after the Trump election, we had this uh

this incredible rally from 68 to 106,000

in 5 weeks. If you go back 14 months, we

were about 55,000. And so if you'd said

we're going to go from 55,000 to 94,000

in 14 months, that would have exceeded

any reasonable investor's expectations.

Over 5 years, Bitcoin's up about 50% a

year on average for the five years. Gold

and S&P are setting the cost capital to

14%. Uh my company's strategy is up 71%

equivalent to Nvidia. Uh there's no

other stock in the S&P that's done any

better. So, uh, I I think the volatility

comes with the territory. If you're

going to be a Bitcoin investor, you need

a 4-year time horizon and you need to be

prepared to handle the volatility in

this market.

>> So, when you when you look at the price

right now, and then we'll talk about the

implications for strategy. But when you

look at the price right now, what is the

upside at this moment look like to you

and what does the downside in this

moment look like to you?

You know, I feel like we put in a pretty

strong base of support around here.

There's an incredible amount of u of

leverage coming out of the system. A lot

of liquidation. A lot of the OG holders

were selling at the $100,000 level. And

uh and so I'm I'm fairly comfortable at

this level. I would think that we'll

build from this base and we'll rally

from here. Obviously, uh it's hard to

make a forecast for the end of the year

right now given given what's happened

over the past few weeks and especially

the shift in the macro environment. But,

you know, as you know, uh my view is uh

Bitcoin is going to outperform gold.

It's going to outperform the S&P. Uh it

is digital capital. And so, if if you're

a long-term investor, this is the place

to be. in in terms of the way your fund

is structured and the debt that you've

taken out to effectively buy Bitcoin,

what are the trigger points just so

people understand the full risks

involved for you uh in terms of some of

these preferred and other things in

terms of where where Bitcoin needs to

needs to lie either on the low on the

low end.

>> Well, I mean, it's pretty important to

note that we're not even 1.15

times levered. We're we're very

fractionally levered and our debt that

we have is four and a half years out. So

we don't really have any trigger points

anytime soon and if Bitcoin were to fall

80% we're still over collateralized and

we're fine. So so our balance sheet's

pretty stable. Uh the company's strategy

uh just like an intelligent bank would

be to build amplification for the common

stock using preferred equity. So the

equity never comes due. uh it's it's a

dividend payment uh declared by the

board. It's not a coupon. We can't be in

a default. There is no credit default

situation from the digital credit that

we're selling at this point.

>> I was curious if you could comment on um

something we heard from Kathy Wood last

week. You know, she has a target I think

by 2030. She had it at $1.5 million a

coin and and recently suggested it

[music] might actually be closer to 1.2,

which is still pretty remarkable unto

itself. Uh and yet when she explained

her new rationale, it was actually that

uh stable coins, the the sort of

emergence of stable coins and the growth

of those coins being used for

transactions, she she argued could

ultimately crowd out uh some of the use

case for Bitcoin. Uh what did you think

when she said that?

>> I think the entire digital assets

economy is is exploding uh and growing

in a bunch of different dimensions. Uh

right now the way to think of it is that

uh half of the economy is built around

Bitcoin. It's digital capital. Bitcoin

is digital gold and the and the killer

application on top of digital capital is

digital credit instruments like Stretch,

STRC, credit instruments that pay yield.

Um and and that's a very simple

business. Uh the other half of the

economy is digital finance and it's

going to be built on the proofofstake

networks that are emerging the Ethereum

Salas the BNBs and the killer

application for that part of the digital

assets economy is tokenized currencies

Allah stable coins tokenized securities

tokenized real world assets tokenized

brands and DeFi in general well that's a

very complicated uh technical

development and and I'm sure that stable

coins are going to go from hundreds of

billions to trillions of dollars, but

it's not really competing with digital

capital. No, no rich person wants to buy

the currency instead of an equity or a

real estate or a capital asset.

>> Michael, given where Bitcoin's trading

right now, are you buying?

>> We are buying. We're buying quite a lot,

actually. and we'll we'll actually

report our next buys on Monday morning.

I think people will be pleasantly

surprised. In fact, we've been

accelerating our purchases.

>> Are you ever not buying, Michael?

>> No, we're always buying. Uh Bitcoin is

always a good investment.

>> But no, that's interesting though in

terms of buying today at $95,364

versus buying two or three weeks ago.

You're saying you were buying at at

both. What's if you were to look over

the last year sort of at your average

what do you where you and do you do you

weight the buying based on on trading?

>> We now own nearly 3.1% of the network

and we bought it on a blended average

about 74,000 a coin. Uh the the point

that I would make for any investor is if

you have money you don't need for four

years or longer and if you don't trust

anybody, you want no counterparties, you

just want to own a piece of the global

digital economy, you buy Bitcoin. It's

the commodity. If you're an equity

investor and you want to bet on digital

credit and you want to bet on digital

capital and you want some amplification,

you buy an equity like MSTR.

If you have money for less than four

years and you're an investor and your

time frame is 12 weeks, you should buy

the digital credit. For example, the

credit instruments we've created have

stripped the volatility off of Bitcoin.

Bitcoin's ball is like 45 on a trailing

30-day average. We have instruments at

28, 21, 15, and stretches a ball of

eight. So if what you want is like a a

serious

>> yield, you want the credit, you don't

want the equity or the commodity.