Bitcoin at $100K and Beyond: Michael Saylor on AI and Digital Wealth | Faena Rose
Faena Rose · 2025-05-15 · 1h 32m · View on YouTube →
[Music]
So, welcome to another fantastic Fienna
Rose event. I can't tell you how
incredibly excited we are for this one.
In fact, it was 4 years ago that we came
out of CO and the very first event we
did out of CO was with the man, the
myth, the legend himself, the Bitcoin
evangelist. That's right, Michael
Sailor. And we're fortunate enough to
have him back with us. And I think that
the timing couldn't be more relevant,
more um important given the current
Bitcoin climate. Michael, share with us
a little bit about what we're going to
talk about. Thanks, Pablo. Um uh well,
Bitcoin just uh just tapped 100K and so
2025 represents the first year of
institutional adoption. We've now
entered the Bitcoin gold rush. So, I'm
excited to talk to the fan of Rose Club
about the Bitcoin Gold Rush, how it's
going to go for the next 10 years, and
how everybody can cash in. So, this is
like the Klondike, the gold rush, the
Bitcoin rush. That's it. So, like we we
like to say, pardon me, strap in. Get
ready for another fantastic Fiana Rose
event. Thank you, Michael.
All right, let's get into this guys
tonight because we're all here to hear
about the man, the myth, the evangelist
himself, right? It's almost like I got
the Bitcoin Holy Ghost in me, right? Um,
you know, the first event we did coming
out of COVID in February of 21 was with
Michael Sailor. You know, we called him
up and he didn't hesitate. He was very,
very gracious with his and so we brought
him in and we did a conversation. Then
Bitcoin was at 34. Uh, how many people
bought in at 34?
How many people wish they bought in at
34? There should be a lot more hands in
the audience. And by the end of
Michael's conversation, pretty much all
of you will have your hands up saying
you wish you bought in at 34. But with
that said, um I love this story and
because one of our members who's a
friend of mine
came knew nothing about Bitcoin.
Absolutely nothing. and he came and he
listened and he was like, "Oh, Pablo,
that was a really interesting
conversation." He bought a little
Bitcoin and he bought a little more
Bitcoin and in the four years since he's
bought a lot more
Bitcoin. Uh let's just say he is eight
figures in. Uh as far as how he's done
with it from his little investment, he's
done incredibly well. Um, and we had
this is now the third time that we've
had Michael in. And I think that this is
the most important time because of where
we are with um the Bitcoin climate, you
know, the cryptocurrency climate and the
new administration, the Lumis uh bill
and so on and so forth. So, with that
said, I'm going to say I'm going to kind
of read really quickly the introduction
for Michael, who I feel does not need an
introduction. So, uh, bear with me as I
read his bio. Uh, Michael is the
executive chairman and co-founder of
Michael's Micro Strategy, a publicly
traded business, intelligence firm, uh,
and a holder of, uh, let's just say a
lot of Bitcoin because this was written
probably before your last purchase,
Michael, so bear with me. Uh, he's also
the founder of
Alarm.com. Um, named inventor of 48 plus
patents and the author of the book The
Mobile Wave. He founded the Sailor
Academy, sailor.org, which is a
nonprofit that has provided free
education to over 1.8 million students.
He's an advocate for the Bitcoin
Standard, hope.com, uh, with dual
degrees from MIT in aerospace
engineering and history of science.
Ladies and gentlemen, please put your
hands together and welcome Michael
Sailor. Thank you.
I'm delighted to see you all
tonight. Okay, check. Can we just
adjust? Okay, thanks for coming. Uh, I'm
going to talk about
money. If you don't want money, if you
don't need money, if you don't care
about money, you could ignore
me. If money is interesting to you, then
this should be interesting talk. Um, the
year's 2025. I think 2025 is the first
year of institutional adoption of of uh,
Bitcoin. I think of it as the first year
of the gold rush. There's a 10-year
period from 2025 to 2035. I refer to
that as the gold rush years. Why? Uh,
I'm going to explain it in a second, but
the short of it is this is the first
year that a mega corporation, a public
company could start to buy Bitcoin in
quantities, billions. This is the first
year that they're seriously talking
about Bitcoin being purchased by
governments, by states. And
um by the time we get to
2035,
99% of all the Bitcoin will have been
mined. The last 1% gets produced in the
next hundred years. So if you want
Bitcoin, you probably want to buy it in
the next 10 years because once you get
to 19 uh to
2035, for all practical purposes, it's a
capped supply and the only way to get it
is to bid up the price astronomically.
So it's an important year. Let me start
by talking about economic and technology
challenges. This is uh this this faces
every investor, every executive,
everybody in
business. This challenge um first of
all, if you're an investor, you've got
to decide what to invest your money in.
This is the list of all the various
assets. You can buy magnificent seven
NASDAQ stocks, you can buy bonds, you
can buy currency, you can buy REITs, you
can buy real estate. What you see is
that um conventional wisdom is you got
to beat CPI which is supposed to be two
or
3% and people think they're getting more
in two than two to 3% and then that's
good but the truth is the real inflation
rate isn't the CPI it's the monetary
inflation rate that is uh the rate at
which the money supply expands or the
rate at which scarce desirable assets
incre appreciate in price. Uh, an
interesting surrogate would be what's
the cost of an acre of land in Miami
Beach on the water? Uh, the my house was
built on a about three acres, two acres
and one. And that that land went for
$10,000 an acre in 2030 and that land's
at least $10 million an acre today. It's
uh if you do the math, it works out to
more than 7% inflation. If you look at
Palm Beach real estate on the beach,
there's no way it's going up 2% a year.
Things that are very uh scarce, very
desirable are appreciating closer to uh
the S&P index. If you want a surrogate,
if you're wondering how fast is the
money supply expanding, what is the cost
of capital? What do I have to beat as a
hurdle rate to keep my wealth? It's
probably the S&P index. And so what you
see here
is most diversification is just
destroying wealth. If you diversify out
of anything other than maybe you get you
get the magnificent seven, you're
probably underperforming that monetary
inflation rate. That's a challenge. If
you're running a company, a public
company or private company, if you can't
grow organically 15% a year, if you're
not growing your cash flows 15% a year,
if you don't have a growth story saying
we're going to be 20% next year and
another 20, another 20, nobody wants to
invest in you. You can't go public. If
you are public, the public company
investors lose interest in you. Your
options market uh collapses, your
liquidity collapses. You're in essence a
zombie company. You're not going to go
out of business. There's a lot of
honorable businesses that grow one two
3% a year. In fact, it works out that
99% if not
99.9% of all businesses cannot grow 15%
a year. They won't tell you that, right?
They'll make you feel like you're a
failure or a loser if you're not growing
15 or 20% a year. But this is a dilemma
and it faces every public company, every
private
entrepreneur. And then here's a chart
that's sobering. In the 21st century,
the winners are all digital
monopolies. That is the magnificent
seven and that's the S&P 500. And what
you can see is if you're Apple, you're
Google, you're Meta, your Microsoft,
your Amazon, you're winning. Everybody
else is
losing 493 comp the the S&P 500 is the
500 greatest companies in the in the
world or at least in the US. 493 of the
500 are
losing. Okay, don't feel bad if you're
not outperforming Jeff Bezos. 20,000
retailers had to fail for Amazon to
succeed. 20,000 media companies had to
fail for Google or Meta to succeed.
20,000 device companies have to fail for
Apple to
succeed. It's really sad situation when
you think about
it. But um if you're an investor, your
portfolio doesn't work if you don't own
some of the Magnificent 7, right? Every
other investment idea probably's not
working. And if you're a company
executive, you're probably not
winning. Now in technology, if you want
to win, you can't miss the next wave.
Whether it's personal computers, whether
it's the graphical user interface,
whether it's the internet, whether it's
mobile
computing, cloud. Right now, everybody
talks about AI, AI, AI, AI, AI. If you
don't hear about AI, you're probably
deaf. But I'm here to talk about what I
think is the most compelling next wave.
the the wave that you can catch. I if
you think you can compete with Nvidia,
you have at it. But I don't think Apple
thinks they can compete with Nvidia.
It's not easy. But digital capital is
the next wave and everybody can catch
this
wave. Now I've laid out the problem.
Let's talk about the Bitcoin solution.
What is
Bitcoin? Bitcoin's the next wave. Today
it is uh the seventh largest asset in
the world. And you can count them,
right? Number one asset in the world,
gold. 5,000year head
start. If you're not 5,000 years old, if
if you don't want to wait 5,000 years,
you're in the right place because I'm
going to give you a fast track. Uh after
that, you got the Magnificent 7. You got
Nvidia, you got Apple, you got
Microsoft, you got Amazon, you got
Alphabet, you got Meta, and then just
creeping in there, you've got some
silver, and then you've got uh Saudi
Ramco. But if you look at this, what
you'll see is that the fastest horse in
the race, the one that's actually moving
up the leaderboard the fastest is
Bitcoin. 62% a year, ARR. Not for the
past year. Not for the past four years.
Not for the past six years. For the past
10, ever since it started more than 62%
a year. That's just the past four years
though. And it is running to the top.
And it will run past all the magnificent
seven. And it will run past gold. And
I'm going to show you why in the rest of
my
presentation. Now, it's not just the
seventh largest, right? It's the fastest
growing. It is the most popular in the
world. Most popular asset. I get I I
walk to the beach in in south southern
Italy. People recognize me. I'm walking
down into a hamburger shack in Urgue.
People recognize me. I'm on the I'm on
the tarmac and the runway in
Switzerland. the guy that's servicing
the engines and and uh and he's uh you
know guiding the airplanes on the flight
line, they recognize me, right? Uh
Bitcoin is spread across hundreds of
millions of people. Probably 500 million
people know what this is and they're all
very passionate about it in a way that
they're not passionate about maybe
Saudia Ramco or Meta Stock.
Um, it's the most interesting cuz
something is happening every minute of
the day. You know, it crashed at 90,000
two days ago. People are losing their
minds. Smashed through a 100,000. My
phone's ringing off the hook. It's
always moving. Much more interesting
than these other things. It's pure
digital.
um something that if you can wire a
billion dollars from one iPhone to
another Android phone between six
billion people in a split second that
becomes very interesting and very
digital right what's you can't digitize
silver you can't digitize gold most
these other things are just securities
you can't even take custody of your own
security you can't you can't trade those
securities on Saturday afternoon so
Bitcoin is pure digital
uh asset. It's useful. How useful? You
can if you need a billion dollars in
five minutes on Saturday afternoon in
your life dependent upon it. There's
only one thing out there that will
actually give it to you. Only one thing
people, you know, what's the consequence
of that? Well, it's volatile. It's
interesting. And lastly, it's global.
You know, uh the Magnificent Seven
stocks are really just Western. They're
United States, a little bit of Western
Europe, Saudi Araco is Middle East. You
don't see any Chinese companies up
there, right? And so Bitcoin is very,
very rare combination of things that
make it interesting to billions of
people around the
planet. Now, what happens when I put
Bitcoin on my asset allocation chart
here? Well, it just punches a hole in
it, right? Like when I I didn't put
Bitcoin up there first because you
wouldn't see anything else. Everything
else is be is relatively
uninteresting against 60%. What you see
up there is there's an
answer and then there's a bunch of
noise. There's a signal and there's a
bunch of noise. And if we look at it,
that's that's 60% for four
years. And when you look at it against
this chart, th this makes it much
simpler. You have a bunch of
money. Lockdowns come along in August of
2020. You can buy bonds, you can buy
gold, you can buy real
estate. All three of those don't beat
the S&P index. They don't beat the
hurdle rate. The conventional cost of
capital is the S&P index is 13% every
year for four
years. Real estate probably less
volatile, but but lower uh lower boost.
Gold is only half as powerful. If you
capitalize your entire bank on bonds,
well, you end up with s uh Silicon
Valley Bank, right? Your bank goes
bankrupt. Bonds are an awful investment.
The Magnificent Seven, good idea. Buy
the seven greatest companies in the
world. Okay, good idea. That doubles the
S&P, right? You can outperform if you
just buy the good ones. I've said often
times I say diversification is um
selling the winner to buy the
losers. So when you're holding the S&P,
you gave up the magnificent seven. You
might as well just buy the top seven,
throw away everything else. But the
problem is, you know, you're living with
the top seven. The the three richest
guys in the world are going to be on the
podium at uh the inauguration on Monday.
They are
Bezos, Musk,
Zuckerberg. It's not a surprise. And
then Bitcoin. Bitcoin is if you can't
beat Bezos, Musk, and Zuckerberg, and if
you're not going to actually buy those
stocks, how do you outperform them?
Well, Bitcoin is double. Bitcoin is four
to five times better than the S&P index,
right? It's it's a pretty compelling
chart. You might say, well, it's just
the last four years. But the truth is
Bitcoin's the best asset in 11 of the
past 14 years. This has been the story
for for 15 years
now. If you look at every other asset
class, well, you've got one that's up
147% a year on average since 2011. The
next best is
16 and everything else is just uh
languishing right there. There's a
signal there. It's screaming at you.
It's not just the best performing asset,
it's the best performing uncorrelated
asset. If you go to uh conferences of
high netw worth individuals, the
affluent JP Morgan puts on one. It's
called the alternative investments
conference. The idea is you're supposed
to find an alternative thing to invest
in which isn't risk assets. It's not
you're not supposed to just buy a
portfolio of equities. So, find me
something that will go up in value that
isn't correlated to
equities. This is uh what every
endowment manager at Yale or Harvard is
looking for. They're looking for assets
they can buy that aren't correlated to
the stock market. It might be timber
rates or might be real estate. Real
estate's the most common. It might be
intellectual property rights or or some
other random thing, a natural gas
pipeline.
Well, in this case, it turns out that
Bitcoin is the uncorrelated asset, the
greatest uncorrelated asset in the
world. But you don't have to take my
word for it. These are Fidelity's
numbers. Uh it's, you know, if you check
it, it just has the weakest correlation,
you know, very low correlation to the
S&P, but also it's got the highest sharp
ratio. So for the volatility you're
taking, you're getting outsiz
performance.
A year ago, the first ETFs were approved
for Bitcoin, right? Uh in January of
2024,
um Black Rockck brought out one called
IBIT. Black Rockck is the largest money
manager in the world. They have
1,1 ETFs. And the Bitcoin ETF went from
dead last to number 13 in uh 12
months. basically in the first year it
skyrocketed above
99%. Right. Right to the top.
Um and and in fact it didn't just go to
the top. It turns out that IBID is the
most successful ETF launch in the
history of Wall
Street. In the last 40 years, the
biggest
innovation since Bitcoin, the biggest
innovation, if you got to go back 40
years, is ETFs. This idea you can buy a
package of the S&P index called
SPY. And uh they've been around forever.
And this uh Bitcoin spot ETF just blows
past everything and uh scorches the
earth. That's how much demand there was
to invest in this
asset. In fact, Black Rockck's ETF
outstripped its own gold ETF in the
first year. Again, gold 5,000 years old.
Everybody knows what it is. Digital gold
in the first year blows past. That's how
fast it's
moving. There are 20 uh ETFs, the top 20
ETFs we correlated.
Turns out 10 of them are all Bitcoin
related in the last 12 months. So what
you can see is that Wall Street is
fascinated with uh Bitcoinbased ETFs,
derivatives, anything that's related to
Bitcoin is really changing the world.
And uh those ETFs had uh not a nickel in
them January 1st of 2020. Now they have
$ 109 billion of AUM. And uh and you can
see this is becoming uh a major
trend. But it's not just a trend in the
US. Uh these ETFs are popping up
everywhere in the world. You can see
these are the global ETFs. They're
popping up in Hong Kong and Germany.
They're popping up in South America and
Brazil and
Australia. Uh pretty much every major
capital market has an ETF launching. Uh
why? because they make it possible to
buy Bitcoin in 10 seconds on the phone.
Also, because of your China government,
you want people to keep their Bitcoin in
a bank regulated by a Chinese regulator.
You don't want the capital to flow out
of the country. And so, these solve
capital control issues, compliance
issues, tax issues, convenience issues.
And uh 6% of all the Bitcoin has just
been slurped up by these ETFs. The
people that are buying those generally
they're just long-term holders. They're
buying them for exposure. And so as they
buy up this Bitcoin, they're taking it
out of circulation. The price is being
squeezed
up. I I was talking about alternative
investments, right? Well, here's 60
global billionaires invested in
Bitcoin. What is Bitcoin? Imagine
Bitcoin is a hundred rich families sit
around and say, "Well, we like money. We
don't trust banks. We don't trust
governments. We don't trust any
currency. We'd like to keep our money,
but we don't trust each
other. So, they create a bank in
cyberspace. They cap out the number of
units at some number. We'll call it 21
million. And then all those families can
buy into that bank. And since they don't
trust each other, they all run a copy of
the bank software. That's Bitcoin.
Bitcoin is just a very elegant idea for
how you get to keep your money, right?
Rich people like their money. They want
to keep their money, right? This is
spreading. Those 60 billionaires, those
are just the ones we know, not the ones
that own it. I'm sure that a lot of
people own it that aren't going to
disclose it. But the point that I want
to make here is that Bitcoin is the
fastest growing alternative investment
for high netw worth individuals in the
world. And you know, if you think about
it from first principles, it's by far
the easiest. Yeah, it's not easy to buy
buildings or buy, you know, Paul
McCartney's music rights or buy natural
gas pipelines, but you can buy $20 of
Bitcoin, 200, 2,000, 20 million, 200
million, 2 billion, 20 billion. And it
doesn't matter how much you buy, you
have the same exact property rights, the
same exact asset as everybody
else. This is very compelling. Um, I say
to people sometimes, you're trying to
figure out what to buy to give to your
kids or
grandkids. Um, buy something that passes
the Bernard RO test. Buy something that
a person richer than you, more cultured
than you will want to buy from you in a
decade. Right? If the billionaires want
it now, they're going to want your
Bitcoin in a decade. If they want your
Bitcoin in a decade, then the price is
going up. It's not going down. you'll
always find a willing market for
it. 70 public companies right now are
capitalizing on Bitcoin. Uh in uh August
of 2020 that number was zero and Micro
Strategy was the first and uh and since
then we're starting to see a viral
effect. This is an economic de dynamic
spreading virally around the world. Why?
Because public companies can issue
millions or billions of dollars of
securities every week and they can do it
again over and over again. So once a
public company capitalizes on Bitcoin,
they don't just buy 10 million a year or
10 million a week. Um we uh we went to
the market and we uh raised a billion
dollars in a convertible bond one week.
Uh it worked out well. The next week we
did it again. The next quarter we did it
again. The next quarter we did it again.
Last quarter we started to raise one and
a half billion and then we decided to
make it two and then we decided at the
end of the day to make it
three. So when you're playing with
public company money, the amount of of
capital here is orders of magnitude more
than you would see with private
corporations. And as each one of these
flip, they go from um they go and if the
miners flip, they go from selling
Bitcoin to buying it. And another
example, MEA up there, they went and did
a convertible bond offering one week for
something like $800 million. They came
back the next week and did another 600.
I think they did a billion the first
week and then like 800 million the next
week. And so these are very very
powerful actors in this space. and uh
every major market this is
spreading. Here's a snapshot of Bitcoin
ETFs um versus the commodity ETFs. What
you can see uh like we're looking at
silver and gold and Bitcoin. So,
Bitcoin's the
winner. Gold is the second best
commodity. Um and
um there really isn't a third, right?
The rest are just trading vehicles.
you're not going to actually hold any
other commodity for any material period
of time. So, Bitcoin is generally just
eating all the commodity ETFs. This is
Bitcoin against the bond
ETFs. What you can see here is, you
know, all the bonds are kind of slow,
sleepy money and Bitcoin is blowing past
all of them, right? Do you want 4%
return a year or do you want 99%.
Um, there used to be a 60/40 bond
portfolio. You know, 60% equity, 40%
bond. Now, Bitcoin's creeping in to be 1
to 3% of those
portfolios. It'll move to 5 to 10% of
those
portfolios. As it does, the price of
Bitcoin is going to
skyrocket. This is all the the large
these are the largest ETFs in the world.
And so it's ranked from the number one
in assets, the spy, all the way down.
You see where IBIT is on this chart, you
know, from nothing crawled up on the on
the board. But what you can also see is
that with the performance of IBIT, it's
pulling and Bitcoin, they're pulling so
much capital, they're going to slurp the
capital out of all the other ETFs. And I
don't think it's unreasonable to
forecast that IBIT may very well grow to
be the biggest ETF in the world within
10 years at the rate it's going right
now. And uh the bad news for you is
Bitcoin is beating your favorite hedge
fund. These are the best hedge
funds. You know, we can find four hedge
funds that could outperform the S&P in
2024. Most hedge funds underperform the
S&P in
2024, but Bitcoin, of course, is
crushing all of them. And the joke, of
course, is, you know, the bartender, you
know, the Uber driver, the aircraft
mechanic, they're all buying
Bitcoin, right? And they're totally
crushing all of the masters of the
universe with their PhDs in finance and
all of their computers and their 18
screens and all their high frequency
trading.
Right. And
uh it's a it's a reckoning. Bitcoin is
the new
benchmark. What is it? Well, you have to
go back to first principles to figure
out what is Bitcoin. This is uh the
great court at
MIT where I studied physics and
thermodynamics and engineering.
And everybody in the world knows Satoshi
discovered a method to transfer value
without a trusted intermediary. that's
been repeated at infinitum. Uh it's
repeated at infinitum brainlessly by
people that love Bitcoin, by people that
hate Bitcoin, by people that want to
criticize it. Right? This is the thing.
But they don't really think hard about
what that means. Because if you can come
up with a way to send value between two
individuals without a trusted
intermediary, you've come up with a way
to store value without a trusted
intermediary. So the profound idea is is
not I can send a billion dollars from me
to you without a bank in the middle. The
profound idea is I can put a billion
dollars in cyberspace for all of
eternity without a bank in the middle.
That is to say, we put money in orbit.
The difference between putting something
in orbit and then putting it a ballistic
trajectory is the ballistic trajectory
comes back to Earth. The thing in orbit
orbits for a billion years. you put it
up uh into into a fast enough escape
trajectory, maybe it orbits the solar
system or the sun, maybe it escapes the
solar
system. Putting something in orbit is
profound. Putting money in cyberspace,
storing value in a network that doesn't
rely on a government, a company, a
computer, a
counterparty. That's the profound idea.
uh bitcoin you know satoshi discovered
something which is profound it's it's
digital energy it's the conservation of
energy in cyber space it's the first
digital thing that you can't copy you
can copy everything else it represents
the transformation of capital our
capital from finance and physical assets
to digital is the digital transformation
of everything that we think is valuable
in this world. And here's a chart of it.
Global wealth, $900
trillion. People own things they think
are valuable, bonds and currencies and
equities and real estate and art and
gold. But if you look at that chart and
you think about it a bit, you realize
that half of those assets are held for
the utility value. When you have a car
or a plane because you want to fly in it
or drive it, it's it's useful.
When you have a building because you
need to work in it or manufacture in it,
it's useful. But when you just buy
something because you need to park your
money there, it's long-term capital.
It's store of value. It's the It's the
rich dude that has 10 houses but lives
in one, right? They're just land
banking, right? When you buy the bar of
gold, it it's the rich family that has
87 Picassos in a vault under a mountain
in Switzerland.
They didn't buy them to look at them.
They're just parking the money there.
So, I'm going to call that long-term
capital, that's half of
everything, right? When you when you're
a company with bonds on the balance
sheet, you're just parking your capital
there, right? And so, you can see with
currencies, with bonds, it's pretty
obvious. But a lot of people buy real
estate and a lot of people buy stocks
because they just have to buy something.
They're just putting their money there.
Now, here's the
problem. That $450 trillion parked in
financial assets and physical assets is
struggling against entropy, against
chaos, against inflation, against
competition, against the passage of
time, right? You had a bunch of land in
Pacific Palisades, right? Fire hits.
It's not worth as much. you had uh
something on the on the Gulf Coast of
Florida hurricane hits you, right? You
had a bunch of buildings in downtown
Kiev or maybe uh you're invested in the
best of Siberian real estate or maybe
Yeah, maybe you had ships and they got
caught in a storm and one of them sunk,
right? How does your capital get
destroyed? It gets destroyed by war and
taxation and expropriation. And you
know, you have $10 million house in
Miami and then the state of Florida hits
you for 2% of it every single year.
$200,000 tax bill, right? If you
actually took all your money and you
just bought a nice property in Miami,
your money would be gone in 15 years,
right? Your capital is being destroyed
all the time. How big a problem is this
to the world? It's a $10 trillion
problem. Okay, $450 trillion decaying at
3% a year. It's 13 trillion dollars,
right? It's a lot of money. And and it
is it is the gradual but progressive and
certain decay of your capital assets
because you have them in short-lived
storage containers.
Bitcoin is an asset without the
financial risk of your currency, your
stock or your bond. And it doesn't have
the physical risk of the real estate or
your Picasso or whatever concrete thing
that you want to hold. And so now when
you come back and look at that long-term
capital and you think about smart
people, you say, "Well, I'm a smart
person. I'm a Russian. I have a bunch of
real estate in Siberia. Oops. Maybe I'll
buy some Bitcoin. I'm a Chinese, you
know, wealthy person, but I want to
leave China at some point. I can only
take $50,000 of cash with me. Maybe I'll
buy some Bitcoin. You know, I've got a
bunch of warehouses. They're rusting in
South America. Maybe I'll buy some
Bitcoin. I'm worried about the
government toppling in my local African
country. I'll buy some Bitcoin. I just
buy some Bitcoin. I believe in tech. I
buy Bitcoin.
Bitcoin is transforming and it's
slurping out that long-term capital. So
people go, "Well, what happens if it
stops going up?" It's like, "Well, what
happens if water stops flowing downhill?
What happens if time goes backwards?"
Right? What what happens if the law of
thermodynamics no longer hold? What
happens when people decide they want
less secure things rather than more
secure things? What happens when they
want crappy stuff instead of good stuff?
Right? It's not going to happen, right?
There's a natural progression here,
which is intelligent people are moving
their money from a more disordered state
to a less disordered state, from a uh
from a uh shorter life expectancy
container to a longer life expectancy
container. They're moving from from a an
unsafe place to a safer
place. And that is the digital
transformation of capital. The greatest
transformation of the 21st century is
not digital photos. It's not digital
books. It's not digital newspapers. It's
not digital storefronts or digital menus
or digital audio. Not that those aren't
cool things. You can make a trillion
dollar company on them. But the greatest
transformation of the 21st century is a
transformation of capital, right?
Bitcoin is digital capital. That's the
profound idea. And digital capital is
just economically and technically
superior to physical capital. If I give
you if I give you a bunch of
money and uh I give you the opportunity
to buy a hundred million dollar building
in
Miami and then you start thinking or
maybe you put it in Kiev or maybe it's
in LA or maybe it's in San Francisco or
pick or maybe it's in Istanbul and you
thought about it. What are the problems
with the building? The problems are the
taxes on it, the traffic in front of it,
the tenants, the tors, the trouble, the
mayor. You know, the the governor of
California says you can't sell your
property anymore to protect you, right?
You know, at one point the mayor of New
York rent controlled every property you
owed. At another point, they told you
you couldn't charge your tenants rent
because they might not be able to pay
it. You have all of these problems you
got to deal with. Not to mention
corrosion, hurricanes,
fires, right? Etc. If you could get rid
of all of them, then your building would
be more valuable. But what about the
good things? What if I could cast a
magic spell? What if I could make the
building invisible, indestructible,
immortal, teleportable, programmable,
divisible, funible,
configurable? Right? What if I could
just move the building in a split second
to a place where the mayor didn't hate
me, right? Might be useful, right?
That's digital capital. And digital
capital is global capital because we'll
do a little experiment. I'm going to
take all your money. I'm going to cast a
magic spell and it's all transported
into a mixture of banks and African
countries. 27 banks in 27 countries and
you're converted into the local
currency. you know the whatever the
currency of Zambia central Africa and
some Krueger rounds and some Naira and
some whatever and some whatever and then
I give you a green button and I say well
do you want to reverse that spell and
just move your money back to the US?
Would you punch it? Of course you would
punch it. What if I didn't give you the
green button? What if I gave you an
orange button? And I said, you can
either invest all of your money in
diversified portfolios of companies and
real estate in Africa or you can convert
it into Bitcoin, put it in
cyerspace. And what you see, and now let
me make it easier for you. I'm going to
drop you and all your money in North
Korea or Cuba or I'm going to put you in
Venezuela or Russia or Turkey or Kiev or
Lebanon or Syria. And what you can see
is that all around the world, by the
way, I'm going to put you in Europe. You
know what the Europeans think? The
Europeans want the dollar. If you
actually ask people in the crypto
industry, what's the demand for digital
euros versus digital dollars? It's 99%
dollars, 1% euros. The Europeans don't
even want their own
euro. Every one of them would dump the
euro and go to the dollar. And we, and
that's not speculation. We know that for
a fact because when they're given a
choice, they all choose the dollar. And
so the truth is, you look up at that
map, there's just about nowhere in the
world do you want to be invested in real
estate or diversified portfolios of
currencies, bonds, or companies that's
better than the
US? And so what if I can't bring my
money to the US? And the truth of the
matter is, you can't. Russians don't get
to invest in the US. Chinese don't get
to invest in the US. You're Chinese, you
have a billion dollars. You can move
$50,000 out of the country per year.
Right? In Africa, they don't get to
invest in the US. You know, it's illegal
to hold a dollar bill in in
Nigeria. It's
illegal. Okay? So, in this particular
case, the entire world is looking for a
place to put their money. If they can't
move and leave, then they put it in
cyerspace. Bitcoin represents a bank in
cyerspace and when they put their money
into the Bitcoin bank, they're getting
the same performance, the same
protection that the San Francisco
billionaire gets, right? Everybody's
equal. One last way to look at Bitcoin,
it's a revolutionary advance in capital
preservation. Your commercial real
estate building's good for 40 years. you
know, your your house in Miami, you
know, you probably will hold it 20 years
before you paid the equivalent in taxes
on it, right? Maybe maybe you've got
some other financial assets that last
longer, but for the most part, people
hold things that are good for 10 to 100
years, and it's hard to get a
100red-year asset. Well, Bitcoin's a
thousand year plus asset. If you're
looking for something that you can buy,
hold in your family, and give to your
grandchildren's
grandchildren, Bitcoin is that thing.
You don't know where you're going to be
living. You don't know what regime
you'll be under. You don't you don't
There's no bank. There's no company.
There's nobody you can trust it'll be
around in 150 years. The Bitcoin you can
take with you. And why? Well, because
it's it's literally secured by the most
power in the world. It's a power
network. It's a monetary network backed
by computer power. More computer power
than Microsoft or Amazon could muster if
they wanted to attack it. It's backed by
electrical power. A gigawatt is a
nuclear reactor. 20 full-on nuclear
reactors, but scattered everywhere in
the world. backed by hundreds of
millions of holders, backed by 600
million fanatic crypto people. How
fanatic? Fanatic enough to tilt the
election in favor of
Trump. All three, you know, the House,
the Senate, and the White House. And uh
it's they're not not just crypto
fanatics in the US, they're crypto
fanatics everywhere. South America,
China, Russia, Africa, everywhere. And
it's got real money in it. So this is a
very powerful
network. It's the most powerful crypto
network in the world. People ask, well,
what's it backed by? Power, right? Well,
why Bitcoin instead of the other one?
Well, 99% of the power is in this one.
You can copy it a thousand times, but
the point is there's got to be a winner,
just like there had to be a Google. Just
like, well, why do we use English? Well,
because all the rich, powerful people
speak English. Well, what if they all
change? What if they stop speaking
English? Well, why would they? They have
all the power, right? Why do we use B 10
math? Because all the rich, powerful
people made their machines with B 10
math. It's a protocol. Once you adopt
the protocol, it tends to go on for
hundreds of years or even thousands of
years. Uh, my 21-year Bitcoin
outlook. You can download this model.
Just Google Bitcoin 24. You grab it off
of GitHub. It's a nice spreadsheet. You
can plug in all your own assumptions,
come up with your own forecast. This is
what I think. I think you're going to
see the um the money supply to continue
to expand. I think you'll see 7% or more
monetary inflation. I think certain
assets like real estate will keep up
with that inflation. I think that uh
equity will outperform by a few percent
because of AI and technology. I think
eventually there'll be a, you know, a
million robots making a billion robots,
you know, run by a robot and the company
that owns the robots will be very
valuable, right? Maybe that'll be Tesla.
Maybe there'll be Robot Corp. Who knows?
But I think that I think that the
magnificent seven, the big tech
companies will do okay. I think gold
will gradually get demonetized. I think
I think as people discover digital gold,
they'll sell their gold. They'll buy
digital gold. And I think Bitcoin is
going to outstrip everything. I I think
Bitcoin right now it's growing 60% a
year. It's been growing 60%. I think
that over the next 20 years it'll go
from 60% to 55 to 50 to 45 to 40 to 35
to 30 to 25.
Eventually the S&P index may be growing
12 to 14%. Bitcoin will be 50% more.
It'll be growing 18 to 20%. It'll always
be higher performance than the S&P
index. It'll always be more volatile
than the S&P index, but it will
gradually uh it'll gradually converge on
being 50% better than the next best
thing. And if you work out that math in
your head, it works out to about 29% AR
over 21 years. And when you plug in 29%,
that means by the year 2045, I think
Bitcoin should be about $13 million a
coin. It means that every Bitcoin that
you sell today is going to cost you 13
million. I would not short it. Uh it
means every Bitcoin you don't buy today
is costing you 13 million. It means that
if you want to give 13 million to your
granddaughter, just buy one
Bitcoin, put it in their estate, and
just let it compound. It's maybe one of
the greatest estate planning techniques
ever, right? And you can see the world
doesn't have to turn upside down.
Bitcoin just goes from being 0.1% of the
assets of the world to being
7%. And this this chart of the wealth in
the world looks like this. At 7% uh USD
uh inflation, the total asset pool goes
from 900 trillion to 4,000 four quad
quadrillion. And uh Bitcoin looks like
280 trillion. So it's it's just a small
blotch in the left corner. It's not as
big as equity. is not as big as real
estate. It's not as big as bonds, right?
Global anarchy did not ensue. It's just
you have an emergent global monetary
index. When people with money just want
to keep their money without betting on a
real estate idea, without betting on a
company idea, without betting on
technology, when they just want to park
their capital somewhere, then this is
just a no-brainer place to put
it. Now, I I said we're entering the era
of institutional
adoption. In
2024, Bitcoin emerged as an alternative
to bonds for institutions and there were
a couple of catalytic events. The
approval of the ETFs in January was a
big event. the uh the marriage, the
partnership between the crypto industry
and and the Trump organization and the
Republicans was another very big event
that happened around April, May of the
year. Then the Redwave sweep November
5th was a third monstrous event. Those
those three things catapulted us uh to a
new state. Along the way,
um, there was a massive fight over
whether banks could be able to custody
Bitcoin. And that fight manifested in
something called SAB 121. It was a rule
put forth by the SEC effectively
preventing banks in the United States
from custoing, holding, trading,
handling Bitcoin. And um the the House
of Representatives didn't like that. The
industry didn't like that. The Senate
didn't like that. They actually put
forth a bill to repeal it. It it passed
overwhelmingly in the Senate, in the
House, went all the way to the White
House, and Biden vetoed the bill. Well,
um Biden's going to be gone in a few
hours. We have a new head of the
SEC. I think we uh I think we have very
credible uh beliefs from the industry
that that that SAB 121 will go away next
week. And that will open the floodgates
for every bank in the United States to
start to handle Bitcoin. When that goes
away, all of the financial regulators in
Singapore, UAE, Saudi, in Europe, in
South America, even in China, even in
Hong Kong, believe it or not, they all
and and even in Russia. I'll go on a
limb. They all take their cues from what
happens in Washington DC.
So when DC flips on this, you're going
to see a rippling set of dominoes fall
and I think you'll see a lot of banks
everywhere else in the world will also
get involved uh in in handling Bitcoin.
And then that leaves us one last thing
that's going to go on which is uh what
we call fazby accounting or fair value
accounting and that became mandatory
January 1st of this year. And so those
things are very important to public
entities. There's 115 public entities
right now holding Bitcoin. Remember,
there was one four years ago and and now
it's spreading very virally. And not not
holding a small amount. They're holding
2,700,000
Bitcoin. Okay. Okay. And if you look at
the wave of political
support, Trump, Vance, RFK, Lutnik,
Bessant, Ramiswami, Wals, Musk, they all
like Bitcoin. They all support Bitcoin,
right? The entire cabinet is pro
Bitcoin, right? And and in addition, the
White House likes Bitcoin, the Senate
supports Bitcoin, the House supports
Bitcoin, and Wall Street has flipped.
You have a senator Cynthia Lamez
standing up uh putting forth a bill for
the US to create a strategic Bitcoin
reserve. Black Rockck is the most
influential money manager in the world.
They have 11 trillion dollars of assets.
The guy there used to be against
Bitcoin. He called it an index of money
laundering in 2018. He's the single most
influential person in Wall Street. This
is what he said a few months ago. Now I
I know you have been a leader in willing
to embrace crypto. You have made it so
that people can be in Bitcoin. We hear
that you are thinking about Ethereum.
These are incredible things. How now
Black Rockck is not known as a uh a
gunslinger by any means. So you
obviously must believe that this may be
as an alternative. Is this an
alternative uh in order to be able
because of the a deficit? Maybe
something long-term people should have.
Absolutely. Um as you know, I was a
skeptic.
Yes, I you know I was a proud
skeptic and I studied it, learned about
it and I came away saying okay you know
my opinion 5 years ago was wrong here's
my opinion city this is what I believe
in today I believe the opportunity today
I believe Bitcoin is legitimate I'm not
trying to say there's not misuses like
everything else but it is a legitimate
financial instrument that allows you to
have maybe uncorrelated, non-correlated
type of returns. I believe it is an
instrument that you invest in when
you're more frightened though it is an
instrument when you believe that co
countries are debasing their currency
debasing their currency by excess
deficits and some countries are. I
believe we have um countries where
you're frightened of your everyday
existence and have an opportunity to
invest in in a a something that is
outside your country's uh you know
control then you can have more financial
control and so I'm a a major believer
that there is a role for Bitcoin and in
portfolios. I believe you're going to
see that as an as one of the asset
classes that we all look at. I look at
it as digital gold as I said before and
I do believe there's a there's a there's
a real
need for everyone to look at it as as
one alternative to I would say the
optimism that I have in the world. If
you want to hedge hope, Bitcoin is not a
an instrument for hope unless you're
hopeful you're going to make a lot of
money on it. But I I look at it as a
vehicle in which you're expressing your
your financial acumen in something that
you're more frightened of the world.
You're more frightened of your
existence. And I believe there's a great
industrial use for it. And I and I think
a lot of people are missing that. I
couldn't agree more. I changed my mind
about it when you did. You had been my
thinking. It was like uh he didn't
believe in it. So I can't believe it. I
want to thank Larry Frink for the
message of optimism. Thanks and also for
a great quarter. Larry Frink is the
co-founder, chairman, and CEO of Black
Rockck. I think the most important
investment company in the world. Thank
you. Thanks, guys. Carl, that's Wall
Street
flipping. And here, never sell your
Bitcoin,
right? That's Donald Trump giving you
some good
advice. By by the way, he stood up on
stage and said the US would not sell
Bitcoin if he's president.
The only things the US won't sell are
their national parks and their nuclear
stockpiles and their
Bitcoin. They would sell everything
else. They'll sell your Google stock,
your Nvidia stock, your real estate,
your bond portfolio, your art
collection, your collectibles
collection, your sports team, etc.
That's a very profound, very profound
statement. It might go you might go past
too
fast. But just think about the guy.
Never sell your Bitcoin. Right.
President of the United States telling
you that this is uh Senator Lumis. I
encourage people to buy and hold. I
encourage them to say Bitcoin for their
retirement, for their future. Uh and
that's because as the Congress spends
trillions and trillions of dollars uh
and is flooding our economy and the
world economy with US dollars, there's
no way that we cannot debase the value
of the US dollars.
It's very important here. Bitcoin is a
digital commodity. That gives it an
ethical advantage, a political
advantage. It gives it an ideological
advantage. There's no way she could
stand up there in front of the in front
of the capital and say, "I encourage you
to buy Apple stock or Magnificent 7 or
Nvidia." Right? She might be able to
say, "I encourage you to buy gold." She
could tell you you should buy a house.
She could tell you you should have a
chicken in every pot. Right? She can
tell you you need electricity. These are
commodities, right? The fact that
Bitcoin is a digital commodity means a
governor, a senator, a president, you
know, anyone can advocate for this in an
egalitarian
utilitarian fashion without a conflict
of interest. It's a it's a very very
important uh important nuance here.
And then the entire mood in the market
is really switching. And you can see it
here in this exchange with Joe Kernan
and Muhammad Elaran who is probably the
most well wellspoken wellrespected
modern
economist. There's a lot of people that
are nodding with you because we can
deflate our way out of some of the debt.
But the difference between 2% and 3%
compounded for the dollar is
devastating. And and I don't know, for
you to just blow it off is a little
weird. I mean, there's a reason they
want 2%. Anyone can move goalposts. I
mean, if you compound 3, that's 50%
higher than 2%. You know where 2% comes
from? I don't I'm not I'm No, no, but 2%
2% it would be would make all of us feel
awful in 10 years. Comes from the Bank
of New Zealand. Okay. In the early '90s.
It seems like a good number to me. But
it's an arbitrary number. What you've
got to what well five is an arbitrary
number. I mean if you want to deflate 36
trillion let's go to 10 then I don't
want to pull the rug from under US
economic exceptionalism. I think we are
outpacing the rest at 3%. I think we are
investing in the economies of tomorrow.
If we in the growth drivers of tomorrow,
if we not government, no, the private
sector, everything else. If you if you
push this economy into the private
sector is not what causes the inflation,
Joe. If you push this economy into
recession, you will not just lose
current standard of living, you will
lose future standard of living. We we
are in a very good position. 3% loses
the future standard of living. That's
the problem. Two and a half to three is
is is what I said. You went immediately
to three. Well, if you say three at the
high end, as long as inflation, as long
as inflation expectations are stable,
you can navigate. Better buy some
Bitcoin, Muhammad.
It gives you a sense that Bitcoin has
creeped into the dialogue everywhere in
the world. So, we're year one of the
crypto renaissance. This is what you can
expect in 2025.
You're going to have uh improvements to
the ETFs. You're going to have fair
value accounting. You're going to have a
a pro Bitcoin cabinet, the repeal of SAB
121, an end to the war on crypto, a
digital assets framework of some sort,
and a bunch of Bitcoin standard
companies, uh leaping out of the
woodwork. Micro Strategy is an example
of one of those companies. We're powered
by digital capital. So, what do we do?
We just buy Bitcoin. This is the last uh
four years. We started with $250 million
buy. Uh then we bought it about 48 more
times. After we bought $250 million,
then we bought 2 billion. Uh now we're
up to about 28 billion. So we put
billions of dollars into Bitcoin. I
guess it's worth about 45 billion right
now.
Um, this is a company that had 450
million of free cash and we converted
into $45 billion of assets going up 60%
a year in 48 months. Um, in essence,
what we're doing is we're securitizing
the Bitcoin. We sell fixed income
instruments. We sell bonds backed by
Bitcoin. We take the money, we buy
Bitcoin. We sell equity backed by
Bitcoin. We buy more Bitcoin. The bonds
make the equity outperform Bitcoin and
make us more volatile. The options
traders like to trade the stock that um
that creates demand for it. And in
essence, we're just siphoning that
capital uh into the Bitcoin ecosystem.
In the fourth quarter, we raised $18
billion, 15 billion of equity.
Basically, just 15 billion of equity,
three billion in a convertible bond. The
bond we sold uh to arbitrageers who
wanted to trade the volatility. So we
borrowed $3 billion at 0% interest for
five years and we bought Bitcoin. So
we're borrowing $3 billion, investing it
at 60% a year for free for five years,
right? It's it's a good business. If you
can get it, I highly recommend you do
it.
Um it's not unlike an oil refinery.
We're like a Bitcoin refinery. You know,
you take crude oil and then you spit out
kerosene and gasoline or asphalt. If you
want asphalt, you don't want kerosene.
And you can't pour crude oil on the
highway, right? So, we're literally
using our operation to create various
flavors of Bitcoin back
securities. How's that do for us? Well,
over four years, Bitcoin is up 60% which
is doubling the MAG 7 and we're just
slightly less than double Bitcoin. So,
we've returned 110% a year every year
for four years. Um, that makes us the
best performing stock in the entire S&P
500 universe. Um, by a large amount.
Thank you.
Um, here's my chart. Nvidia everybody
knows about. They're up about a th000%,
1100% over that time period and we've
doubled them. Now, here's here's
the the most important thing I'm going
to say today. I don't think you can beat
Nvidia and I don't think you have the
wherewithal to compete against Nvidia
creating AI chips. But every one of you
can copy us, right? It's a very simple
playbook. Anybody can copy us. any
company, a private company, a public
company, an individual, a family. That's
why I'm on stage. I wouldn't waste my
time coming out to brag about making a
lot of money with some esoteric
proprietary technology that you can't
access. I'm not even here to pitch Micro
Strategy stock. I'm actually here to
pitch Bitcoin. What I'm saying is
Bitcoin is the most important thing of
the
century. It is digital energy. It is
digital capital. It is as profound as
electricity a 100 years ago. It is as
profound as, you know, as
gunpowder, right, was or steel or
fire. If you figure it out, you can do
some good for your community, your
family, your company, your country. Um,
micro strategy happens to be more
volatile than every company in the S&P
500. Okay. Conventional wisdom they
teach you at Harvard B school is volat
volatility is a bug.
And the problem with that is everybody
strips the volatility off the balance
sheet and they strip it off the P&L and
their companies become very
uninteresting. Their stocks die, their
options markets die. You you want to
there's nothing wrong with volatility as
long as you have a lot of capital. So
for
example, you know, Bernard Arno has $200
billion of stock and people write
stories about how he lost 20 billion
last week or he made 40 billion. Or how
about Elon Musk? We made a hundred
billion dollars in a in a month. That's
volatility. Okay? You want that
volatility to go away. Give away all
your stuff and you will have no
volatility, right? People with that own
nothing have no volatility. When you're
dead, you have no volatility, right?
When someone tells you volatility is bad
and therefore you should give them all
of your
wealth, right? They're playing you.
There's nothing wrong with having very
valuable stuff that goes up and down
from time to time. Um, so Micro Strategy
harnesses that volatility. We
actually we actually structured the
business to create it and the
volatility the volatility actually
creates the options market. So if you
look up here, we have uh one of the 10
biggest options markets in the entire
stock market and our stock trades in the
top 10 in terms of equity too. And that
would be impressive for a small company.
But if you look at the right side where
you compare our options open interest to
the market cap, what you see is that we
have the
highest open interest on a market cap
basis in the world. And you see the same
thing uh with regard to liquidity at
least out of S&P 500 companies. It's the
single it's hot money, right? I want you
to think about I take 10 tons, I make it
a sculpture in your backyard. Well, when
you take 10 billion and buy bonds with
it, it's like a sculpture in your
backyard. It's a paper weight. When I
take the 10 uh billion dollars and I put
it in Bitcoin, it's like fashioning it
into a
flywheel and spinning at 60 RPM. And
when you're spinning 10 tons, 60 RPM,
you think about it, that's a turbine.
There's a lot of energy in that. You can
power a city with that. And so thinking
that that uh volatility is bad is like
thinking kinetic energy is a nuisance,
right? When I'm spinning something that
fast, it's literally a reactor or a
turbine. It'll light up a city. Um, this
shows the relative size of our options
market compared
to iBit. You can see the reason Micro
Strategy is interesting is because
everybody's trading there. If you want
to short Bitcoin, you short our options.
If you want to go long, you do the
opposite. I don't really mind if you go
short, you go long. You trade whatever.
It just doesn't It's all good, right? I
mean, we exist to give everybody the
ability to express their opinion, their
fear, their doubt, their anxiety, their
aspiration. So, what I say is your
company ought to be powered by digital
capital, right? And why? Because it's
the highest performing asset you can put
on a balance sheet.
This is analysis I did for
Microsoft. Big rich company. Probably if
not the best greatest company in the
world. One of the four or five greatest
companies in the world. You see,
Microsoft's been appreciating 18% a year
for the past uh four years. You know,
Bitcoin is uh beating them handily by a
factor of three.
But what happens you know if you come
back here look at the S&P 500 that's the
cost of capital that's your benchmark.
So when I normalize this graph and I say
how are you doing versus the cost of
capital what you see is that Microsoft
is beating the cost of capital by 4%.
You see bonds are minus
19%. Right? If you're buying bonds
you're getting destroyed. You're
destroying 1ifth of your wealth every
year. Um, but if you're buying Bitcoin,
you're beating by 48%. Right? You're
compounding whatever you're doubling
every 18 months or
something. Now, if you're Microsoft and
you generate a hundred billion dollar in
cash flow and you buy your own stock
back, you're basically buying the 4%
line. That compared to buying Bitcoin is
minus 97%.
You're destroying 97% of your capital if
you buy your own stock even though
you're the greatest company in the
[ __ ] world. Excuse my
French. How could you do worse? Buy
bonds. If you take the hundred billion
dollars and you don't buy your stock
back, you buy treasury
bills, it's minus
99.7%. Like you literally can't you
might as well burn the money, right? You
can't do much worse than this. I would
say bonds are toxic. You might as well
just inject sludge into your
veins, right? I mean, it's that they're
that bad. And you can see it from this
chart. So, if you want to outperform,
you can't just keep doing things the
same way. You have to recapitalize your
balance sheet with digital capital. Look
at Micros Micro Strategy versus
Microsoft in the same time
period. And I'm telling you what we did.
We bought Bitcoin. We didn't sell the
Bitcoin. We borrowed a bit of money. We
bought more Bitcoin. But look at the
difference is what's going on here. Now
compare Micro Strategy to Microsoft in
terms of open interest in the options
market. Our options market is about the
same size as them.
our our daily trading volume has been
higher than
theirs. But in terms of of options
interest, they destroy 98% of their
options market by stripping volatility.
They're literally stripping all of the
life out of their own company. And look
at what they do to their liquidity. They
destroy
99%. Right? So every company has a
choice to make. You cling to the past or
you embrace the future. Right? The past
is buybacks, dividends, buy treasury
bonds. That's the conventional playbook
they teach you at Harvard B school. The
future is keep your money. This is not
complicated. If you have a bunch of
money, buy Bitcoin and keep it, right?
Bitcoin is digital capital. The
conventional finance theory tells you
volatility is bad and capital is
toxic. Like literally they're saying to
every operating company, get rid of your
capital, avoid volatility. But the but
the digital way to see it is capital is
good and volatility is a feature. It's
life form. So one is regression, the
other one is
progression, right?
You're investing your earnings,
decreasing risk, accelerating growth.
With the progression or the regression
is you're divesting your earnings,
you're increasing your risk. You're
decelerating your growth. This is a
actual chart. Microsoft has surrendered
$200 billion of capital in the past five
five years. Okay, think about this.
Here's my idea for our family. Dad, give
away all of our money, but you just work
harder. Oh, really, son? That was
brilliant. What's your other idea?
That's the idea here,
right? Those are the risks that
Microsoft shareholders face. They
disclose them in their own 10K. I
literally took them out of their own
financial
filings. When you actually surrender all
your capital, you lever up the company
such that all of those risks are
actually much more damaging to the
shareholders. How do you get rid of
that? Well, you have to buy Bitcoin
because you want to escape that vicious
cycle because Bitcoin is it doesn't have
counterparty risk to a
competitor, to a country, to a
corporation, to a creditor, to a
culture, to a currency. The whole point
of Bitcoin is strip away the risk. I
want orthogonal to all of my
risk. So, what if you could buy a
digital monopoly for one times
revenue? And what if it was growing 60%
a year? And what if it's more profitable
than your own company? And what if you
could just keep doing it every
year? Well, that's Bitcoin. Bitcoin's
the universal merger partner. It's how
you actually get out of your rut if
you're a zombie company. It's how you
diversify away from your own your own
risk in your own business. So when you
evaluate those options, you take the
Bitcoin 24 model. We actually plugged in
Microsoft's business here, their cash
flows, their buybacks, their stock, and
we said, well, what if they just sweep
their cash flows into Bitcoin instead of
buying treasuries? And we said, well,
what if they convert their dividend into
buying Bitcoin? And we said, well, what
if they actually replace the buyback
with buying Bitcoin? And what if they
just borrowed a little bit of money at
three or 4% interest, 10% of their
capital to buy
Bitcoin? Well, that's what happens right
there. You add
$155 a share if you just sweep your cash
flows and and avoid the bonds. You add
$362 a share when you replace the
dividend,
$477 a share when you replace the
buyback, almost $600 a share if you just
borrow a little bit of money cheap. This
is against a $420 stock price. It works
out to you you add a trillion dollar to
the market cap or $5 trillion to the
market cap. That's all money that they
could have. What do they have instead?
They just give away the money. Okay? So
instead of being $5 trillion richer,
they're
not. It's worse than that though. The
status quo at Microsoft is 95% of the
value of the stock is based on forward
expectations. They're just you're just
valuing future expected cash flows. They
only have 5% of the enterprise value
backed by tangible
assets, right? Could you imagine valuing
Elon Musk based upon our expectations of
his future
wages? It's like stupid, right? But but
the point is you're the shareholder
holding a share of that stock. when they
actually report they missed
expectations, the stock's going to
crash. If you actually just start to buy
Bitcoin, eventually half of the value of
the company is valued on tangible
assets. You can't screw it
up. If you don't even show up to work
for a year, you've still got 41% of your
enterprise
value, right? So, bottom line there is
Microsoft prospers on that Bitcoin
standard. They go from 10% a year growth
rate to 16%. And the value at risk goes
from 95% down to less than
60%. And they create anywhere from$1 to5
trillion worth of market
cap. And what does it take? Oh, it takes
five people in the Treasury Department
to change the financial policy. That's
literally all it
takes. And I'm going to end with this
observation. If it's good for your
family and it's good for your portfolio
and it's good for your company, it's
good for your country.
So this is a little observation about
the US strategic Bitcoin reserve. Why?
What is the logic of that idea? And the
proposal by the way is uh the US buys a
million Bitcoin over five years, buys 5%
of the
network. Okay, why? Well, first of all,
because it's the US endorsing a
worldwide global capital network which
represents a fair, equitable, peaceful
system to resolve political differences.
We're we're resolving the differences
with technology and with economic and
leadership as opposed to with guns and
nuclear weapons. Right? So that it's not
a bad idea. But the second idea here is
that the US assumes economic technical
leadership for the world. All of the all
the physical capital and the financial
capital in the 20th century is going to
the 21st century. It's going to go from
Siberian real estate and Chinese real
estate to Bitcoin. And if the US buys
it, then we're we're basically
benefiting from that capital
flow. The US already controls the
world's reserve currency, the dollar. If
people stop using the dollar, they're
going to switch to
Bitcoin. The obvious thing to do is just
own the Bitcoin before they switch to it
because then it doesn't matter if they
switch to it. you can basically have all
the Bitcoin and have the dollar and then
you don't have to
worry, right? And and that that creates
a capital network for the world and all
foreign capital, the Chinese money, the
Russian money, the uh you know, all the
money in Africa, all the money in South
America, all the money in Europe, it's
all going to flow into cyberspace on the
Bitcoin network and the US can just buy
it.
So why not attract the
capital to the Bitcoin network which is
owned by the US and then the US benefits
from it. If the Lumis bill is
implemented as it's
written, it it um alleviates half the US
debt. It basically retires half the debt
over 21 years, which is not a bad thing
to do. But if you think about this in
the in the form of or against other
historic precedents, uh the US bought
the Louisiana territory for about $15
million in 1803 from Napoleon. You know,
he paid for an army for a summer
probably,
right? It's worth 12 trillion
today, right? The Dutch bought Manhattan
for 60 gilders for nothing. Became the
greatest city in North America. The US
bought California and Texas from the
Mexicans, paid $18 million. Who would
ever want to live in California? What
good is that, right? It was 1848. They
they definitely didn't see Silicon
Valley or LA or the movie business. But
the point is, it was a pretty big
payoff. And then Seward bought Alaska in
1867 for a few million dollars. They
called it a Seward's
folly. There was no petroleum industry.
There was no natural gas. There was no
anything else. It turned out there was a
trillion dollars of of minerals
underneath Alaska. All told, so you
spend $40 million to increase the United
States's land mass and its property by a
factor of
five. Where's the world headed? The
world's headed to cyberspace. All the
AIs are going to put their money in
cyerspace. Every global actor is going
to put their money in cyberspace. If you
know where the money's going, if you
know where the AI is going, if you know
where the future is going, buy it. Buy
the future. Right? The greatest deal of
the century is the Bitcoin deal. Right?
The Lumus The Lumis bill is worth $16
trillion to the country. What's it cost
us? Nothing. Like almost nothing. Like
you would a rounding error. You could
like pledge 25% of the gold and you
would have that. If you actually scale
up to a triple max or the Trump max
bill, just buy 6 million Bitcoin, you
could just swap the gold that we've got
floating around the Treasury for
Bitcoin. Take over the entire network.
It'll be worth $81 trillion to the
United States. So people say, "Well, the
US doesn't need it." Well, like who
doesn't need $81
trillion, right? Like we go from like
owing money to being net creditors. I
mean, maybe you think we don't need it,
but but it's kind of like saying,
"Well, we didn't really need California
back in 1848 or Texas. We didn't need
Alaska. We didn't need the Louisiana
territory." Well, maybe you didn't know
why we needed it, but the fact of the
matter is you're going to build the
economy of the future on top of that
property, and you can buy it for a
nickel today. And uh you know, this this
analysis works for any country. By the
way, there's like 13 or 14 states that
are putting forth strategic Bitcoin
reserve bills. Texas, just uh one popped
up on my screen today. So, there's a
competition here. uh the first country
to print some of its own currency to buy
Bitcoin wins, right? People that just
swap their gold reserves for Bitcoin
win. If uh the US swaps gold for
Bitcoin, not only would they actually
retire their own debt, they would crash
the gold network and they would
demonetize all the assets of the
Russians and the Chinese and all of our
geopolitical enemies. So, I think there
will be a lot of interesting geopolitics
here. Uh and I guess I will end uh with
this
observation. Look, if if you're a
fool, then you take all your money and
you put it in a third world bank or
third world currency or developing world
bonds and you will lose it all. If
you're
fearful, then take all your money and
you buy currency and bonds and you wait
to die and you'll probably make it to
the rest of your life and not run out of
money. But it's not likely that your
kids or your grandchildren will be rich
because bonds aren't a very good
investment. If you have wealth and you
just want to keep your money and you're
conservative and you're uh
traditionalist, buy a diversified
portfolio of real estate and high
quality equity. Buy the S&P index and
buy some commercial real estate and
carefully manage it and watch it. You
won't get richer. You probably won't get
you'll get a little bit poorer. Maybe
you'll just tread water. You'll stay the
same. your your net worth and nominal
amount will trend up 7% a year or 10% a
year or something. And so good for you.
If you want to 10x your money, if you
want to take whatever you've got and do
10x, buy
Bitcoin. And if you want a
100x, if you want to make extreme
amounts of money, a 100x, a thousandx,
if you want to make hundreds of millions
or billions, then you buy Bitcoin with
somebody else's money. Okay? You you
basically have to buy it with leverage,
right? Borrow money from a bank, buy
Bitcoin. Start a company, raise venture
capital, buy Bitcoin. Take a public
company and issue public company stock,
buy Bitcoin. Take your hedge fund, raise
a billion dollars, get a 2 and 20 deal,
buy some Bitcoin with it, and get 20% of
the upside. So, if you want to outper,
you can get to 10x without a lot of
leverage. If you want to get to the 100x
or the thousandx, then you leverage
something. Uh, Micro Strategy went from
a $12 stock to a, you know,
$360 stock in four years by levered
Bitcoin, right? I mean, this is not a
complicated idea. People have levered
real estate for 100 years. The
difference is this is the most valuable
real estate humanity has ever come up
with. It's digital real estate, right?
It's much more scarce. It's cyber
Manhattan.
Every business can do it. Any family can
do it. Any investor can do it. Any
country can do it. Um hopefully I piqu
your interest and I just invite you uh
to consider, you know, what's your
Bitcoin strategy and I encourage you to
do the right thing for your family, for
your employees, for your shareholders,
for citizens, for your investors, for
country, for the world, for your legacy.
Right? It's a new technology. It was
fire. Some people run away from the
fire. Henry Ford, put the fire in an
engine. Put the engine in a billion
cars. Put it in millions of airplanes.
Put it in all your ships. Right. Changed
the world. He harnessed the
fire. Some people are burned by the
fire. Some people harness the fire. I
give you electricity. Some people are
shocked by the electricity. Other people
wire their houses, their appliances,
their elevators with electricity. Right?
This is digital energy. You can run from
it. You can embrace it. Right? You can
run from
gunpowder,
nitroglycerin. You can embrace it. But
the problem is, you know, the technology
is going to find you one way or the
other, right? And when it does find you,
if you're on the other side of a
monetary technology, it'll make you
poor. You'll be the African tribal
leader holding the glass beads when the
Europeans come in with gold coins and
they manufacture your glass beads and
they buy up everything in your country
and leave you and your heirs destitute
because you weren't smart enough to
realize that glass beads aren't going to
beat gold coins. You can't cling to your
wood when steel comes along. You can't
cling to your bronze when a harder
metal. And if you don't like air power,
when they stop dropping bombs on your
head, you'll probably discover a love of
air power. So, this is technology. Don't
be afraid of
it. You know, I'm not telling you to
take your money. I'm telling you to take
your time. If you don't believe anything
I said, invest 100 hours in this. uh if
you decide after a 100 hours it's a
waste of time, then you'll know for sure
that the other 500 million of us are
idiots and you could talk about it. But
on the other hand, and I'll I'll end
with this one
observation, the average person spends a
100,000 hours in their life learning to
get a job and then
working. Trace how much time you spent
from age six to age 60.
66, right? 60 years, 2,000 hours a year,
maybe you stop 10 years, right? A
100,000 hours you're going to spend to
make money. I would say spend a 100
hours figuring out how to keep
it. Thank
you, Michael. Wait, Michael, please.
We're going to do audience questions if
that's okay. So folks, we want to give
you the opportunity because I know that
a lot of you came into this uh wanting
to ask questions. So please put your
hands up if you want to ask a question.
I think there
was question uh Orlando.
Sorry if that's okay.
Yes. Thank you very much for an amazing
conference. I would like to know what
threats do quantum computing signals for
the blockchain.
I I think right now uh all the quantum
computing uh discussion is primarily
being used to raise money for quantum
startups that want to attract capital
but for the most part it's just hype and
FUD. Every two years people bring up the
topic. The consensus of the programmers
in the industry is is we don't have to
worry about computers capable of
cracking encryption algorithms that we
use today for another 10 to 20 years. At
some point, if computers are powerful
enough to crack those algorithms, then
all of the software in the world run by
Google and Microsoft and Apple and all
the Bitcoin nodes will all be upgraded
with a new set of encryption routines.
But you're at least a decade out before
that's relevant. And it's not unique to
Bitcoin. Uh it would have an impact on
every government, every bank, every
technology company, every digital
product you have in the world. They'll
all get upgraded if they need to. But
for now, it it represents more of a
marketing thing for tech companies that
are raising capital than it represents a
realistic threat to anybody. Perfect. Uh
11 o'clock.
Hey, hey, Michael. How you doing? Um I
uh came to your session last year, not a
crypto guy, but I walked out buying
Bitcoin. So thanks and it's done great.
Um great share on the arc of family,
friends, country for Bitcoin. What are
the most piercing counter if you were to
take the exact opposite side? Like what
are the biggest counterarguments to not
buying Bitcoin?
It's new. It's different. It's not I
didn't learn it in
school. Nobody taught me. It's just it's
new and different and strange and it's a
different way to see the universe. And
most people they function based upon
simple truisms. Volatility is
bad. Don't risk. CFOs aren't supposed to
take risk. You know, stuff like that. So
conventional wisdom is the number one uh
the number one uh friction point or
impediment right now.
Thank you so much. Um what kind of
impact do you see fair accounting value
having in Micro Strategy stock this
year?
uh we'll adopt fair value accounting uh
with uh our Q1 results and then you'll
start to see a change in in uh our GAP
financials. At that point, you'll be
able to write up or write down the value
of all your assets based on fair value
at the end of the quarter. So, we'll
have a much larger balance sheet and
we'll start to generate investment
income in large quantities.
Hello. Um yeah, thank you very much for
your speech today. Um as the biggest
buyer of Bitcoin aside from let's say
Black Rock as ETF
um what is what in your opinion what is
the current size of available Bitcoin
liquidity? I mean, we all know that
there is going to be 21 million Bitcoin,
but in reality, there's a lot of uh
Bitcoin that are locked, uh lost keys,
uh a lot of people not selling. Like, if
you could buy all the Bitcoin available
today, what do you think that number is?
Yeah. I mean, you can buy any amount of
Bitcoin you want today as long as you
pay a price. We buy hundreds of hundred
million dollars an hour sometimes
without moving the price. We bought 200
million an hour without moving the
price, you know. Uh so you can buy any
amount of Bitcoin you want.
Um what's going to h it doesn't really
matter that there's a limited supply
because because as the price doubles
people are going to put Bitcoin on the
market to sell it. So what what's
happening is just there's
450 Bitcoin mined every day and that's
available for sale by natural sellers
the miners. That's about 40 million or
$45 million a day. uh once that 45
million's been bought, then the price
has to move up to find a willing seller
that's willing to sell at a higher
price. And that's a dynamic that will
continue forever.
Ladies and gentlemen, I think we're
going to take this conversation um over
continued cocktails. And I want to thank
Michael Sailor. Michael, thank you so
much for enlightening us. I want to
thank you all for being part of this.