Michael Saylor Deep Session at Bitcoin 2024

hi

Michael hey Bill nice to be with you

this is fantastic okay we'll get right

into it Michael I've talked to many

Heavy Hitters around this conference and

they're all saying the same thing which

is this feels like a momentous occasion

not only for Bitcoin history but for

American history can you say a little

bit more about what other potential in

inflections could be ahead for

Bitcoin yeah I mean I first let's not

let's not run over that comment too

quickly this is the biggest week in the

history of Bitcoin so this is a big deal

I mean this is the week when we have two

of three presidential candidates you

have a former president perhaps the next

president here as uh as uh Trump said 10

Senators a lot of

congressmen

Governors and um and uh the amount of

media attention is profound so this is

an extreme it's a coming out party for

Bitcoin I think and it's and it's uh

it's extraordinary weak because they

recognize the political power of the

community uh they also they also

recognize this as a technology critical

to the success of America and of global

significance and uh and so I think it is

a great week

um and this is an inflection point and

before I tell you the next set of

inflection points let's talk about what

why this is an inflection point um this

is an inflection point

because there's a there's a um a subtext

here an implication and the implication

is Bitcoin is digital property Bitcoin

is property rights Bitcoin is ethical

Bitcoin is technically sound Bitcoin is

economically

sound Bitcoin is an instrument of

economic

empowerment and the establishment now

agrees with you right and we all knew it

four years

ago but it would have been not clear the

establishment knew it the mainstream

media in 2020 didn't even cover the

industry and so I think that this is a

wakeup call this week to the mainstream

and the the establishment of around the

world that uh Bitcoin is here to

stay and uh and Bitcoin is the

future

um you know and I guess the other thing

that I don't want to I don't want to uh

not comment on is the speech we just

heard is uh profound and

historic right it's pretty important

because if you listen to what

Trump just

said he

said we're not going to sell our Bitcoin

you do not sell your Bitcoin that

recognizes that you know you would never

say this about uh most criminal proceeds

that you seized right uh actually the

truth is if the United

States seized a car if they seized a

drug shipment If They seized uh a trade

of foreign currency If They seized pesos

If They seized Euros If They seized uh

paintings or

Collectibles If They seized your

house they would sell

it right I mean the the normal thing is

to auction off any kind of that property

so the fact that uh he would note that

we're not it's going to be the policy of

the government not to sell it elevates

Bitcoin as property that is economically

Superior to all the other property so

first we have an endorsement an

acknowledgement Bitcoin is

property and this and if if it is

property you have property rights to it

the second thing is it's better property

than that other property and I recognize

it the third is we're going to create a

national United States Bitcoin strategic

Reserve

that's a big

deal that's a big deal because you know

we go from uh Bitcoin being something

that's toxic do you want to get rid of

to something that is

virtuous that we want to hold on to so I

think that that's a profound thing that

just happened I think I think that uh

Donald Trump's acknowledgement that the

Bitcoin Community is full of intelligent

ethical hardworking creative inspired

individuals the kind of which that made

America great he pretty much said that

the people that that uh created this

great country would have been bitcoiners

he said the founding fathers are

bitcoiners he said everybody that came

to America is a bitcoiner and what he's

acknowledging is whereas

once the United States was the new world

and it was risky and dangerous to come

here for a better life and

property now Bitcoin is the new world

and it's risky and dangerous and people

have

suffered like Ross to come here for this

property and he recognizes that he

honors

that and he's willing to actually stand

up and tell the entire world that that

will be uh an observation that ripples

everywhere in the world throughout the

establish

and throughout other governments and

there's going to be a bunch of German

politicians looking at

that saying well if if the US is not

going to sell its Bitcoin we must have

been pretty stupid to sell our

Bitcoin and I think that's big big move

forward so a variety of proposals now we

had yesterday RFK proposing to buy

millions of

Bitcoin different level of commitment

today what sort of policies would you

think could potentially improve Bitcoin

and its

trajectory um I think that there's the

big three there's three policies that

accelerate us to institutional adoption

you know that three things that uh take

Bitcoin up by 100x from where it is

today um the first thing is is um to to

legitimize and accept and endorse it as

an Institutional grade asset so so fair

regulation of the asset itself in the

Securities industry and um in January we

got the first installment of that with

the approval of the spot Bitcoin

ETF but it was an

incomplete uh an incomplete regulation

because the SEC still denies enine

creation uh of uh ETF

shares and the the SEC still denies the

ability to trade options on top of spot

Bitcoin ETF shares and the acceptance

was given grudgingly you know out you

know it was basically I did it because I

had to do it but I didn't like it okay

so so what's the significance of that

the negative opinion expressed when when

the approval came that sits as a shadow

over a lot of mainstream investors we

need to flip from a negative opinion to

at least a neutral opinion like what why

is it that a federal regulator isn't

expressing an opinion that this asset is

good or bad versus that asset so so I

think that that's got to change

still I think that uh the lack of end

kind creates and Redemption means that

it's a taxable event if I want to

contribute Bitcoin or withdraw Bitcoin

from an ETF so if you were to like

invest in an ETF and a 10x and then you

wanted to take your Bitcoin in self-

custody you're getting charged 30% of

the

Bitcoin if you wanted to move the

Bitcoin from an ETF to a bank or to

another custodian you're getting charged

as if you sold it even though you didn't

sell it so so right now it's it's

there's a tax inefficiency see and

that's hostile whenever you tax someone

to vibrate the remember what I talked

about vibration and frequency when you

tax on the trade or on the

transformation you're uh you're hostile

you're oppressing the transaction it's

like you're damping you're damping the

wave so I think um allowing in kind uh

crates and redemptions will be a big

Advance forward um when you allow people

to trade options on them you will you

will eliminate the or lessen the

volatility and increase the ability to

generate

yield and those two things are are what

you would expect in the maturation of

the asset class is a security so that's

the first plank you know I would say on

a scale of 1 to 10 with regard to

institutionalizing the

asset we're at a six there you know and

in terms of embracement embracing uh the

second plank is fair

accounting okay if I want if I wanted to

keep you from buying

anything I would establish an accounting

rule that said you can only lose money

on the trade but you can never make

money and and that's a one-way ratchet

if I actually set up an accounting

system where you you always lose you

never win and if you win you have to act

like you

lost and then if you lose again you

could win 99 times but the 100 time you

lose you report one loss no wins okay

that's just prejudicial and hostile okay

so indefinite and tangible accounting

allows you to lose but not win and it's

the kind of accounting you give to

things you don't want people to

buy and so fair accounting was critical

and this January it became

optional and next January will be

mandatory and so that's the that's a big

step forward um you know let's just say

we're

like we're 75% of the way along there

but but we'll be sort of at 100% when

you have two dozen or three dozen

companies and they're all using the same

fair value accounting and everybody's

talking about it and you start to see

companies report multibillion dollar or

10 meab billion dollar gains on that

accounting right

that'll be a big deal that's

two and then the third the third

is um

we if if individuals aren't allowed to

self custody that's hostile to bitcoin

if I passed the law saying you can't

custody that's that's an attack on

bitcoin if companies can't self custody

that's an attack on bitcoin if if I had

a company whose job was to proide to

sell custody services to institutions if

I provided custody to Yale endowment or

to a big hedge fund and then if the

government had a law that made it

illegal for the custodian to provide

custody for your asset that's hostile so

right now Sab 121 is a rule that

basically makes it impossible for a bank

to custody Bitcoin and the right way to

look at it is well that's basically a

regulation preventing companies the want

to custody from

custody and so the result of that is you

have basically the government saying I

guess you can buy the ETF but the ETF is

not allowed to use their Bank to custody

the Bitcoin and they can only use a

crypto exchange to custody the Bitcoin

and we're going to sue the crypto

exchange and so when you have the

government hostile to the crypto

custodian hostile to the banks hostile

to the institutional custodian you're

kind of uh you're undermining the ETF

industry and you're undermining the

asset so the third plank is we just need

for the SEC the OCC the FDIC to allow

Banks like JP Morgan and City group and

Goldman but by the way you might like

not like JP Morgan because of what the

CEO has said but let me guarantee you

that within a year or two years of when

it's possible to cut custody Bitcoin JP

Morgan will start a process to do that

and within four years they'll be custody

Bitcoin because it's money and that's

what they do so you want a world where

Goldman Sachs mortgage Stanley City

Group JP Morgan can custody Bitcoin

because if they can custody it they can

buy it for you and if they can buy it

they can sell it and if they can buy it

and sell it and custody it they will

give you a loan on it and they will also

give you yield on it so the world after

the banks can custody Bitcoin will

be I could have Bitcoin at a bank too

big to fail back by a trillion dollar

balance sheet they would give me 500

basis points of Y you you know how much

money you get if you put your money in

t- bills right now you get 550 basis

points

risk-free I think that the banks will

give bitcoiners

550 basis points risk free when they can

custody the Bitcoin and so the world

would be very different if you got paid

5% interest on your Bitcoin while you're

actually holding the Bitcoin and I think

the other thing is they will give you a

loan at sulur which is 550 basis points

plus 50 basis points spread so you can

get a loan of 6% from c bank or Bank of

America when when they can custody the

Bitcoin and then the third thing

is they'll let you know they'll let you

post the Bitcoin is collateral against

your house or your or your a mortgage

and you'll be able to to uh I think

refinance your mortgage maybe to 100%

loan to value or 120% loan to value by

putting the Bitcoin is collateral like

right now if you go to some of these

Banks and you had a $5 million

house and uh and you wanted to borrow

money they might say well I can loan you

70% or 60% I'll loan you $3 million

against the house at um the best

interest rate it used to be 2 and a

half% by way when I told people to take

mortgages and buy Bitcoin Bitcoin was

40,000 and the mortgages were 2 and a

half% interest I took infinite crap for

that by the way infinite uh

um well so you want to buy the you want

to borrow the 3 million what they would

say is I'll give you a loan for 3

million against the house or you or I'll

make the mortgage 5 million if you post

some Securities like Apple stock if you

want to post t- bills or Apple stock or

the SNP ETF they will give you a $5

million mortgage at two and a half%

interest and you could have done that

with those institutional gr assets

imagine a world where you can top up

your mortgage with Bitcoin borrow at

three or four or 5% interest for 10 to

30

years right and and what's the

requirement the bank's got a custody

that they got to custody the Bitcoin

they got to recognize it as an asset

that's just as good as Apple stock just

as good as a t and so I

think you know we're Rippling where we

get a couple more uh improvements on the

ETFs will'll be at

100% you know a few years from now we'll

be at 100% in accounting and people be

comfortable with that you know once once

The Regulators you know when they start

to repeat what Robert F Kennedy said

yesterday and what Donald Trump said

today which is Bitcoin is digital

property Bitcoin is freedom Bitcoin is

virtuous we're not going to sell our

Bitcoin

when they say that the banks pay

attention Okay the banks you know you

got to look at this is the banks are

looking to the regulator the regulator

is looking to the president the

administration when the President says

you know this is sketchy stuff you know

it's used by

criminals the banks take that you know

and they pay attention and you know what

happens if you don't pay attention the

signature and and silvergate Bank both

actually were very Pro Bitcoin and pro

crypto and they got out on a limb and

The Regulators shut down the two Banks

right and so you can see why banks are

conservative you can see why public

companies are conservative the SEC the

cftc the OCC and the FDIC

matter political leadership matters

rhetoric matters so the words have

changed

Bitcoin is good for the America if it's

good for the dollar if it's good for the

country's Prosperity if it's going to

grow the economy if that's the case

we're going to see all of those switches

flip those all became Catalyst and

now you have the three planks of

institutional

adoption and now I want to make an

observation City Bank

is from is based on National City Bank

and do you guys know the origin of

National City

Bank the head of National City Bank was

John D rockefeller's brother and

National City Bank was the bank set up

by John D Rockefeller because he didn't

want to trust his money with JP Morgan

and so that happened more than a hundred

years ago

people that do business with these banks

sometimes keep the same bank for a

hundred years JP Morgan City Bank

they're more than 100 years old so a

CFO they want to do business with a bank

they trust and the world that I'm seeing

is a world where Google generates a

billion dollars a month and they send a

billion dollars a month to City Bank or

JP Morgan and they say buy a billion of

Bitcoin and it's like a billion a

billion now it's 2 billion a month then

meta sends a billion a month then

Microsoft sends 5 billion and if you

want to see a world where billions of

dollars a month flow and then it flows

into the Bitcoin

ecosystem then it has to be with a bank

that is too big to fail when you're a

trillion dollar company you're not going

to send your money to a bank that's the

third tier Bank that isn't too big to

fail because your shareholders don't

expect you to take that risk so I think

the catalyst is going to be banking

acceptance when that happens you kind of

look at that as these are the high power

rails right these are the rails that

move a billion dollars a day maybe a

billion dollars an hour maybe a billion

dollars a minute right and when we get

there then I think Bitcoin takes its

next leg up

so enormous progress on the regulatory

front yesterday your keynote was

phenomenal in highlighting the

addressable market for Global capital

and how how high the price of Bitcoin

could go you and I share the view that

it's inevitable that it will go there

however if we look out maybe 3 to four

years and Bitcoin is lower than it is

today a is that

possible B

uh it does does Bitcoin have keyman risk

in Michael

sailor okay I'll answer the there two

questions the first question is if

Bitcoin is lower than it is right now in

four years you should count yourself

lucky because you good to buy it okay

and by way that's that's not me that's

Warren Buffett speaking Warren would say

the same thing right Warren would be a

bitcoiner if he was just 40 years

younger trust me

just I I I'm probably not so open to the

new like telepathic coin when I'm 99 you

know or whatever I may I might not be on

stage talking about the new thing but my

point is Warren Buffett would say you

shouldn't be sad with the pric is lower

it's your opportunity to buy it my

second

point if you had a choice in this

audience and if I said I know where're I

know where're Bitcoin going it's going

to 13 million a

coin I'm willing to bet $15 billion on

it maybe 50 billion maybe 100 billion on

it that's what I

believe now if I told you it's going to

13 million a coin

tomorrow

tomorrow how do you feel what would you

be

thinking now if I told told you it'll go

to 13 million a coin in 8 years what are

you

thinking now if I told you it's going to

go to 13 million of coin in 21

years what are you thinking and let me

tell you what's the most valuable

information in the world it's not

knowing what's going to happen

tomorrow in fact if I told you it was

going to go to 13 million in 21 years

and it was going to go perfectly

linearly with no

volatility is that better than if it

goes to 13 million and it goes all over

the place like this and I'm going to

give you I'm going to give you my

opinion the worst thing is to know what

happens tomorrow if I if it goes to 13

million tomorrow the only bit coin

you're ever going to have is what you

have in your pocket right now and your

thought is going to be damn I should

have bought more my second thought is oh

all my family and friends it's too late

for them they missed it I feel really

awful because I wanted to get them into

it the third thought is wow I don't have

time to go refinance my house the fourth

thought is well how do I start a

business and raise a billion dollars to

buy more Bitcoin I'm not going to get

that done by tomorrow morning fifth

thought is damn I have all this money is

not on the exchange I can't wire it cuz

banks are closed tonight okay that's

awful news

you don't want

that

okay if I give you eight years okay you

have eight years but that's not enough

time for everybody to get on board if I

give you 21 years and it's perfectly

linear that's awful too because every

stupid Normy person that doesn't believe

in Bitcoin that doesn't understand what

you understand that has no conviction

they're going to get more Bitcoin than

you because they're just this do you

want this stupid dumb money to buy all

your Bitcoin before you buy it no you

don't want it to be nonvolatile here's

what you want you want it to be

extremely volatile because that way you

know something nobody else knows I give

you 21 years and you can go start a

company borrow money raise Capital start

a hedge fund create a Bitcoin business

tell your friend start a podcast build a

life for yourself get leverage mortgage

your house change the view of your

bank I'm giving you the ability to do

work it's a it's a lever it's a 21e

lever okay like micro strategy has been

working four years if Bitcoin had gone

from 10,000 to 65,000 on August 11th on

the day we announced our Bitcoin Buy on

August 10th

we wouldn't be worth 40 billion right

now we would be worth 4 billion right

now you see so you want the delever you

want the time and the second thing you

want is you want massive

volatility because you know like for

example when Bitcoin went from 66,000 to

16,000 everybody else you know had a

crap Lost Their Minds freaked out and we

double

down right and it was a benefit for us

it was a problem for everybody else we

ripped up and and so you get the chance

to prove yourself economically and you

get a chance to prove yourself

intellectually and you get a chance to

prove yourself morally and ethically if

you live through the volatility you

should pray for the

volatility when it goes away you'll lose

your advantage and you should you should

be happy that you know where everybody

else on the planet's going to be in 21

years you got a 21- year Head Start

that's a career you can make a life out

of that and don't worry about the stuff

that comes in the middle It's a Good

Thing Once Bitcoins at 13 million a coin

there will be no more

volatility no when Bitcoin is 13 million

a coin uh if you look at my base case

Bitcoin is like 20 30% of the equity

market and so it's just big enough that

the volatility is decreasing but but my

model and my mind and what we're

thinking is if the money supply expands

at

7% the the the equity index will expand

about

10% the volatility of the S&P index will

be about 10 to 12 the volatility of

Bitcoin will be 20 to 22 it'll always be

more volatile the performance will be 20

to 22 ARR it'll always be higher

performance always be more volatile

because it's an open uh unregulated

Global Market because it doesn't have

the counterparty risks and it strips

away the risk of a company and it strips

away the

entropic uh the entropic degradation of

physical property

it's always going to be better it's

always going to be more volatile and I'm

not concerned about it that's why even

when bitcoin's 13 million you'd be

stupid to sell your Bitcoin and buy the

other stuff it's all the other stuff's

always going to be

inferior and I I didn't answer your last

question which is you know keyman

risk you know what if I go away you know

and I thought about it and I you know

and and what I would just say is

uh first of all I don't have any heirs

but a nonprofit Foundation which all a

Morphin being a public charity so when

I'm gone my stock my shares my assets

flow into a public charity whose mission

is to support Bitcoin and the adoption

of Bitcoin

forever and

so you don't have to worry about micro

strategy changing direction you don't

have to worry about you know the truth

is I'm probably better for Bitcoin gone

than

here you know dead than alive as long as

you're if you're dead you can't you know

you can't what was the word murder was

it slay Your Heroes slay Your

Heroes you know so you know like once

I'm gone I'm not going to be talking so

I can't give a bad tweet S I suppose uh

and micro strategy or just go on with

the micro strategy and the micro

strategy is simple it's raise capital

from the institutions that have Capital

buy Bitcoin hold the Bitcoin forever

don't lose the Bitcoin don't sell the

Bitcoin that's a great note to end on

Michael Bitcoin is forever to the Moon

thank you for everybody in the room

you do not sell your Bitcoin

[Music]

n