Keynote: Michael Saylor | DAS NYC 2026 | Day 3 | Main

Um today I'm delighted to be with you

and the focus of my discussion is the

digital transformation of the capital

markets. So I'm going to talk about the

concept of digital capital, digital

credit, digital money and digital yield.

Uh collectively

all of these asset classes are forming

from the the crypto economy and they're

all targeting the three to400 trillion

dollar capital market that right now is

substantially invested in traditional

credit instruments and equity

instruments. So, it's logical to think

that there'll be a digital

transformation of that $400 trillion.

And if it's 10% that means there'll be

$40 trillion that will flow into these

instruments. And whether it's 1% or 10%

or 20% that is yet to be determined. But

whatever it is, it's trillions and

trillions of dollars. And so without

further ado,

let's just uh start with a basic

fundamental concept. Digital capital.

capital, economic wealth, um economic

energy. What is digital capital? It's

Bitcoin. Bitcoin is digital capital. It

is a way to store economic value

digitally, to move it through time and

through space without any physical

instantiation.

Uh it's competing with uh metallic

capital, that's gold. uh property

capital that's uh New York City real

estate. It's competing with cultural

capital like your Monae painting. It's

competing with fiat capital like your

sovereign debt. Why is Bitcoin digital

capital? Well, because the most powerful

man in the world thinks it's digital

capital. We have a Bitcoin president. He

believes in Bitcoin. We have a Bitcoin

cabinet. Uh the top four financial

uh regulators in the world. uh the head

of the Treasury, the head of the Fed,

the head of the SEC, the head of the

CFTC, they all believe in Bitcoin. The

vice president of the United States

believes in Bitcoin. Lots of

non-financial regulators, they all

believe in Bitcoin.

So, the acknowledgment that Bitcoin is a

legitimate capital asset is an

extraordinary development. Capitol Hill

has embraced Bitcoin.

Banks have embraced Bitcoin. We see very

positive movements by Morgan Stanley

last week to roll out a Bitcoin ETF. We

see City is going to roll out Bitcoin

custody. We see very bullish moves by

Charles Schwab. Uh here you can see on

this chart

most of the major financial actors

in the United States right now are all

have a Bitcoin strategy and they're

going to start to trade it if issue

credit against it custody it build

derivatives on it.

Fintech and tradi have embraced Bitcoin.

You can see the explosion in the number

of of native accounts hundreds of

millions. You can see the neo banks are

embracing this asset. You can see the

brokerages and wealth managers are

starting to embrace this asset. ETFs

have embraced the asset. 125 right now.

1.4 million in Bitcoin in those exchange

traded funds. Public companies, we're

now up to 194 public companies holding

1.1 million in Bitcoin.

What are the key things to keep in mind?

Uh this is this is uh the most stable,

most wellsupported,

most secure

uh most politically powerful,

economically powerful, technically

powerful crypto network in the world. If

you just take the market cap of all of

the nonstable coin tokens in the crypto

ecosystem, 66% of that is Bitcoin.

Bitcoin is the dominant crypto network.

Uh it is the dominant global digital

capital network. You can see it

reflected in the liquidity. You can see

it reflected in the market cap. So now

you have a basis for a digital economy.

Digital capital. What's the killer app

for digital capital? It's credit. That's

what our company does. We convert

capital into credit. What is capital?

It's like, "So, I own a million dollars

of real estate for the next 30 years.

There's no cash flows. What do I want? I

want cash flow every month. So, how do I

get $10,000 a month? I have to create I

have to do a real estate development

project. I have to build a building,

lease the building, convert it into cash

flows. So, the world is built on

capital. The world runs on credit. Our

company takes that digital capital, we

convert it into a currency, we strip

away the risk, we damp the volatility,

we distill the yield, we compress the

duration. Instead of waiting 30 years to

get rich, I'm going to get rich

progressively every month with

guaranteed cash without the volatility.

The world's full of credit investors.

They simply want to get they want to

maintain their money and they want more

capital or more cash to live their life.

But the world's full of capital

investors. They actually want to swing

for the fence and they want to make

more.

So we're straddling capital to credit.

Uh here's a picture. Bitcoin is digital

capital. It's it's uh right now it's got

a 50 vault. So over the next 20 years,

you're probably looking at 30% ARR, but

you're looking at 30 to 40 volatility.

If you can actually get on that roller

coaster, then you're going to make a lot

of money. Uh you're going to have to

live for that time frame without any

cash flow. What's digital credit? Well,

in the form of STRC, we have stripped

and extracted the first 11.5% of that

capital return. we've we've uh taken the

volatility off the principal and we pass

through the first 11% of the return to a

credit investor.

Well, why would you take 11 instead of

30? You take 11 because you just don't

want the volatility and you want the

guarantee. It's a very simple idea.

What's unique is the way we've done it.

We've done it with a public company

strategy with a publicly listed

preferred stock STRC

with a digital capital asset Bitcoin

uh with uh a preferred equity which

means it never comes due and then we've

used that preferred equity to create um

a set of uh programs that strip the

volatility out of it. We have um a

dynamic shelf registration that allows

us to sell the volatility above $100,

above par. We can manage the dividend.

We can increase the dividend. We can

decrease the dividend. We can change the

collateral backing. And so if you

actively manage these things, you can

create a very stable credit instrument.

And of course the idea of that credit

instrument is let's give the equity

investors doubledigit returns and tax

efficiency. You don't pay tax. Uh you

defer the tax on your gain. That's the

advantage of equity. The advantage of

credit is there's low volatility and you

preserve your principal. But can you put

the two together and give people

double-digit returns, tax deferrals, low

volatility, and principal protection in

a single instrument? That's what digital

credit is. It's the best of both worlds.

And how do we show that? Well, a lot of

different ways to review it. I'll show

you some stats in a second. But before I

do that, I'll make a point about digital

credit versus private credit. Normally

when somebody wants 10 or 11% return in

a credit instrument, they go to private

credit. It's illquid. It's opaque. It's

heterogeneous.

It's discreet.

It's uh it's restricted. And they charge

you a high fee. And that's a challenge.

When you're investing in a thousand

different real estate projects or a

thousand different private companies and

giving them five-year loans, it's very

difficult to see how you make that

liquid.

But there's $3.7 trillion in the private

credit market right now. You can see

that's struggling. There have been there

have been a lot of redemptions. They're

getting a quasi run on the bank because

people decided that maybe it wasn't as

liquid and it wasn't as transparent as

they'd like it to be. Digital credit is

everything private credit wanted to be

but isn't. Digital credit is liquid. It

is transparent. It's homogeneous,

scalable. It's accessible. There's no

fees. So in essence, we know there's a

$3.7 trillion demand for doubledigit

credit instruments. We also know that

the Achilles heel is the heterogeneity

and the illiquidity.

We've solved both of those in a in a

novel way using Bitcoin as the back and

collateral. So what what is digital

credit for? Well, it's good for a retail

investor. It's good for an institutional

investor. It's good for a corporate CFO

or a treasurer. It's interesting for a

hybrid investor or it's good for a

digital investor and you can build all

sorts of digital monetary instruments on

top of it. Um it turns out that 80% of

STRC and this is5 billion outstanding

80% of it is in retail accounts right

which is an extraordinary achievement

because normally the hardest thing in

the world to do is to sell a new credit

instrument to a retail investor. Uh, I

can't be sure, but I suspect that this

is probably going to end up being the

most successful retail credit instrument

anybody's ever created in the market.

Um, what appeals to them? not just a

double-digit uh yield. But the other

appeal is that these are return of

capital dividends, which means you don't

pay New York City tax, you don't pay

state tax, you don't pay federal tax

until you've received all of your

principle back in dividends. So, you

might go nine years and not pay tax on

the dividends from a return of capital

instrument. Um,

nobody's ever created uh an infinitely

scalable

uh way to generate return of capital

dividends before Bitcoin came on the

scene. But Bitcoin is the way you can do

it. If you have a digital treasury

company with a digital capital asset,

then all of your dividends become return

of capital, which means effective zero

tax rate when you receive the dividend.

So, who wants a bank account that pays

them 11% that's t that's not taxed or

tax-free at least now? Everybody. Like,

who doesn't want 10% from their bank and

not getting taxed on it, right? Why

wouldn't you, right? The the natural

reaction is what's the catch and does it

work? And the truth is it didn't exist

12 months ago. It's totally new and it

doesn't work unless you have digital

capital. And if Bitcoin isn't digital

capital, you'd have a challenge. But

when the world agrees that Bitcoin is

digital capital, you can create these

sort of things. So how do they perform?

Well, this is the performance of Bitcoin

since the all-time high, October 6. Bit

if you a capital investor and you bought

Bitcoin, you're down 43%.

If you bought the digital credit, you're

up 1% and you've collected 5.5% in

dividends.

So, you know what kind of investor you

are. The truth is, I'm the capital

investor. I'd rather hold the Bitcoin

because I think it's going up 30% a year

for the next decade. But you can see

there's a world of people that just

would rather have

the the flat principle zero vault and

collect the 5.5% in dividends.

We have engineered this volatility. The

the the organic volatility of Bitcoin in

the last 30 days is 52,

right? You can see it compared to to

it's 3x the NASDAQ. It's, you know,

getting close to 4x S&P. The organic

volatility of our equity MSTR is 71.

And we have stripped all of that

volatility off of STRC to make it two,

sometimes one. And so you see we're

straddling both sides of the V curve.

Some people want the one, some people

want the 71. Depends on what kind of uh

investor you are. But you can see this

is a very straightforward engineering

exercise. If you can strip the

volatility less than two and you can pay

someone a double-digit return, you've

created perhaps the highest sharp ratio

of any publicly traded instrument.

Like STRC's got a sharp ratio in the

three, four, even five range.

The sharp ratio of the S&P index is six,

right? NASDAQ.7,

right? Nvidia is one,

Google is a two. That's the strongest

performer in the world. And yet we've

created something which is leaving them

all in a dust. Right? This is going to

become the story for a portfolio of

managers.

What if we can create something with a

sharp ratio of 10,

right? This is the lightsaber of money,

right? No one's ever even conceived you

could do this with a liquid instrument.

You couldn't without digital credit.

So, big highlights. Uh, Stretch has got

$224 million a day of liquidity right

now. that is uh 200 times more than a

normal liquid prep. It's 400 times more

than the average, right? Is these thing

and that's in the first nine months,

right? Our target is to take that to a

billion dollars a day, right? And in

theory, the demand for something like

this with a low with a lowvall, a high

sharp ratio, a double digit yield,

right? The demand for this pretty much

should scale with the liquidity on a

daily basis after people decide whether

they think it's creditworthy.

Um, how does it compare to other credit

instruments? Well, if you're a taxpayer,

it's 11 and a half% versus 8.4 for

private credit, 3.7 for T bills. Uh, of

course, that's if you're not a taxpayer.

If you're a taxpayer in Miami Beach, the

tax equivalent yield is 18%. If you're a

taxpayer in New York City, the tax

equivalent yield is like 23%. It's like

a bank account that pays you 23%.

I'm sure you guys don't pay taxes.

Maybe you do pay taxes. [snorts]

You can you can see that it's it's off

the charts. And the only question is

again, how how have you created this?

Why haven't I heard of this? What's the

catch? How long will this go on?

This is what uh STRC looks like against

other uh other money markets around the

world. And you can see clearly what what

have we created? We've created the

risk-free rate in the crypto economy. So

the free market risk-free rate is 11

a.5%. The the risk-free rate in dollars

is 3.7. The risk-free rate in yen is 70

basis points. Right? That's the

arbitrage.

That's what happens if you let capital

move freely everywhere in the world.

Uh the velocity of stretch is

accelerating. Um we sold 377 million of

it in one week and then the next week we

sold nearly 1.2 billion. No one's ever

issued 1. We did we did 1.2 billion in

four days. No one's ever sold $1.2 2

billion of a credit instrument via a

shelf registration

maybe ever and we did it in four days

but we're really just getting going as

you can see here. So the AUM is growing.

We've now doubled since the IPO.

Uh we just announced a $21 billion shelf

registration. We think we'll sell 21

billion and when we do we'll double it

and double it and double it again. I

don't know why we'd ever stop. All that

money is flowing into Bitcoin. I put

this on a scale versus every other shelf

registration in the credit market. And

what you can see is that, you know,

nobody ever had a reason to sell credit

instruments into the public market

before digital capital and digital

credit came along. So, you know, it's

really kind of just off the charts. Now,

what's that do to Bitcoin? Well, we're

buying all of it. Okay. uh in the week

from March 2nd to March 8th, we bought

one there were 221 million of Bitcoin

produced by all the miners in the world

and we bought 1.7x that much. And the

following week, we bought 5.3 Bitcoin

for every Bitcoin created by a minor. So

we're in essence, we've created a

synthetic minor. We're mining all of the

Bitcoin in the world. When we're doing

it with a credit instrument, we're doing

it for free.

Okay? All you got to do is believe that

Bitcoin is going to appreciate 11% a

year or more. And what we've done is

we've acquired $1.1 billion worth of

Bitcoin at no cost to our shareholders.

Right? If you're a Bitcoin maxi, this is

a pretty good business. A very good

business. What's it do for the equity?

Well, you can see we strip the

volatility and the performance off of

the capital asset to get to 11%. Where

does the energy go? the excess

performance, the excess volatility goes

to the common equity. So in essence,

Bitcoin's going 30 up 30 35% a year.

We're doing 50% a year. We have actually

been performing about 55% a year for the

past five years. You just have to be

willing to get on the volatility roller

coaster. If you're a Bitcoin maxi and

you want to outperform Bitcoin and you

believe in it, then you buy the equity.

If you don't want to trust anybody, you

buy Bitcoin. And if you simply want a

very comfortable ride and you want to

get paid four times more than the bank

would pay you or a money mark would pay

you buy the credit. And so it's really

an exercise in aligning your duration,

right? Are you a long-term capital

investor with no and you want no

counterparty risk, you buy BTC. Are you

a hardcore equity investor? Then you buy

MSTR. Are you a credit investor? If you

need the money in a month or a year or

two years, you probably should own the

credit.

Now, STRC is the basis for creating the

mythical Bitcoin back stable coin,

right? You want to create a something

that looks like, feels like a stable

coin. Call it a savings coin that pays

you 8% or 10% backed by Bitcoin. Well,

what we discovered is you need to do it

with an intermediate step. You take

Bitcoin, you create stretch, and then

you put stretch into that next layer. So

there's an explosion of people coming in

the ecosystem. We've got corporate

treasuries that are adopting stretch in

lie of a money market. But you've also

got a lot of crypto entrepreneurs that

are creating uh stretchbacked uh savings

coins or tokens

you know that will pay you 8% with no

volatility.

And that takes us to this topic of

digital money digital yield. What is

digital money? Well, digital money is 0%

volatility, daily liquidity instruments

built on digital credit. Digital yield

would be maybe nonzero volatility or

illquid instruments, but you just you

crank it up so it's massive yield. If

you want to take stretch and step it

down, you could uh leverage 20 to 80%

and then you could create something with

a performance of 5 to 10% yield with

zero of all. Right? And if you wanted to

step it up, you could create something

that pays you 15 to 25%. And you could

attempt to make it zero vault or you

could let it have two, three, four,

five, six v. These are all exercises for

our partners. Right. Right now as I

stand here, we're delivering two 11 and

a half% yield.

The [clears throat] real opportunity

though, if you're if you're interested

in creating something cool in the

digital asset space, in my opinion, is

you take digital credit and you can

tokenize it. You can put it in a private

fund, a public fund, you can put it into

a bank account, a crypto account.

You know, why not your crypto exchange

pays you 8% on your cash balances?

Why not create an ETF that pays 10%. You

can decide how much volatility to to

pass through. You can deci you can we're

paying a monthly dividend, but you could

turn into a daily dividend or stream it

hourly. Or you could and you could also

gate the liquidity. You could you could

create a private fund that's 3x levered

that gives people a redemption once a

month or once a quarter if you wanted to

do that. And then of course you can

change it to any currency. Like what's

the market for someone that wants to

give you 8% in Japanese yen?

You would think it'd be pretty big. You

can create yen yield, euro yield, Aussie

yield, pound yield, whatever you like.

And so digital money can be created in

various forms. You decide if you want to

make it a coin, make it a fund, or make

it an account. Uh what do we see? Well,

we see a hundred trillion dollars of

equity investors that want double-digit

yields that are getting beat up by

volatility. And if they could keep the

yield and and get rid of the volatility,

maybe they would buy this. And we see

$300 trillion of credit investors

that are either getting sulfur or sulfur

plus a credit spread. And investment

grade spreads are 80 basis points and

junk spreads are 280 basis points. And

and it's all returnfree risk, right?

There's nothing compelling about any of

it. So, people are reaching for yield

and they're taking on massive duration

risk and credit risk in order to get

more than nothing. Well, we think that a

much better alternative is you go to

digital credit and you get to double

digit returns and and it's possible to

create stuff that looks investment grade

and its credit quality that pays you

doubledigit returns that is highly

liquid. Uh the world doesn't perceive

that yet, right? You're seeing it for

the first time. It's literally coming to

life in the last few weeks, but you're

at the digital asset summit and

presumably all of you are focused on

digital assets. So my advice is if I was

starting a company today, if I wanted to

make a billion dollars, I would create

something on top of digital credit, I

would step it up, step it down, lever

it, or I put it in a new container

because the market opportunity is to

grab one, two, three% of a hundred

trillion dollars, you know, and you

could keep a 100 basis points of it or

200 basis points or 300 basis points and

pass through the rest. And then the

customers and the investors would feel

like they've got the best thing in the

world. And so that that's really the

opportunity for financial innovation

right now. And uh so thank you for your

time and your attention and uh I

appreciate it.