Tessler is an S&P 500 company.
What proportion of S&P 500 companies do you think switch to
putting some of their cash on their balance sheet into digital assets
and over what time horizon?
Like, when do we get 5% 10% of those companies doing this?
Because it is a shift and it requires board approval.
Yeah, public companies take longer.
Sometimes they take three to six months,
depending upon their situation.
I think that this is a trend that's going to run for the next decade.
And this year you're going to see many public companies do this.
We saw Tesla, we saw marathon, we saw Square, we saw Microstrategy.
I think that you'll see double triple quadruple that number come.
And then I think every year that follows.
Traditionally, Bitcoin's growing 200 to 300% a year.
I think if you crank in a 200% growth rate across the building,
across all the various dimensions of growth,
you'll see that continue for the next five years.
And then it will taper down to 150 and 150 and then 30 and then 20.
It's a story for the decade.
Yeah, how do you manage the quarterly plunge, let's say,
in digital asset prices?
Because we talked a little bit about the volatility at the beginning of the interview.
If you're a corporate treasure in a big company that has to manage that cash room,
perhaps needs that cash.
How do you manage that?
Well, many, many companies have assets and they don't need them in the coming 12 weeks.
They're holding them to capitalize the company.
Like an endowment at a university, you're holding it for the long term benefit
of the customers and the shareholders and the employees.
At Microstrategy, we keep about $50 million in working capital.
And we convert all of our excess cash flows into our primary treasury reserve asset,
which is Bitcoin.
For companies that are cash flow positive, they really don't need
a ready, ready cash in large quantities because they're generating cash.
What they need to do is to avoid debasing their treasury at a rapid rate.
If money debases at 15% a year and if you generate 15% operating income,
you're working as hard as you can to generate nothing for the shareholders
to retire a year because you're losing as much money in your treasury
as you're actually generating from your business operations.
So this is a cash sweeping into treasury so that the balance sheet
accretes in value instead of deluding in value with time.
Or even just holds flat quite frankly.
Yeah, all these companies, Apple, Google, Facebook,
they generate massive amounts of cash.
So if they take that cash and invest it in an asset,
which is losing purchasing power at 15% a year,
they're destroying shareholder value.
They don't, and Boeing, the volatility is only over the course of days and weeks.
If you look at volatility with a four year time frame or a 10 year time frame,
the only thing you see is it's just going up to 100% every single year.
And these companies like Apple are putting this money to work in better ways
just they haven't taken the step into a crypto yet.
And Michael, great tab you really.
I have 30 seconds going what we can say.
Well, the traditional approach of companies was to borrow money
and generate cash flow and buy their own stock back.
But that means they're decapitalizing their company.
Another approach is to take that money and invest in an asset,
which is appreciating against their work in currency.
That provides a much firmer capital base for the company.
Again, it's like if a university gave its entire endowment away,
it wouldn't make it a better institution.
And companies should be building an endowment,
building a capital base so that they can make good in their obligations
to their employees and their customers and their vendors over the long frame of time.
Yeah, the Federal Reserve should be shuddering.
Michael, say, great to have you with us.
Thank you so much for joining us and explaining your thoughts.
The CEO of MicroStrategy there.