Micro strategy founder and executive chairman Michael Sailor joins us now.
Michael, it is great to have you back on the program and certainly a key time to talk to you.
Yeah, thanks for having me.
So I want to start with what we have seen playing out in the cryptocurrency space more broadly this week in light of everything with FTX,
the ripple effects to other assets, including the price of Bitcoin and just get your response to what we're seeing and how it's unfolding.
I think this week highlights the virtues of Bitcoin as much as it exposes the fragility of the crypto ecosystem.
Bitcoin's a commodity you can self custody without an issuer.
The vast majority of all the crypto tokens out there are unregistered securities trading on unregulated exchanges and they're fairly centralized.
And so what could go wrong? Well, we saw what could go wrong if the centralized token trading on unregistered exchange blows up this week.
I think that the Bitcoiners been predicting this for a long time.
Speaking for all the Bitcoiners, we feel like we're trapped in a dysfunctional relationship with crypto and we want out.
So how do you get out? Does this enable it when you see a shake out like this across the broader space?
Look, I think the industry needs to grow up and the regulators are coming into this space.
And what what what the world wants is it wants digital assets and digital commodities and digital securities, but there's no way to register a digital security.
There's no clear guideline or roadmap for a designating a digital commodity.
The world wants a trillion dollars of digital currency in the form of the USD stable coin.
And so I think that the regulatory intervention of late has been all negative like enforcement, but the marketplace is waiting for the regulators to say, this is how you register a digital currency.
This is how you register a digital security or a digital commodity.
And instead of saying all the crypto exchanges are should register, we need to get the crypto exchanges registered because the future of the industry is
is register digital assets trading on regulated exchanges where where everyone has the investor protections they need and the investors in general understand the difference between Bitcoin and a stable coin and a security token.
Does this propel regulators to do that to move more quickly and to actually implement some of these regulations?
And if so, does it also increase the risk that those regulations maybe are too aggressive or don't necessarily get at the heart of this discussion right now?
Well, I think it's definitely going to strengthen the hand of the regulators. It's going to accelerate their intervention.
You know, and there's a regressive regulation, which is to say, you can't really do anything.
And that'll contract the industry. Bitcoin will be the winner because Bitcoin is a digital commodity and it's the least controversial of everything.
But there's a progressive regulation, which says, this is a path to register, digital security, a digital currency, a digital token, and your digital exchange.
If there is a progressive regulation, then I think you'll see, you won't see 20,000 tokens, you'll see a handful dozens,
but they'll be properly registered tokens. The industry is going to grow much more rapidly.
And ultimately, we're moving from the entrepreneurial stage where this was a wild west offshore, where anything goes.
To an institutional digital asset stage where the big players like Bank of America and Fidelity and BlackRock and the Goldman Sachs and J.P. Morgan's are going to enter this space.
And we're all just going to grow up and the world is going to benefit from that.
Michael, it's David. I don't know if you knew Sandbank-Penn Freed or not or dealt with him. I just love to get your take overall on this, though.
You know, clearly would seem relationships that were perhaps not known to some of his investors or his customers in terms of the Alameda research and its relationship with FTX, leverage on leverage.
You know, what do you think about it all? And are you as amazed by it as some other people are?
Like I've said over and over again, there is no second best crypto asset. The Bitcoin strategy and the Bitcoin, like an idea is you can self-custody an asset without an issuer.
And it was it was born out of Satoshi's observation that you can't trust a currency that can be manipulated by a central party and you can't trust a bank.
And eventually the bank will freeze your assets and the currency will be inflated and eventually it'll crash.
That's been happening for thousands of years. The crypto industry just reinvented the currency.
FTX is just another currency. They were the centralized exchange, with undo leverage, with opacity.
And it's a sad, sad situation. But it's a reminder of why Satoshi gave us Bitcoin in the first place.
I think it's pretty clear the only investable asset for a responsible investor is Bitcoin.
And the use case is I'm holding it as a store of value for a long period of time knowing there's going to be volatility.
And I personally, I'm not going to come on your show and recommend a registered security because registered securities like Google and Netflix have risk.
Unregistered securities trading and unregulated exchanges on massive leverage offshore.
What could go wrong?
Well Michael, if you can't trust sovereigns under a centralized model, isn't the corollary and isn't the example of FTX potentially the idea that you can't trust individuals either.
And you can't trust their potential malfeasance or their greed or their mistakes.
The principle of Bitcoin is you can't trust the CEO, you can't trust a company, you can't trust a custodian, you can't trust the bank.
And you shouldn't have to, you should be able to hold your own keys, run your own node, and the network ought to work with no discretion for the next thousand years.
Satoshi articulated this very clearly in the white paper.
I think that it's a strong ten in the Bitcoin community.
It's very, it's a sad circumstance that a lot of people have to lose a lot of money to be reminded of these basic principles.
But I think this is a, this is a teachable moment for the entire crypto industry and the mainstream industry.
And it teaches you that if you're going to have a crypto asset, it needs to be nobody else's liability.
You need to have full transparency to it.
And, and that's what Bitcoin is and that's what FTT was not.
Mike Novagratz was on our air earlier today. You actually gave you a shout out. I just want to play the sound bite.
The fallout will be far, but it's not going to stop the underlying community from holding together.
Certainly in Bitcoin, in Ethereum, there are too many people vested in the success of these communities.
Remember, those communities are decentralized. If Mike Novagratz gets run over by a car, God forbid,
or Michael Seller gets proven to be something he's not, or whoever, Bitcoin doesn't matter.
These centralized tokens, like Sam was FTT, it's a very different ecosystem.
Want to get your reaction to that. And also, other than maybe the price pressures of volatility,
we've seen on the price of Bitcoin this week and the midst of the story emerging.
Does this situation impact micro strategy in any way?
Yeah, so the reason we're excited about Bitcoin is it's something greater than all of us.
We're not betting on a company, we're not betting on a team of individuals, the efforts of others.
We're actually buying into a protocol, which is spreading all across the earth to solve a problem.
Micro-strategy on a roller coaster has been since August of 2020.
In August of 2020, we had to make a choice or else face the inevitable descent into economic misery.
So what's the result of that choice? We put $425 million of our cash into Bitcoin at that time,
and we've been buying Bitcoin ever since.
Here's the result for our shareholders. Our stock is up 38% as of close-up market yesterday,
and the doldrums of the crypto crash.
Bitcoin's up 33%. The S&P was 12%. NASDAQ lost 6%. Gold's down 16%.
Bonds are down 21%. Micro-strategy performance beats every big tech company.
We beat Apple, Google, Microsoft, Amazon, and Netflix.
And so, yeah, it's a roller coaster, but our shareholders are winning.
And we're going to stick with that strategy because it's working for us and our conviction is steadfast.