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EXCLUSIVE INTERVIEW: Michael Saylor Reveals What Went Wrong For Bitcoin... — Transcript

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0:00Hundreds of billions of dollars and 17
0:03years to get here and what we know is
0:05Bitcoin is the dominant global digital
0:08capital network.
0:10So, [music] what is that worth?
0:13Even if only 10% of capital wants to be
0:15digital, [music] then that's a hundred
0:16trillion dollars.
0:20By the way,
0:22how much Bitcoin has BlackRock sold in
0:24the past
0:253 months?
0:27Do you know for every Bitcoin we sold,
0:30other [music] actors in the market have
0:32sold
0:33a thousand X, actually 2,000 X. So, in
0:37the middle of a bear market, Bitcoin
0:40crashed from 120,000 to 60,000 and we
0:43sold 32 Bitcoin. We have bought net
0:45250,000 Bitcoin or something. In what
0:48way are we a systemic risk?
0:51So, Bitcoin was 120,000 8 months ago,
0:54it's 60,000 now. It's sitting around the
0:57200-week moving average now, so there's
0:59a massive base of support, which means
1:02that
1:04By the way, you know who was buying the
1:05ETFs?
1:08A lot of them were [music] the hedge
1:09funds shorting our stock. So,
1:12there were people shorting 25 billion of
1:15>> [music]
1:16>> MSTR and buying 25 billion of IBIT as
1:20the pair trade. What do you think would
1:22happen if we basically sold 250,000
1:25Bitcoin right now?
1:30>> What happens if Bitcoin from here, where
1:33it already lost 50%, [music] goes down
1:35another 50% from 60K to 30K? But on the
1:38other hand as well, what if Bitcoin
1:40doubles again and goes from the 60K back
1:42to 120K? These two scenarios, what
1:45happens to
1:46MicroStrategy, the stock MSTR, and what
1:48happens to stretch?
1:52>> Yeah, uh
1:53>> [sighs]
1:53>> Before I Before I answer, I'll just say
1:55one funny thing, which is
1:57which is in 6 years our company went
1:59from an enterprise value of 600 million
2:02to an enterprise value of, you know, up
2:04to 120 billion and now it's like 80
2:06billion or something.
2:09Not a single positive story in any
2:12mainstream media in the entire 6 years.
2:15>> [laughter]
2:16>> Not not
2:18>> [applause]
2:21>> And then when I became when I became
2:23chairman and Phong was CEO, they're like
2:26Sailor got fired and then they they ran
2:28a bunch of negative stories. Sailor got
2:31pushed out of the company, he's fired
2:33because he because the Bitcoin thing
2:35failed and that was like when we had 2
2:36billion of Bitcoin.
2:38And then when we got to the point where
2:40we had 50 billion of Bitcoin, you know,
2:42I guess two we
2:443 weeks ago, right? Bitcoin trade from
2:4682,000 to 62,000. So So we have a 16
2:50billion dollar mark-to-market loss and
2:53so the story is,
2:56you know, Sailor's Sailor's company lost
2:5916 billion dollars. They basically
3:02revived me, put me back in charge of the
3:05company
3:06and then made me responsible for the
3:08failed strategy, which I thought was
3:10amusing.
3:12But
3:13nobody
3:15and so yeah, so if you have 800,000
3:17Bitcoin and it trades down 20,000,
3:19you'll have a 16 billion dollar
3:20mark-to-market loss. But nobody ever
3:23once asked the question, "Where did they
3:25get the 16 billion dollars to lose?"
3:29Because we started the journey with 250
3:32million dollars of cash.
3:34And of course the story is, a company
3:37with 250 million dollars managed to find
3:39a way to actually
3:41get the 16 to get the 80 billion to lose
3:44the 16 billion. But they will never
3:47write that story. And and the only moral
3:51or lesson of that is no one is ever
3:53going to write the story of your
3:55success.
3:57Like you shouldn't expect it until it
3:59becomes conventional wisdom.
4:01They will write the story the negative
4:03story the cynical story. There's like
4:06endless negative stories forever for
4:09whatever reason like our Bitcoin
4:11strategy failed when we were 2 billion
4:13when we were 5 billion when we were 15
4:16billion when we were 30 billion when we
4:18were 60 billion it keeps failing.
4:20There's never been a positive story
4:22ever. It's
4:24it will always be negative. And
4:27and so you kind of have to craft your
4:29own narrative and you have to have your
4:31own um
4:33you have to have your own distribution
4:34channel for messages because otherwise,
4:37you know, the Peter Schiff's of the
4:39world that will tell you Bitcoin is a
4:41failure at a dollar
4:43will basically have it fail at a dollar
4:45$10 $100 $1,000 $10,000 $100,000. It's
4:48like if if after you got 300 times or
4:521,000 times as big you're still failing,
4:54you know,
4:56you'll never succeed, right? Like
4:59and and I I really think I attribute
5:01that to the fact that
5:03conventional wisdom is everybody will
5:06determine that they will declare you a
5:09success
5:10without thinking about it when it's
5:12conventional. And they will declare you
5:14a failure without considering it when
5:16it's unconventional.
5:18And the the conventional wisdom that
5:21works against you on the way up will
5:23then work to support you once you push
5:26through that barrier.
5:28And prob- probably the danger is
5:30believing any conventional wisdom
5:32because it probably is what causes you
5:35to become corrupted in time.
5:37But back to your other issue. So Bitcoin
5:39was $120,000 8 months ago at $60,000
5:42now.
5:43It's more compelling now. Like it's a
5:46there's it's sitting around the 200 week
5:48moving average now, so there's a massive
5:51base of support right now, which means
5:54that
5:55>> [clears throat]
5:55>> it makes a lot more sense for a risk
5:57averse investor or any kind of
6:00any diversified investor that has a
6:02portion of their portfolio in gold,
6:05equity, real estate,
6:07credit,
6:09and and Bitcoin. It makes more sense for
6:12them to be moving their allocation back
6:14into Bitcoin now, and so you'll see a
6:17reversal in the market. If it were to
6:19fall to 30,000,
6:21Bitcoin the digital capital would be
6:25trading at a discount to its book value
6:27to its to its 200 week moving average.
6:30That would mean that it would be
6:31oversold. You would definitely want to
6:33buy it then. It's at even more
6:36compelling.
6:37The equities that are that are leveraged
6:40on it, like the Bitcoin equities, the
6:42strategies that strive are even more
6:44compelling.
6:46And the credit instruments would be more
6:49compelling. And if you look at Austrian
6:51economics and you consider it's like the
6:54free market is always going to adjust
6:57supply demand. And so when the things
7:01are are under priced, you're going to
7:03see a flow of capital into them. When
7:06they get over priced, you see a flow of
7:08capital out of them.
7:10If you want to
7:11I don't endorse trading strategies just
7:14cuz I think you can get burned by them,
7:16but you know, there are a lot of people
7:18that don't agree with me in the market.
7:20You might be shocked.
7:22There are There are a number of people
7:24that won't agree with me in the market.
7:26And so So there are a lot of derivative
7:28traders, you know, people that will will
7:30trade Bitcoin. And they would trade it
7:32when it's 2x the 200 week moving
7:35average, and they would buy it when it's
7:36at the moving average or or below the
7:39moving average. And so you'll see a lot
7:41of capital will flow into it.
7:43It's It's going to be self-stabilizing.
7:47At the end of the day,
7:49the thing to keep your focus I think we
7:51have pretty good support here. I You
7:53know, I I don't worry too much. I I
7:55generally think if you look at the
7:57history of Bitcoin, it tends to trade to
7:59a premium, a big premium to the 200-week
8:01moving average during periods of
8:03leverage, and then it trades back toward
8:06the 200-week moving average, you know?
8:09And so, it If you're a 4-year investor,
8:12look at the 4 years, plot that, look at
8:15the current spot price, and you can see,
8:18you know, where it is. And I I tend to I
8:20tend to look at the 200-week moving
8:22average as like It's like the book value
8:24of of the network. It's the book value
8:26of Bitcoin. It's the amount of capital
8:28that's been invested on a on the basis
8:32in the asset. So, it serves as a pretty
8:34good floor.
8:36I think uh
8:37Uh and I think that's important. And
8:39then, um
8:41you know, otherwise, uh
8:43if you go If you look back to 2022,
8:46you know, after the FTX crash and the
8:49crypto crash,
8:51you know, there was a point when, like,
8:54our stock, I guess it, you know, it fell
8:57it it went from 120 bucks up to a
9:01up to 1,200. It went up by a factor of
9:0310. And then, in the crash, it fell all
9:06the way back to like 120 or 130 dollars.
9:09So, we had a 90% drawdown.
9:13We had a massive We had a lot of debt,
9:16and we had a lot of Bitcoin. And so, at
9:17that point, we were like
9:20two, you know, right now, we had net
9:22leverage of 10%. Then, we had net
9:23leverage of like 200% or something, like
9:26a a very large
9:28leverage number, like
9:32Yeah, it's a maybe a Yeah. I don't know
9:34if the number is 200%, but it was like
9:35much higher than it is right now. We had
9:37like $2 billion of debt and $2 billion
9:39of Bitcoin, you know, something like
9:41that. So, it was very heavy leverage.
9:44And that was the best time to buy the
9:46stock. People that bought that stock and
9:47the stock rallied 800% and then that and
9:50the next cycle. So,
9:53I think I think that,
9:56you know, like it or not, for better or
9:59for worse,
10:0099.9%
10:02of the capital in the world is not
10:04invested in Bitcoin.
10:06And is not invested in the Bitcoin
10:08derivatives, the equity and the credit.
10:11So, if Bitcoin trades down, it just
10:13makes the equity, the credit, and the
10:15commodity that much more compelling.
10:17You'll have capital drawn in that will
10:19support it back up. And then, you know,
10:22you'll have extraordinary amount of
10:25wealth created in the next bull run.
10:28The
10:29The last point I'll make is it's very
10:31important to to stay focused on the
10:32fundamentals and the fundamentalists
10:34have this right.
10:36You know, uh Bitcoin is economic
10:39empowerment and and it is sovereign
10:41property rights for the world and it is
10:44and it is the dominant digital monetary
10:46network, right? This is a maximalist
10:48idea.
10:49It's a It's a fundamentalist idea.
10:53And if you look at Bitcoin dominance or
10:55crypto dominance over the past 5 years,
10:58uh
10:59Bitcoin was, you know, in, you know, in
11:02the years from like
11:042015 to 2020, it was like 70% of crypto.
11:08And then,
11:10when you had peak leverage with peak FTX
11:14and all the offshore derivatives, it,
11:17you know, Ethereum rallied, Solana
11:19rallied, FTX rallied. There was Dogecoin
11:23rallied, there was Terra Luna, and all
11:25this all this crypto stuff.
11:28Dominance fell to 40%. It was like 41%
11:31of all capital in the crypto capital
11:33market on on a capital basis, not on a
11:36liquidity basis.
11:37And if you look at the last 5 years, if
11:39you look at the percentage of Bitcoin
11:41versus the other crypto tokens, not
11:44including stablecoin,
11:47Bitcoin dominance has gone from 40% all
11:50the way up to about 68 to 70%. So,
11:54nature's healing.
11:56Uh
11:58Bitcoin has emerged as the dominant
12:01crypto capital, really the only crypto
12:04capital network, the crypto monetary
12:07network. Right? No one seriously
12:10thinks that Ethereum is going to flip
12:13the flippening did not come.
12:16Right? There is no Ethereum flippening.
12:18No one thinks Solana, Ethereum, sweet,
12:22BNB, Ripple, any of the other tokens, no
12:26one thinks any of them are going to
12:29supplant Bitcoin as digital money, as as
12:32digital capital.
12:35And so, and and it took us 17 years to
12:38get here.
12:40You know,
12:41our company had to invest 64 billion,
12:44right? And you know, the and the
12:46institutional investors invested
12:47hundreds of billions, hundreds of
12:49billions of dollars in 17 years to get
12:52here. And what we know is Bitcoin is the
12:54dominant global digital capital network.
12:57So, what is that worth?
13:00It's got to be worth 10% of all the
13:02capital in the world. Even if only 10%
13:04of the capital wants to be digital, then
13:07that's a hundred trillion dollars.
13:10And so, what does it matter if it trades
13:1130,000 or 60,000 or 90,000?
13:15It doesn't matter whether it's currently
13:16valued a trillion or half a trillion or
13:18two trillion.
13:20The market need is a hundred trillion or
13:23more.
13:24There is no second best. There's no
13:27competitor. You can't create
13:31anything.
13:32And so, it's just like when Google won,
13:36they won. When Facebook won, they won.
13:38When Apple won, they won. When Coca-Cola
13:40won, they won. When you end up with the
13:43the monopoly in the space, the
13:46franchise,
13:48you're going to have periods of
13:49hysteria,
13:51you know, where there's a panic.
13:54And then And during the panic, you know,
13:56Coca-Cola stock or Apple stock or Amazon
13:59stock or Google stock or New York City
14:01real estate will be cheap.
14:03And then the panic will subside. And
14:06people are like, "What the heck was I
14:07thinking? I mean, I You know, why didn't
14:09I buy that when I Of course, the world's
14:12not The world's not ending. And if the
14:14world doesn't end, then I guess having a
14:17monopoly on something is a good idea.
14:19And And so, Bitcoin's got the monopoly
14:21on digital money.
14:24The world is not ending, and no one's
14:26coming up with a better digital money,
14:28and we know that.
14:30So, this is just a trading opportunity.
14:33Bitcoin trades down, you should buy it.
14:35You know? And And by the way, if you
14:37have no money, it doesn't matter,
14:39because other people have more money
14:41than you,
14:43and they like money, and they will buy
14:45it, and it will trade back up again.
14:47>> It's like Amazon went from 100 bucks to
14:492 bucks at one point, right? And then it
14:51became a [ __ ] 2 3 trillion-dollar
14:54company.
14:54>> It was clear in 2010 that there was no
14:56retailer in the world that could compete
14:58with Amazon.
14:59>> Yeah.
14:59>> It was clear, but it was only clear in
15:012020 that everybody needed Amazon.
15:04>> Yeah.
15:05>> So, a decade before the conventional
15:08wisdom or the consensus was the world
15:11needs a company like Amazon, it was
15:13obvious to an independent thinker.
15:15>> Yeah.
15:16>> And the same is true with Bitcoin. It's
15:18obvious
15:19the world needs digital money and
15:21digital capital.
15:23You know, and and is it 10 years before
15:25everybody agrees with you? Likely.
15:28But as I say, you don't want people to
15:30agree with you. You want them not to
15:33agree with you. You just want to be
15:34right.
15:35>> What I really admire you is what you
15:37achieved even before you got to Bitcoin
15:39because you're a self-made billionaire
15:41and at this point you've built a hundred
15:43billion-dollar
15:45business. I know that less than 1% of
15:47businesses that are valued at more than
15:5010 million and you built a hundred
15:51billion-dollar business. I'm at roughly
15:53a hundred million valuation now. So,
15:55what would be your advice to a young
15:57entrepreneur like me? How did you do
16:00this? How did you scale the business to
16:03such an amazing size?
16:07>> Um
16:08So,
16:10I guess if I look back at my career,
16:13I mean the the first thing is
16:15you want to create a product.
16:18Yeah.
16:19The world doesn't want 10,000 pages of a
16:22book. It doesn't really want you to talk
16:25at it for thousands of hours. It doesn't
16:27want to be educated. It just wants you
16:29to It just wants the answer. So,
16:32everybody wants you to solve their
16:33problem. It's either give me the pill
16:36like this makes me not fat, give it to
16:39me, right? If it's like Ozempic or
16:41something. I want to be rich. I want to
16:43be not fat. I I want the car to drive
16:45itself. I want the
16:47If we could give If you could give me a
16:49teleporter beam, I would take it. You
16:51know, give me something that's very,
16:54very easy that I understand. So, the
16:58best business is normally are just this
17:00really compelling product and service
17:02and and so the second observation I have
17:05is
17:07you know, like everything we ever did,
17:08it's always look at the new technology,
17:10technology that that everyone that came
17:13before you didn't have. So, if you want
17:16to create a business, it's not likely
17:18that you will create a business by using
17:21technology that's 30 years old or doing
17:23any any business model or
17:26any you know, any technique that your
17:29parents used to make money is probably
17:31off-limits to you. So, so don't copy
17:35anything
17:36Let me say it in a snarky way. Don't do
17:39anything that was successful for someone
17:41older than you.
17:43Right? If someone in you know, 10 years
17:45ahead of you or 20 years ahead of you
17:47did it,
17:49it probably won't work for you because
17:52the market is just so competitive that
17:54once an idea click, it's like with
17:57classic rock and roll, like all the
17:59really good classic rock and roll came
18:01from like 1969 to 1970-something.
18:05Sorry if you like 80s stuff, but
18:09you know, it's like why? Because we had
18:11the amplifier and we had the electric
18:13guitar and like within 10 years of
18:15having all the technology, human genius
18:19figures out the stuff. So,
18:22So, I think that all these
18:24all these good businesses when we were
18:26starting, okay, what did I do? I used a
18:29Macintosh computer when nobody in
18:32business used Macintosh's. So, that was
18:34like the new thing. Everybody with a
18:36suit and more money than me used an IBM
18:39computer or a mainframe or a mini
18:42computer. So, we used the new thing. And
18:45then we created graphical interface
18:47software when everybody in the world
18:49used ASCII. You know, no one used GUIs
18:53and that was the new thing. And then we
18:55used internet when nobody used the
18:57internet. And then we used mobile phones
18:59when nobody used mobile phones. So, as
19:02long as you're doing something that no
19:04one else ever succeeded at before, then
19:06maybe you have a chance to succeed.
19:08And whenever you're doing something
19:11whenever you're creating a business and
19:12you're saying, "Well, look, 10 years ago
19:14or 15 years ago they did it." It's like
19:16you're probably going to fail.
19:18So,
19:19if I was doing a business right now, I
19:21would say, "Well, what is new now?"
19:23Digital assets, digital intelligence,
19:27digital communication. I was like,
19:29"Who's Who's Mr. Beast?" Right? I got By
19:33the way, the way
19:35if you ask someone that's 20 years older
19:38than you, "Who is Mr. Beast?" They
19:39probably don't know.
19:42Right? Uh because Mr. Beast created a
19:44new form of uh content on a new network
19:48that was inconceivable
19:5115 years ago.
19:53So, things that were inconceivable are
19:55generally good ideas.
19:57Um
19:58What What you want is you want a
20:01a business idea that's going to go
20:04viral, that's like so cool that everyone
20:06will tell their their friends that they
20:09want that thing, right? And and there's
20:11a litany of them, right? Whether it's
20:13Skype or WhatsApp or, you know, whether
20:16it's YouTube or
20:18or the like, uh and there will always be
20:20more.
20:22But, uh
20:24that's my second piece of advice. My
20:25third piece of advice is if you come up
20:28with a really good idea,
20:30laser-like focus on the good idea, and
20:33then
20:34as soon as it's successful,
20:36assume that you have to work 10 times
20:38harder to keep it successful.
20:41Because uh this is the curse of the
20:4330-something alpha male. This happens I
20:45don't know how old you are, but
20:47>> Yeah, exactly that.
20:47>> But, um
20:49What What Here's Here's the life cycle.
20:51It's not always this way, but and I'm
20:53I'm not saying it isn't the curse of the
20:5530-year-old alpha female, cuz it's the
20:57curse of the 30-year-old alpha female,
20:58too. It's just women are just smarter
21:00than men most of the time, and so they
21:01don't do what I'm about to describe to
21:03you. Which is
21:04in your 20s, you actually want to start
21:08a business or you do something and then
21:10it takes a decade of struggle and then
21:13if you're successful By the way, a lot
21:14of people aren't successful, but if you
21:16are successful,
21:17you get there after about a decade
21:21and then you declare victory and then
21:22you tell yourself you're a genius and
21:25you were born to be successful and then
21:27you think about what's the next hill to
21:29climb. And you're like, well, now that
21:31I've succeeded at this, I have to go do
21:33the next thing.
21:35Like
21:36now that I've succeeded at this, I have
21:38to launch a second. So, in my case,
21:41I was successful creating a business
21:42intelligence software company that was
21:44worth a billion dollars by my mid-30s.
21:47So, then I came up with 10 more business
21:49ideas. And then I was like, I'm going to
21:51launch strategy.com,
21:52alarm.com, angel.com, emma.com,
21:56wisdom.com, usher.com, alert I'm not
22:00joking. These are all real businesses I
22:02created.
22:03Like about 10 of them.
22:06None of them worked as well as the first
22:08one.
22:09But
22:10it you know, it's it's the mistake you
22:12make when you think, well,
22:15the business was successful because I'm
22:18a genius and I was put on Earth to
22:20create these beautiful things and I'm
22:21going to create 10 more. And of course
22:23you're going to say, well, well, Elon
22:24did it. Well, you know, like one guy in
22:27a hundred years did it.
22:30And there's four billion other dudes and
22:32eight billion people on the planet. So,
22:34one person out of eight billion people
22:36did it. You're not
22:38That's a fooled by randomness issue.
22:40You're not supposed to actually divine
22:43your wisdom by looking at the
22:45at the exception to the rule. Uh what I
22:48have seen more often than not is it's
22:51it's hard to be successful and
22:54people aren't successful because they
22:56try to do something that's been done
22:58before. They don't embrace all of the
23:00new technology.
23:02If you If you embrace new technology and
23:05you think originally and you come up
23:07with something which has never been done
23:08and do it in a way that could could have
23:10never been done,
23:11you have a chance.
23:13If you focus, then maybe you succeed.
23:15After you succeed, nine out of 10 times
23:18the person that succeeded tells himself
23:20it was all them and they go off to do 10
23:22more things and they utterly fail.
23:24And and and In my case, I went off to do
23:27the other 10 things and and I lost years
23:30when in fact I should have been invested
23:32in the core business because
23:34at the point that you create the
23:35billion-dollar success or the hundred
23:38million-dollar A hundred million dollars
23:40is very successful. A billion is very
23:41successful. At the point that you create
23:44that success,
23:47you're at the most risky point in the
23:49business because your maintenance
23:51obligation is increasing exponentially.
23:54So, what I would say is
23:55it's like the stoic idea.
23:59Can you buy the Can you buy the boat?
24:01Yes, you can buy the boat.
24:03Can you afford to maintain the boat?
24:05Most people can't maintain it. And then
24:08do you have a lifestyle to enjoy the
24:10boat?
24:11So, a hundred people buy the boat, 10
24:13people, you know, you know, 90 people
24:15run out of money and they can't maintain
24:17it. Like give the boat back.
24:19And so, 10 people can afford to keep the
24:21boat and one person actually finds that
24:24they actually use the boat. And you go
24:26to any marina and there's like 87,000
24:29little boats that are sitting there.
24:31The equivalent in business is can you
24:33create or buy the business or start the
24:35business? Yeah. Can you actually run the
24:39business profitably and maintain it?
24:42Much harder.
24:44Can you grow the business while
24:47maintaining profitability faster than
24:52everybody else in the world?
24:55Right? If you want to actually succeed,
24:58you have to run the business
24:59successfully and grow it faster than
25:02your competitor because
25:05because if you cash cow or harvest the
25:07business,
25:09they will outgrow you and bury you. And
25:12so,
25:13most people they think that
25:16they think like the joy is in the
25:17getting the
25:18Have you ever heard people say, "I just
25:20like to get these things started and
25:21then go to the next thing?"
25:23Okay, that's
25:25That's That's not a good recipe for
25:28business success because
25:31you have to say, "I'm going to do this,
25:33devote my life to this. I'm going to
25:35make it continuously better in every way
25:38than anyone else that chooses to compete
25:40with me in this niche forever."
25:44And and and that's another way of saying
25:47people
25:48they underestimate the maintenance
25:50obligation.
25:52It's 10 times harder to maintain the
25:55business than it is to get into it, and
25:57it's a 100 times harder to prosper, to
26:00enjoy the business while growing it.
26:04And people just under invest in the
26:06relationship. And so, uh
26:09that's my That's my last piece of
26:11advice. Laser focus, commit, marry it.
26:15And and every every iota of your
26:18thinking and energy
26:20ought to be, "How do I make this thing
26:22better?"
26:24That would be uh
26:26That That would be uh virtuous.
26:30And the And the
26:32uh
26:33What is the scourge of all businesses is
26:35dilutive distractions.
26:37It's like My joke is like I I don't
26:40regret my bad ideas because no one's
26:42stupid enough to
26:45focus on commercializing bad ideas. I
26:48regret my good ideas
26:50because after you've had one
26:53you have 10 more good ideas and you have
26:55to ask yourself the question, is this
26:57diluted and distracting to my great
27:00idea?
27:01And I I think most the time in business
27:04if
27:05I I lived to see one there were 100
27:08companies in the business intelligence
27:10space. 99 out of 100 went out of
27:12business or failed or got amalgamated.
27:15Every one of them failed because they
27:17got distracted and diluted. They They
27:20did diluted acquisitions.
27:23They strayed. They lost focus. They lost
27:26intensity. They didn't have the
27:27endurance.
27:29And so business often times is this is
27:31just this commitment to endurance.
27:34And yeah, you know, like how many people
27:36put laser eyes on, right?
27:39Like 5 years ago.
27:41I did.
27:43A lot of other people did. I think that
27:4495% of them took the laser eyes off.
27:47>> Yeah.
27:47>> Like I still have laser eyes. Like I
27:50make a joke. I'll make a joke. It's time
27:52to put the laser eyes back on. A lot of
27:54people
27:55don't realize that I never took them
27:57off. They're like, "Oh, you can Sailor,
27:58put the laser eyes back on."
28:01No, I mean the whole point is I said and
28:02focused on the same thing every every
28:05day for the last 6 years straight.
28:08And people think some
28:10They're like, "Somehow you got lucky."
28:12It's like I mean the irony is everybody
28:15that was in this business before me
28:18Like everybody that was in the Bitcoin
28:19business before me, it's like they never
28:21put the laser eyes on. They took the
28:23laser eyes off and they got distracted
28:25and went off to work on like one of 18
28:27other things and
28:29And success in in business is not that
28:31complicated. It's whoever wants it the
28:33most gets up every single day and thinks
28:36you know, morning, noon, and night about
28:39how they're going to serve the customer
28:42or how they're going to further the
28:44business, they're most likely uh to win.
28:48And uh uh
28:50I'll make one last point, which is
28:53Okay, there's 8 billion people on the
28:55planet.
28:57That means
28:59if you're
29:02the smartest person out of a thousand
29:04people in your school,
29:07right?
29:10There's 8 million people
29:12as smart as you.
29:14Right? When you divide a thousand into 8
29:17billion, there's 8 million people that
29:20are hyper geniuses. If you were one in a
29:22thousand, there's 8 million people
29:23you're competing against. If you were
29:25one in 10,000, there's 800,000
29:28people you're competing with. If you
29:30were the smartest person in a hundred
29:32thousand, there's 80,000 people you're
29:34competing with. There's not 80,000 good
29:36businesses.
29:38So, you think you're smart and you work
29:40hard, it's not enough because there's
29:41someone that's a hyper genius that has
29:43nothing that you have that wants it.
29:47Right? And and and so, if you're lucky
29:49enough to be in a business, you just
29:50have to say to yourself, there is a
29:52person that is the smartest person in
29:55their entire city
29:56that has nothing, that's younger than
29:59me, that's got nothing to lose, that's
30:01got everything to gain,
30:03that that they're going to go 80 hours a
30:07week. You know, like when I left MIT,
30:10I worked uh
30:12I worked uh
30:1570 hours a week, 50 weeks a year. So,
30:173,500 hours a year for 10 years
30:20straight.
30:22And in order to get to the point where
30:24the business was successful, and people
30:27asked me about it, I said, "That was
30:29really easy compared to MIT." You're
30:30lucky. Like that was easy. MIT was so
30:33much harder
30:34than working 30 70 hours a week, 50
30:37weeks a year. It was so much harder.
30:40Like it was like MIT was so hard
30:44that on Friday night we'd walk past the
30:47geek dorm and they'd have the lights on
30:49and we hated them because we're like,
30:51those people are taking they're working
30:53for the three hours between 6:00 and
30:5610:00 or 6:00 and 9:00 on Friday night
30:58and those were the only three or four
31:00hours we took off the entire week and we
31:02hated them.
31:05Cuz we work Saturday, we work Sunday,
31:06Monday, Tuesday, Wednesday, Thursday,
31:07Friday, 16 hours a day we took four
31:10hours off and the geeks were working,
31:11the nerds were working those four hours
31:13and we hated them.
31:15Okay? And my point to you is, however
31:17successful you are, there's a guy
31:20smarter than you, younger than you,
31:22nothing that has nothing that wants what
31:24you have
31:26and they're going to stare at you and
31:27they're going to say you're fat, dumb,
31:28and happy and they want it and you're
31:30going to tell yourself that somehow God
31:32put you on Earth and made you smart and
31:34you don't have to work as hard.
31:37Wrong. You have to work
31:39insanely hard to hold your position in a
31:43market of 8 billion people that want
31:45what you have and have nothing to lose
31:48and can take more risk to get to it.
31:50>> The easy thing is to start a business.
31:52Not hard to start a business. People ask
31:53me, oh, how did you do that? How do you
31:55start a business? Starting a business is
31:56super easy. Everyone can start a
31:57business tomorrow. Staying in the same
31:59business every day for 10 years, how
32:02many can do that? That's the hard part.
32:05So, if you were with everything you
32:07know, all the experience you have in
32:10Bitcoin, in fundraising, in AI, and in
32:13technology, in business intelligence,
32:15with everything you've learned, with all
32:17your network, now you started a new
32:19business from scratch.
32:22What would you do?
32:24>> Um, you know, if I was starting a new
32:26business right now, you would definitely
32:28want to do something with digital
32:29intelligence or digital assets or
32:32digital something, especially if you
32:34didn't have that much capital. I'm not
32:36an expert on
32:38you know, on bio
32:40you know,
32:41bioengineering and pharmaceuticals and
32:43and there's a lot of other areas where
32:45people are in business, but
32:47but I think that given the fact that
32:49we're in the digital asset space and
32:52you're at a Bitcoin conference,
32:55the obvious thing to do is
32:56[clears throat] to combine AI with
32:58digital assets. If I wanted to make a
33:01billion dollars right now, starting from
33:03nothing, if I'm sitting with my best
33:05friend or three people around a table
33:07saying, "How do we create a
33:08billion-dollar business?"
33:10I would think
33:13I want to create some kind of digital
33:16money or digital yield type instrument
33:21based upon digital credit
33:24based on digital capital. So, so,
33:27Bitcoin is digital capital, digital
33:30credit takes a 40 ball asset and strips
33:34it down to four ball and takes a 30 or
33:3740% return and turns it into 10% return.
33:42But the real incredible opportunity, and
33:45I'll discuss this in my keynote
33:47tomorrow, is
33:49is uh there are so many thousands of
33:52opportunities to create digital money
33:54and digital yield. Like Like the first
33:56company that creates um
33:59a Swiss bank account that pays you 6% in
34:03Swiss francs.
34:05What What do people want? They want
34:08risk-free return.
34:10They want fr- What do people want? We
34:12want to be not fat, we want to live
34:14forever, we want a robot to do all the
34:16work, we want the car to drive us,
34:19right? And we want to be rich.
34:22And we want to do it without stress, no
34:25anxiety, no risk, and I want someone
34:27else to do it for me.
34:30Okay? And uh
34:32it's you know and and the great products
34:35I mean literally it's it's like oh yeah
34:37that thing I inject that and it makes me
34:38not fat just get what's in it just give
34:40it to me. Click.
34:43It's like you know it's like give me
34:45give me that thing, right? Um
34:48And so if we just focus upon finance, I
34:52would just say people would just like to
34:54get rich comfortably with no risk. And
34:57so if you go to Japan and you offer
34:59people digital digital money that pays
35:02them 6% in yen, no currency risk,
35:05no market risk, no [clears throat]
35:07volatility. If you go to Europe and
35:09offer people 6 or 8% euro accounts,
35:13it it
35:14I I say this to I've even said this to,
35:18you know, large companies. I'm like,
35:20here's your website. Your website ought
35:22to be you can either have
35:256%
35:2712% or 18%
35:30yield in Swiss francs, euros, or
35:34dollars.
35:36Just click.
35:40Everybody wants to do complicated stuff,
35:42but I just think okay okay well how do
35:45you create
35:4718% yield in euros? Start with 11% yield
35:51in USD, convert the currency to euros
35:54with the currency hedge, borrow the
35:56money at two, three, or four percent
35:58interest, loop it three times, generate
36:0230 plus percent yield, keep 5%, keep 5%
36:06for the volatility and currency hedge,
36:08pass the rest through to the customer.
36:10If you want, give them a one-month
36:12lockup or give them a three-month
36:14lockup. Do you want 24%? You got to hold
36:17the money in for three months. Yeah.
36:20Everybody comes up with complicated
36:22ideas, but by the way and it's a it's a
36:25point I would make to you, like, all
36:27those other things, they were brilliant
36:29and sophisticated and they had like 100
36:32features and they all failed.
36:35It's because people come up with
36:36complicated ideas
36:39with lots of moving parts.
36:41And the one thing you learn in life is
36:44just a simple idea. The first bank in
36:48the UK that gives people 8% yield in
36:52Great British pounds with no volatility.
36:56Like, who wants that? Everybody wants
36:57that.
36:58What What's, you know, what If you're a
37:00saver, you want 8% no risk, no
37:02volatility cuz you're getting right now
37:043%. If you're an investor, you want 16%
37:09maybe you'll agree to lock up the money
37:10for 3 months. Pay me double.
37:13Maybe I want 24%. Pay me triple, right?
37:17How do you do it? It's It's simple to do
37:19it. Go to an AI and say, "I want to take
37:22stretch
37:23and I want to create zero volatility 20%
37:27yield. How much leverage do I need?
37:29What's the cost of capital? How do I do
37:31it? Can I wrap it into a public fund, a
37:33private fund, a bank account, a token?"
37:38I would figure that out. Why Why do I
37:40think it's a big opportunity? Because
37:42you can create digital money in every
37:45jurisdiction and every currency at every
37:48and there are a lot of flavors of
37:50volatility and liquidity preferences.
37:52You can wrap it in different ways.
37:55The AI will show you how to build it and
38:00It's like It's like I I I say this and
38:02it's kind of tongue in cheek, but it's
38:04serious. How do you make money?
38:06Make the money.
38:09Like, make Like, literally make Who Who
38:13made the most money in the last thousand
38:15years? The people that made the money.
38:18The goldsmiths, right? The bankers. The
38:20bankers make the money. If I have a
38:23bunch of gold and I start issuing gold
38:25back credit notes and then I owe and
38:28pretty soon you've got a billion dollars
38:29of gold and you issue two billion
38:31dollars of gold back credit notes, you
38:32just created a billion dollars out of
38:33thin air.
38:35Just making the money.
38:36Um what what we're doing is creating
38:39credit money with STRC.
38:42Strive is creating credit money with
38:44SATA.
38:46But but uh it's uh volatile.
38:50It's got a five volatility and and
38:52volatility is a is a challenge. It it
38:55decreases the appeal.
38:57The third layer, true true uh
39:00non-volatile
39:02digital asset, it's like peg it to a
39:04currency, the yen, the CNY, the euro,
39:07the Swiss franc, the whatever. Peg it to
39:09the currency, no volatility, decide how
39:12much liquidity you want to offer, decide
39:14how much yield you want to offer, and
39:16just go sell it and keep 100 or 200
39:19basis points or 300 basis points, right?
39:23Like I That's what I would do if I was
39:26working a business.
39:28That That's my best idea, but you know,
39:30the other ideas There's a lot There's a
39:32ton of other ideas. Like a robot that
39:34does everything that you want that cost
39:36$20,000 a year. Who wants it? Everybody
39:38wants it. You'll sell a billion of them.
39:40The question is, can you create a robot
39:42that does that works, right?
39:45It's clearly it's it's worth $10
39:46trillion to Nvidia or to Tesla. Will
39:50they try? They will definitely try.
39:53Maybe Apple will do it. I don't know.
39:55So, there's a lot of miracle drugs,
39:57there's a lot of miracle devices.
40:00Um I
40:01I would just leave you with the thought
40:04that Elon Musk is is got this uh quote,
40:08you know, and he said like the biggest
40:10mistake that engineers make is is
40:14improving
40:16a part that shouldn't exist or improving
40:18a function that shouldn't exist.
40:20Like what is the the ideal product is a
40:23product with no moving parts. It's like
40:26like I have this watch.
40:31And you put it on your wrist or like
40:33your little orange bands. If I put the
40:34orange band on my wrist and I become
40:36indestructible cuz I got a force field
40:38and and nothing can hurt me.
40:43Right? The personal force field or how
40:45about the one where where it it just
40:47prevents you from getting sick, aging,
40:49dying, or being hurt?
40:52Well, how many moving parts? None.
40:54Do you want to buy that? Of course you
40:56do.
40:57And you know, what's an example of that?
41:00Uh
41:01any product that you buy once in your
41:04life that works forever.
41:06Okay, an insurance policy.
41:09It's like I bought the insurance policy.
41:11Well, what does it do? Actually, kind of
41:13nothing, but but somehow I pay for it
41:16and the insurance company sits back and
41:18collects money forever, right? And
41:21is there any user error?
41:23Right?
41:24It's impossible to have user error,
41:27right? It's just I just bought it.
41:29The whole idea of digital credit is
41:31well, how does it work? Well, you buy a
41:33share for $100, it pays you forever.
41:36Well, what do I have to do after I I
41:38bought it? It took 10 seconds and what
41:40do I do for the next 100 years? Nothing.
41:43So
41:45the real appeal
41:46of digital intelligence, in my opinion,
41:49is there are a lot of things in the
41:51world that have a lot of moving parts
41:53and they're gadgety, like the phones
41:56that have buttons and
41:58you know, everything has a lot of parts,
42:00you know? And
42:02we're getting to the point where you can
42:04just get rid of all the parts and just
42:07have the thing do
42:09the thing, right?
42:11And yeah, the if you put the glasses on
42:14and the glasses look all around you and
42:16the glasses internalize everything and
42:18the glasses answered the question,
42:20"Who's How many people are sitting in
42:21the room right now?"
42:23And 497. It's like
42:26I just want instantaneous friction-free.
42:30It's better like, "Okay, how many people
42:32in the room right now? 497. Okay, send
42:34them all like a Bitcoin. Okay, done."
42:37Right? Like
42:38instant friction-free empowerment. And
42:42um
42:43those products will go viral. They're
42:45they're they're not necessarily easy to
42:48build, but some of them are. There are a
42:49lot of products.
42:51What One thing I note, you know, the we-
42:53the reason that we were successful in in
42:55business intelligence is is we created
42:58systems that that would uh scan full
43:02relational databases and they would give
43:04you analytics
43:06against, you know, billions and hundreds
43:09of billions of records
43:11answering questions,
43:13you know, with a sophisticated
43:15relational calculus.
43:17And if you if you needed it, you know.
43:20If you know, you know. If you needed it,
43:22like you work in market research, you
43:24know that you needed it or you're a bank
43:26credit manager. So, the customers knew
43:28they needed it. But all all of the
43:31competitors we had didn't think it was a
43:34good idea.
43:36It's like it's a product that your
43:39customer needs
43:41or what I joke is is something everybody
43:43needs
43:45nobody can stop, but nobody understands.
43:48Right? And so
43:50I could I used to joke, I could bring
43:53all of our competitors into a conference
43:55room. I could lecture them for 8 hours
43:57on what our product did, explain it in
44:00minutiae detail,
44:02and they would look at me at the end of
44:03the 8 hours and say, "That's a bad idea.
44:06Why would anybody want that?
44:09And it's like it's not a question of
44:11keeping the idea secret. Literally
44:13everybody that looked at it would have
44:15said, "I'm not going to do that." And by
44:18the way, our business today is exactly
44:20that, right? Like I can literally say
44:23we're creating digital credit on top of
44:25digital capital to give people
44:28to create digital money to slurp up $30
44:32trillion of capital and we can basically
44:36generate $20 billion of of
44:40income with 12 people,
44:43you know, in a year.
44:45And everybody's like, "Well, why would
44:46you want to do that?"
44:48That's stupid.
44:49That'll never work.
44:51I could you know, I could even do it you
44:53know, like we had a $500 million company
44:56and now we're like 80 billion and people
44:58are telling me online every day of my
45:00life, "You're stupid."
45:02>> [laughter]
45:03>> It's not going to work.
45:03>> I'm like like
45:06Wait a minute, we made like $80 billion,
45:08but you're stupid. Why would you want to
45:09Bitcoin went from 150 billion to a
45:12trillion. That's stupid.
45:14And and so the best ideas are ones that
45:18are innovative enough.
45:21They use a new technology
45:23and they have a new
45:25We're creating credit money. When's the
45:27last time you did it? Well, the gold
45:28people did it 300 years ago. No one did
45:30it in the last 100 years. Okay, you're
45:32stupid.
45:33Okay.
45:35It's not you know, it's not
45:36unprecedented. It's just you haven't
45:38seen it in your life, but that doesn't
45:40mean that it isn't
45:42You know, STRC is the first dividend
45:44bearing stock that had a variable credit
45:46spread. That's stupid.
45:48There's 25,000 dividend bearing stocks
45:51that are more valuable that have a fixed
45:52credit spread. It's just Well, why did
45:55you do it? Well, you know, because it
45:57seemed like a good idea at the time. So
46:00I really think the killer the killer
46:02businesses and I think Peter Thiel says
46:04this a lot. He's like, "The best
46:05businesses are these businesses that no
46:07one ever conceived of. It's like, that's
46:08stupid. That's impossible. Why would you
46:10do that?"
46:12And and of course the iron ironic ones
46:14are the ones where even 5 years after
46:17you've done it, people still think it's
46:18a stupid idea. And and Apple was like
46:22that with the iPhone. People thought it
46:23wasn't going to work. 5 years after they
46:25did it. Amazon
46:27for a decade after Amazon was like doing
46:30home delivery, everybody on Wall Street
46:32said, "That's a stupid business. They'll
46:34never make money on that. That doesn't
46:35make sense." With streaming video at
46:37Netflix, they said the same thing about
46:39it.
46:40You know, so
46:41what you want is you want to do
46:44something which is truly innovative that
46:47that your parents never could have done.
46:49And if conventional wisdom is, "You're
46:51out of your [ __ ] mind."
46:54You know, then then it might work. And
46:57and and the question really is
47:00well, how do you get 5 years or 10 years
47:02so that you can actually build a
47:04franchise without getting copied by
47:06people with more money and power and
47:08talent you. Do something that they're so
47:10afraid of that they
47:12like they recoil in horror.
47:15Like if you want to copy us, take a
47:16hundred billion dollars, buy a hundred
47:18billion dollars of Bitcoin, take the
47:20company public, and then sell the credit
47:21instruments. Like, what are you kidding?
47:24Like, by the way, I've tried to convince
47:26companies to buy a billion dollars of
47:28Bitcoin for 6 years. You know how hard
47:31it is to get anybody to buy a billion
47:33dollars of Bitcoin? Insanely difficult.
47:37And so we just go do something that
47:39requires like a hundred billion dollars.
47:41And so so because they think you're just
47:44so crazy, they're not going to chase
47:46after you. And because they're not going
47:48to chase after you, you get to go you
47:51get to go from being the small player
47:55with none of the assets in the space to
47:57being the bigger player
48:00because you had the courage
48:02and the clarity
48:04and the conviction
48:06to go to someplace nobody's gone before
48:09in order to in order to
48:11cars will never drive themselves. That's
48:13crazy.
48:14Oops, it looks like they're going to
48:15drive themselves.
48:17You know, yeah, you just have to go
48:19somewhere that's a good place where
48:21where customers will be happy that they
48:24want that magic product and you just
48:26have to have the courage to go there
48:29and if you go there
48:31the first 3 years, they can still crush
48:34you. Like people could still come in
48:35with more capital if they wanted.
48:37But if it's novel enough
48:40>> [snorts]
48:40>> you could literally go on television
48:42describe to everybody in the world what
48:43you're doing and they'll be like, you're
48:45crazy.
48:46We're not doing that.
48:48And and and that's why you'll be
48:50successful, I think. To agree with you,
48:52you just want to be right.
48:55>> Yes, sir. Q&A, who has questions?
48:59>> [snorts]
49:00>> Yes, get up please. You get you'll get a
49:02microphone one second.
49:07Hello. Um yeah, I have my question is
49:11why break the streak now and why 32 and
49:14not 21?
49:19>> Um so why do we sell 32 Bitcoin?
49:23We
49:23We sold 32 Bitcoin because over the
49:27course of a year
49:30if we're able to sell Bitcoin to fund
49:33the dividends on the credit, the credit
49:36becomes more credit worthy. If we're
49:39able to sell the Bitcoin to actually
49:41support the equity, the equity premium
49:43expands. If people
49:46if we take the position that we will
49:48never sell the Bitcoin, then we end up
49:51with $60 billion of an impaired asset.
49:54And if we impair our own asset, it gets
49:56marked to zero by the credit rating
49:58agencies. And it gets marked to zero by
50:00the credit investors. If I literally
50:02said to you, I promise to never sell
50:05Bitcoin, then the short sellers of the
50:08stock would say, he's basically got to
50:10sell the stock. And so I can sell the
50:12stock with impunity even if it trades at
50:14a 95% discount to NAV. And that means
50:17they would short the stock to $1 a
50:19share. And if the short sellers thought
50:21that they they could do that without
50:23fear,
50:25then they would allocate $100 of capital
50:28to do it. And if they did it, then my
50:30long equity investors would say, why do
50:33we want to hold a stock that's going to
50:35a dollar a share? We'll just sell it.
50:37And so the equity investors in the
50:39equity capital markets would walk away
50:41from MSTR if I refuse to defend the
50:45stock. It's It's like what if I said to
50:47you, is it okay if I steal all of your
50:49Bitcoin? coin and will you just give it
50:51to me without a fight? And you said,
50:53that is fine. I won't fight.
50:56You know? Then we would just take your
50:57stuff.
50:58Right? And so if we if we refuse to
51:02defend our equity, then the equity will
51:05go to zero. If the equity goes to zero,
51:09then I can't sell equity to pay the
51:10dividend. If I promise not to sell the
51:12Bitcoin to pay the dividend and I won't
51:14sell the equity to pay the dividend,
51:16then the people holding the credit
51:18instrument won't get paid. The The
51:20credit will go to zero. I can't sell the
51:22credit. So another way to say it is, if
51:26I'm willing to use my capital in order
51:30to support the credit dividend or to
51:33defend the equity, the credit and the
51:35equity markets will abandon the company.
51:38If the credit market abandons the
51:40company,
51:41then the then the business can't
51:43generate
51:45um a Bitcoin gain. If I don't If I sell
51:48$10 billion of credit, we make 10
51:49billion a year or 20 billion a year. If
51:52If the equity market thinks I can
51:54continue to do that for a decade, they
51:56can value the company at $200 billion.
51:59Then I can sell 50 billion of equity.
52:02Then I can sell another 100 billion of
52:04credit. Then I can buy $300 billion of
52:06Bitcoin. Then the Bitcoin goes to a
52:08million a share. A million a coin,
52:10right? So, it's pretty obvious why you
52:12want the credit to work. It's pretty
52:15obvious why you want the equity to work.
52:18And so,
52:20if I didn't buy $20 billion of Bitcoin
52:23each year,
52:25would that be worse than selling 32
52:29Bitcoin a year?
52:33It's like
52:35Yeah, or another way to say it is
52:37>> [snorts]
52:38>> is, um,
52:39we're generally, uh, in a situation
52:42where we have, uh, we have to show that
52:45we'll defend the credit and we'll defend
52:47the equity in order to achieve the
52:50confidence of the credit investors and
52:52the equity investors. If If If all we
52:55did was say, "We're going to never sell
52:59Bitcoin." The equity would collapse, the
53:01credit would collapse, and the company
53:02would stop raising any capital. And
53:05instead of buying
53:07$25 billion of Bitcoin a year, we would
53:09buy $0 of Bitcoin a year. And so, if
53:12that happens for 10 years in a row and
53:13we stop growing 30%, that means instead
53:16of buying $500 billion of Bitcoin over
53:19the next 10 years, we'll buy $0 of
53:20Bitcoin. And that means the price of
53:22Bitcoin will be
53:2470,000 instead of 700,000. So,
53:28what's best for Bitcoin?
53:30Clearly, for us to make it go to a
53:33million a coin. And we can't You can't
53:36make it go to a million a coin without
53:40money, right? I I I say
53:43the
53:45the war to determine the future of money
53:47is going to be fought and won with
53:50money.
53:52Right? So, we need capital from the
53:54credit markets and the equity markets.
53:57You have to respect the credit markets
53:59and the equity markets. So, the logical
54:02thing for a company to do
54:05is
54:06you sell a billion of credit, you buy a
54:08billion of Bitcoin, you invest it, the
54:11Bitcoin appreciates, and then
54:13if it's in the best interest of the
54:15company to sell the equity at a premium
54:18to the Bitcoin to pay the credit
54:19dividend, that's what you do. And if
54:21it's in the best interest of the company
54:23to sell highly appreciated Bitcoin to
54:25pay the credit dividend, that's what you
54:27do.
54:29And uh
54:31you know, why
54:32why would I not give this advice to you
54:35as the retail investor or the
54:37individual? It's like, you're not
54:39running a public company selling credit
54:41instruments and managing tax
54:43obligations,
54:44you know, and equity investors. If
54:46you're a family or an individual,
54:49don't sell your Bitcoin. Keep the
54:51Bitcoin unless you're going to go Yeah,
54:53you know, I get that. Right? There to 8
54:55billion people By By the way, to myself,
54:59you know, I haven't sold my Bitcoin. I'm
55:02not selling my own Bitcoin. But the
55:04point is, I'm not issuing credit
55:06instruments with a dividend that gets
55:08paid, you know, twice a month to credit
55:11investors with the S&P credit rating
55:13agency recommending to insurance
55:16companies, endowments, and hedge funds
55:18whether they should buy the credit.
55:21Right? And so, a corporation,
55:24you know,
55:25a corporation ought to manage its
55:29operations to the benefit of its
55:31shareholders because that way you can
55:33raise capital. And if the purpose of the
55:35company is to buy Bitcoin and if the
55:38money's coming from credit investors and
55:40equity investors, then you have to give
55:43them what they want and what the credit
55:45investors want
55:47is they want to know that we're able to
55:50sell Bitcoin to pay that credit
55:53dividend, otherwise their credit's
55:54worthless. And what the equity investors
55:57want to know is that the credit
55:59investors trust us and the credit
56:01investors want to buy the credit,
56:03otherwise the equity doesn't trade at a
56:05premium. And also So, the equity
56:08investors want the credit business to
56:10work.
56:12And the And the equity investors also
56:14want us to protect them against the
56:16short sellers. If a short seller were to
56:19short my stock to a dollar
56:23and if I could sell a thousand Bitcoin,
56:25buy the stock back, bankrupt the short
56:27seller, and then make all the equity
56:29investors rich
56:32and I refuse to do it because a troll on
56:34Twitter said
56:35You said never sell your Bitcoin.
56:37Like, okay, fine. I'll destroy a billion
56:39dollar a hundred billion dollar company
56:41so that I don't sell my Bitcoin. You
56:43know? Well, the point is I said to By
56:46the way, I said to you never sell your
56:48Bitcoin. I never said that the company
56:51wouldn't sell its Bitcoin and anybody
56:53that's been listening to our earnings
56:55calls or reading our disclosures or has
56:58half a brain knows for the last five
57:01years we've been very clear that of
57:03course we sell the Bitcoin if we have to
57:05as fiduciaries. So, this entire thing is
57:09really just a Twitter trolling exercise
57:13because it's because if you're a Twitter
57:15troll, it's very convenient to say, "Ha,
57:17you said never sell the Bitcoin and then
57:19you sold some." And that's very
57:21interesting and it's not very
57:23interesting to have a discussion about
57:27how you sell a hundred billion dollars
57:30worth of digital credit or a trillion
57:32dollars worth of digital credit and
57:35create a multi-trillion dollar publicly
57:37traded
57:39treasury company. Right, that that is
57:42not in their wheelhouse. They're not
57:44going to get at that, but but I
57:46guarantee you that
57:48if [clears throat] you created a gold
57:49treasury company and you
57:53invested a hundred billion dollars of
57:54gold and you issued gold back credit and
57:56then you told everybody you would never
57:57sell the gold to pay the dividend, no
57:59one would buy the credit. And if you
58:01have an equity an equity capital company
58:05and then you say and you should credit
58:07against it and you say,
58:08"If you went to your bank and you said I
58:10want to borrow a million dollars and
58:13I'll pledge a ten million dollar equity
58:15portfolio, but I'm unwilling to sell the
58:17equity to pay back the debt if you ask
58:20for it, they wouldn't give you the
58:21loan."
58:23And it's kind of common sense. It's like
58:25if you went to the bank and said I would
58:27like a million dollars to buy a house,
58:30but I'm not willing to mortgage the
58:31house. I'm not willing to pledge the
58:34house as collateral. Just give me the
58:36money.
58:37You wouldn't get the money. And so
58:41this is not controversial with anybody
58:44who's a rational investor or a
58:47thoughtful person. Everybody knows you
58:50have to pledge the collateral in order
58:52to get the credit. And if the business
58:55is issuing the credit and it's unwilling
58:57to pledge collateral or use the
58:59collateral to back credit, the business
59:01is worthless.
59:03And if the business is worthless, we
59:05can't be the biggest buyer of Bitcoin in
59:07the world. And so what we're doing is
59:10good for Bitcoin, good for the credit,
59:12it's good for the credit markets.
59:15It's good for the equity markets. It's
59:17good for the capital markets. It simply
59:20requires
59:22that you hold multiple complex ideas in
59:25your head at the same time.
59:27>> Last question? Yep.
59:29>> Hi.
59:30What would you say to the people that
59:32said that strategies are systemic risk
59:35for Bitcoin?
59:38>> Yeah, I I I just don't see how it could
59:40be a
59:41By the way,
59:43how much Bitcoin has BlackRock sold in
59:45the past 3 months?
59:50Like, do you know for every Bitcoin we
59:52sold
59:53other actors in the market have sold a
59:55thousand, right? A thousand X. Actually,
59:582,000 X. So, in the middle of a bear
1:00:02market, you know, Bitcoin crashed from
1:00:05120,000 to 60,000 and we sold 32 Bitcoin
1:00:08and the same time we bought about
1:00:10250,000 Bitcoin. So, in the middle of
1:00:13the bear market, you know, we have
1:00:15bought net 250,000 Bitcoin or something.
1:00:18In what way are we a systemic risk?
1:00:21Right?
1:00:22Right? In fact, we're the ones that are
1:00:24keeping the market from crashing more.
1:00:26We're the We're the biggest buyer of
1:00:28Bitcoin this year. So, we're not a risk
1:00:31to the market. We're actually a shock
1:00:33absorber to the market. Our equity and
1:00:36our credit is keeping Bitcoin from
1:00:38crashing from 120,000 to 30,000.
1:00:42Right? If we weren't here in the market,
1:00:46you would see What do you think would
1:00:48happen if we basically sold 250,000
1:00:51Bitcoin right now to the other
1:00:53investors? If we had actually dumped
1:00:55250,000 Bitcoin, the people that dumped
1:00:5975,000 Bitcoin out of BlackRock would
1:01:02have sold another 75,000.
1:01:04The market would be sitting at 20,000.
1:01:07And so, no, we're not the We're not a
1:01:09systemic risk. We're We're a systemic um
1:01:13systemic uh source of power
1:01:17and robustness. We're a We're a
1:01:19supporting structure for the market
1:01:23right now.
1:01:24Our company is damping the volatility
1:01:27and creating the liquidity, holding the
1:01:30price, right? We spent $64 billion in 5
1:01:35years. What if we hadn't spent $64
1:01:37billion?
1:01:39If we hadn't spent the 64 billion, you
1:01:41think the people at the ETFs would have
1:01:43spent 100 billion?
1:01:45Because by the way, you know who was
1:01:46buying the ETFs?
1:01:48A lot of them were the hedge funds
1:01:50shorting our stock. So, there were
1:01:52people shorting 25 billion of
1:01:55MSTR and buying 25 billion of IBIT as
1:01:59the pair trade.
1:02:01So, in fact, what we've been doing is
1:02:04attracting derivative capital,
1:02:07uh credit capital,
1:02:10equity capital, commodity capital,
1:02:13and we're always counter-trading the
1:02:15market, right? We're always buying when
1:02:17other people are selling, when no one
1:02:19else would buy, we're the ones that are
1:02:21buying, when the market is overvalued,
1:02:24when when Bitcoin is trading 120,000,
1:02:26we're buying, right? We're actually the
1:02:29ones that are creating the liquidity.
1:02:31So,
1:02:32so I economically, I don't think we're a
1:02:34systemic risk, I think we're a systemic
1:02:37asset to the market. Politically,
1:02:41you know, we're the ones that got fair
1:02:43value accounting for for Bitcoin.
1:02:46Without it, no no public or private
1:02:48company on the GAAP standard could even
1:02:50buy it,
1:02:51right? And so, we're actually advocating
1:02:55to fix the accounting, we're fixing the
1:02:57credit, we're fixing the tax, we're the
1:03:01ones advocating to avoid an unrealized
1:03:03capital gains tax on Bitcoin for
1:03:05institutional holders,
1:03:07right? We're the ones standing between,
1:03:11you know,
1:03:12the Bitcoin community and any powerful
1:03:16politician that might decide just to
1:03:18pass a law depriving you of the right to
1:03:21have it.
1:03:23Right? So,
1:03:25and we're not the only ones, right? I
1:03:27mean, Coinbase is fighting that fight,
1:03:30BlackRock is fighting that fight. But at
1:03:33the end of the day,
1:03:35in China, by the way, we're not in
1:03:37China. China makes it illegal to buy
1:03:39Bitcoin or sell it
1:03:41in China. There's no BlackRock or
1:03:44strategy in China. So,
1:03:47what happens when someone that doesn't
1:03:50like you puts a one-paragraph,
1:03:53you know, piece of language in the next
1:03:55appropriations bill that makes it
1:03:57illegal for you to own Bitcoin or hold
1:03:59your private keys or taxes at a 20%
1:04:02unrealized gains or just takes it away
1:04:04from you?
1:04:07Right? Who do you think's going to fix
1:04:09that problem? And the answer is
1:04:12a large publicly traded company, whether
1:04:14it's Coinbase, whether it's BlackRock,
1:04:17whether it's whether it's strategy,
1:04:20you know, whether it's, you know,
1:04:22Fidelity, not public, maybe it's it's
1:04:24going to be a bank, Morgan Stanley or
1:04:27Charles Schwab that has a
1:04:29Bitcoin-related business,
1:04:31they're going to pick up the phone, call
1:04:33a senator, and say, "This is an unfair,
1:04:36inappropriate, ill-advised measure.
1:04:39Please fix this."
1:04:41Right? And it's it's not going to be a
1:04:43Bitcoin fundamentalist. It's not going
1:04:45to be a crypto anarchist. It's not going
1:04:48to be a a nim on Twitter
1:04:52that actually's tweeting from an account
1:04:54that's XXY something something, you
1:04:58know, Satoshi was here, right?
1:05:01They're not going to provide that
1:05:04political protection, the economic
1:05:06protection.
1:05:07Yeah, you know who actually paid in
1:05:10order to defend the community and the
1:05:12Bitcoin devs against uh Craig Wright's
1:05:15lawsuits.
1:05:16Us.
1:05:18Block, you know, I mean
1:05:20>> [applause]
1:05:22>> By By the way, that to give full credit,
1:05:25right? I mean, Jack Dorsey, Square,
1:05:27Block, you know, lead that was a COPA
1:05:30initiative. But, the people that are
1:05:32putting up the money are are Coinbase,
1:05:36our strategy, you know, our Block.
1:05:39They're They're these publicly traded
1:05:41companies that are actually funding the
1:05:44legal advocacy, the political advocacy,
1:05:47the accounting advocacy,
1:05:50the tax advocacy,
1:05:52right? And the economic advocacy. We're
1:05:56the
1:05:57Why do you think those banks are
1:05:59actually allowing you, you know, to buy
1:06:02Bitcoin or allowing anybody to buy
1:06:04Bitcoin? It's like we're the ones going
1:06:06to Morgan Stanley and JP Morgan and City
1:06:11and Bank of America and Charles Schwab,
1:06:14right? And fill in the blank. Every one
1:06:17of those it is a corporation
1:06:21that's on the Bitcoin standard or
1:06:23supports Bitcoin and they're all
1:06:25fighting in order to get in order to
1:06:29legitimize Bitcoin as an asset.
1:06:33And so, it you know, if you're a if
1:06:35you're a fundamentalist or an anarchist
1:06:37and you just hate corporations and you
1:06:39hate banks and you hate anybody, you
1:06:42know,
1:06:43that wears a suit,
1:06:45well,
1:06:46when the suit coiners disappear,
1:06:49it's going to be illegal for you to
1:06:51actually own, trade, custody Bitcoin,
1:06:55right? And And if you think it doesn't
1:06:57happen, go to Cuba, go to North Korea,
1:07:01go to China,
1:07:03right? And then make all of your
1:07:05arguments there and see how it works
1:07:06out. We
1:07:08We We have a free
1:07:11capitalist system because there are
1:07:14advocates that are fighting
1:07:16every day
1:07:18in every venue. We're fighting in
1:07:20mainstream media. We're fighting on
1:07:22Capitol Hill. We're fighting in the
1:07:25court systems.
1:07:27You know, it's like someone wants to
1:07:30There's a lawsuit in New York you might
1:07:31have read where someone wants to
1:07:32basically seize all of the all Satoshi's
1:07:35wallets as unclaimed property to the
1:07:38city of New York.
1:07:40It's not an anonymous, you know, crypto
1:07:43anarchist on Twitter that's going to pay
1:07:45to actually fight that lawsuit, right?
1:07:48And go to the mayor of New York and go
1:07:50to the circuit court and appeal up to
1:07:52the Supreme Court to fight those things.
1:07:54Those are suit coiners. They're
1:07:56corporations that are doing that. So,
1:07:59no, I I do not accept for one moment the
1:08:03fact that we're a systemic risk. We are
1:08:06simply the extension of the Bitcoin
1:08:09network into uh the entire free market
1:08:13system.
1:08:14And what you ought to hope for is that
1:08:17millions of companies, hundreds of
1:08:19countries,
1:08:21thousands of municipalities,
1:08:23hundreds of thousands of institutions
1:08:26all adopt Bitcoin because they're the
1:08:28ones that are going to legitimize
1:08:31the asset, commercialize the asset, and
1:08:34defend the asset against your your
1:08:37enemies. So, when when someone decides
1:08:39they just want to put an unrealized
1:08:41capital gains tax of 100% on Bitcoin
1:08:43because they're mad at something that
1:08:45somebody on Bitcoin Twitter said,
1:08:48right? You're not going to You're not
1:08:50going to tweet back at them.
1:08:52Right? [snorts] I mean, tweeting at
1:08:54people is not a way to defend your
1:08:56rights, trust me. That's not the way it
1:08:59works. You're literally going to have to
1:09:01resort to political or legal or economic
1:09:05means, and that means you're going to
1:09:07need people that don't reject legal
1:09:11power, political power, political
1:09:14activity, and economic activity as a
1:09:16means to succeed in this world.
1:09:20>> Thank you so much, Michael, for
1:09:21everything you're doing for the
1:09:22industry. Thank you for the time and
1:09:24advice, and thank you all for listening.
1:09:25Have a good day.
1:09:27>> [applause]

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