What's up, everyone? This is Anthony Pompeo. Know most of you know, me as pump, you're listening to the pump podcast. Simply the best podcast out there. Now. Let's kick this thing off, Michael Sailors, an entrepreneur and business executive who co-founded, and leads microstrategy a company, which provides business intelligence, mobile software and Cloud Based Services. He's become well known in the Bitcoin Community for using the company's balance sheet to purchase more than seven billion dollars in Bitcoin. In this conversation. We discussed Bitcoin microstrategy's Bitcoin allocation.
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let's get this episode Michael. I hope you guys enjoyed this
one. Anthony pom playing. Ah, no runs pomp Investments, all views of him and the guests on his podcast are sholay their opinions and do not reflect the opinions.
Means of Pop Investments. You should not treat any opinion expressed by pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy. But only, as an expression of his personal opinion, this podcast is for informational purposes. Only. Good morning everyone. Welcome back to the best business show. I'm super excited. Today. We have a very special episode myself and Michael sailor sitting down for a to our in-person conversation, Michael. And I recorded a podcast.
A step assaut dude about a year ago right after he announced that he was going to put a very material portion of his company's balance sheet into Bitcoin. And so maybe Michael, we can start with kind of a one-year update from when you actually decided to make that decision and how things have been going so far with microstrategy.
Sure. Well, if you roll the clock back to July, we had 500 million dollars.
Capital in our treasury. We were holding short-dated treasury Securities and generating effectively, like 20 basis points of yield on it. We've seen a case shape recovery Wall Street came back with a vengeance Main Street was was flat on its back. And it was clear. There's monetary inflation. So we decided that we were going to lose a large.
Each portion of the 500 million in purchasing power of we didn't do something, my forecast then was probably like 25 percent inflation. Like and you could have got there just by looking at the SP index. So I thought, you know, 500 million minus 25% like losing a hundred and twenty five million dollars. In 12 months, is kind of like losing money at 2 to 3 x, the rate that the 2,000 people in the company were making money. So,
Either needed to give the money back to the shareholders, or we needed to invest in something. So, you know, the thought was, well, if we're a company strong, Main Street companies, struggling against all the lockdowns with all the uncertainty and we are doing it - 500 million dollars. Yeah, it feels like a university giving up its endowment as it goes into a crisis, right? So the D capitalizing the company it was a way.
A way to give the 500 million of shareholders. They would have put in the S&P 500, and they would have got 34 percent on it. If we had done that, but we would have an Essence left, our ourselves defenseless without any competent. So that was one strategy. The second was invested all
I would have bought 500 million worth of bitcoin. If if I was a private company. I just would have walked out bought all 500 million. I would have done it. It whatever ten thousand dollars a coin but it's a public company. You got to think about your outside shareholders and you can't, it's not like there's 10. You can't just go to the tent of masking, what they want to do and get their buy-in. When you're a public. You've got a shifting set of outside shareholders that are changing every minute of the day, when the stock market is,
Open. So the way that you actually handle this is a bit more more sophisticated. What we did is we transparently we Telegraph that we were looking at this, our first press release was an announcement that we were going to buy back. 250 million dollars worth of our stock over the course of 12 months and we were going to invest 250 million dollars of our capital in hard assets. And we said,
Ed. We're looking at everything under the sun and Bitcoin was one of the things. So I My First Love of the Bitcoin Community was the way that I knew I liked all the bitcoiners was was one day later. Some cyber Hornet. Some Bitcoin or goes microstrategy is considering buying Bitcoin with 250 million dollars now as Bitcoin merge in there with gold? Silver Commodities, Equity property, real estate, anything you could have imagined but the Bitcoin community,
The immediately picked up on that and I don't know how they do that. Right? There must be scanning for this. Nobody else picked up on it. The stock was trading a hundred and twenty dollars a share.
A week goes by literally you announce. You're going to spend 250 million dollars and buy your stock bike. You think it would move. Nope, crickets.
But the market had a week of notice and then a week later. We stepped it up into the next gear, which is okay. We're going to buy 250 million dollars worth of bitcoin. We made the decision. We're not splitting and across six assets. Right? And it's good thing we did right? Because Bitcoins up three hundred thirty two percent in 12 months. Gold is down 7%. If we split it, 50/50 hundred twenty-five million of gold, a hundred, twenty five million of Bitcoin, right? It would have cost us.
Billions, if we'd gone all gold, it would have cost us many, many, many billion times will come back to that in a second. So we had to do something with the question is what? So we just pick the coin, we made the decision, but we thought this is going to be jarring. For some people. Stock is around 120 to the time, right? To put this in perspective. The company's 500 million dollar Revenue generator generating, cash flow. And we have more than 500 million in cash and about
Ten million shares. So the company's trading one times Revenue plus cash.
We get back all the cash. The company trades at one times Revenue. In the stock goes to 60 bucks a share.
All right. So we're like 122 no one's really paying attention. But we said well, maybe people think this is offensive. They're not going to like this or too risky. How do you actually orange pill every one of your outside shareholders at the same time? Well, you can't. So the next best thing is we just offered to buy them out. So the idea is, if you don't like this, we're going to buy buy you out. We're going to post 250 million dollars to buy back shares at a premium. So, we
I offered to do the by back it up to a hundred forty dollars a share, which is, you know, buyout premium. If you don't like it, then you sell your shares back to us at a profit. We wait 20 days. So the market trades for 20 days and, and on the first week, the markets trading on 135 like people. So, they're not even, they're not even quite sure about the bio then after after a while. They start thinking. They're like, well, if I can put it back to the company at 140.
Then presumably, maybe it's worth more. So the stock trades up a bit past the 140, and at the end of the tender period, we have about 60 million dollars worth of shares tendered. Everyone that didn't like the strategy of 20 days of selling to the open market. Have you sold the knee open market above 140? Then why wouldn't you? And if you're still holding the shares, at the end of the tender period and you don't like the strategy you saw into the tender, so the result of the Dutch auction.
In is we had a hundred and seventy five million dollars of extra capital.
You know, we thought about it. We put it another press release. Okay, this is our primary treasury Reserve asset. So the first Notch was this is a treasury Reserve asset. The second step is this is the primary treasury Reserve asset that we bought a hundred seventy five million more Bitcoin. So that point we're up to 425 million. The first tranches, and the 11,500 range that was that was a little bit.
Difficult, it was more difficult to do. The second tranche because Bitcoin traded down, we had a loss, it traded down till I get, you know, into the tens and even you remember that? So the second tranche we bought at nine at 10,000, something because we're committed, right? And and you know, if you go pull the Twitter stream, there's all sorts of interesting commentary on our, you know
strategy. So you basically had done let's call up to that point 425 million of a 500 million dollar.
Balance sheet and you had rotated your shareholder base to people who were aligned with the strategy and you would also planted the flag in the ground is the first publicly traded business in the United States, to identify a treasury strategy, that would leverage Bitcoin as the primary currency of the primary asset that you would use in your treasury. When you do all that. I know that there's been a whole bunch of conversations in the kind of behind the curtain. I don't need names, but what are other
Hello, publicly traded companies other Finance Executives, people on Wall Street, at that point. Are they saying you're crazy? Are they? Oh wait, this is really interesting. Tell me more about it. Trying to learn, like, what was the reaction after the first 425
million dollars. I think it was largely ignored by every other publicly traded company II. Don't think there's a lot of awareness or to it. When we did our due diligence checks. We found Overstock two or three years ago, had a few million dollars of Bitcoin on his balance sheet.
And that's it. Right? We couldn't find anybody else. And and so this is off the beaten path, but it seemed like. So rational, to me. It seems so obvious Bitcoin is digital gold. It's basically engineered to be digital gold. What do you need in an inflationary environment? You need something that like gold, but better than gold. You have to make a choice. It was obvious that
The institutions were coming, right? I mean, you had, you had companies like Fidelity getting into this space just, you know, six months early or whatever, but the fact that we're institutional costs, sodium's was a big checkbox, grayscale was doing good business at that time. So so it struck me as being a rational thing to do but no other public companies had done it and and it wasn't it wasn't totally clear to me. Why, although at this point now it
Tom's Claire right in hindsight, so we went through that. We did the 425 million the stock traded up Bitcoin started trading up at that point. I started speaking in public and, you know, you were the first person I spoke to I remember, right? And and, you know, I'd learned most of what I know about Bitcoin by by scouring the internet and looking at your podcast, looking at reading all of the stuff.
That was posted. Right? And I tripped through all these different things. And one thing I knew from your podcast, was you always ask a question, right? You know, at the end right? You're like you can ask me a question, remember act. Now, you could ask me the one question. So what I remembered about pomp was, he wants to know a book and he wants, and he wants a question or he gives me a question. So, I'm like, gosh, what question am I going to ask Pomp and beats? You know, how do you learn Bitcoin, you?
Twitter and you study YouTube and your surf, the web. So here's what I know. I know, I get to ask you a question and I Know Jack Dorsey has Bitcoin in his bio. So the question is, how do we, how do we get Jack Dorsey to buy Bitcoin
next correct?
Correct. And, you know, at that point we're all alone is a publicly traded company and people aren't quite sure if we're crazy. But what happens? Next is some bullish things, right? I mean
I thought that when Square bought Bitcoin, that was a seminal event, right? Because one data point is a question mark, But when you had the second data point, you can draw a line. Hmm. And so that was a big day when PayPal announced support for Bitcoin and they started started moving at. That was a big data, was a data point, right? Those were the data points that moved us from 10,000 to
Miles in a coin. And at some point, you know, somebody some Citron research, studied, you know, discovered my stock and Andrew left. I guess I said something positive and the stock started trading up and then it traded into the high one hundreds, and then a train, a traded into the 200s. And, and Bitcoin started trading up and when we got into the teens,
People thought, well, there's something interesting here. So the next step in our journey was like, in addition, to me, starting to communicate why we had done what we done. The next step in the journey was to go out and buy more Bitcoins. So we started buying more Bitcoin as part of the treasury, Reserve strategy, and that got people's attention. Then when the stock got the 300 range, that was the highest have been in a decade 300, so we started thinking, well, maybe
We can raise more money. And so, we went back to the convert market and we had, we were trying to raise four hundred million dollars in a convertible debt offering. But it was extremely popular and we were oversubscribed. So we upsize the deal, the 650 million dollars. So, that was the screaming home run. We we had, we had proposed a 32 to 37 percent premium. We priced it at the 37.5% premium, the high end of the spread we had proposed.
Like 1.25% 2.75 percent interest. We priced at the low end of the of the interest rate. So we're a 650 million dollars at 75 basis points with a strike price of 398. The stock had not traded at 398 in a decade. So it seemed like a breeze, know you could sell 650 million dollars of stock at three hundred ninety-eight dollars. A share seem like a reasonable thing to do with the time. So then we took that we bought Bitcoin with that. So that was
We started out with with we're going to raise the money for General Corporate purposes and along the way the discussion was what you going to do with it. I said, well, you know, I want to be able to buy Bitcoin with it and they said, well, we should put that, you know, into the disclosure. I said, yeah, we should disclose that. And then they said, well, are you sure you're going to buy it? I said, yeah. So eventually it flipped and became we're doing it to buy the Bitcoin. So that became in the history of first, right? Where the first
Company to buy Bitcoin on the balance sheet where the first public company declared a treasury Reserve asset. We became the first public company to do a Dutch auction, which is an Essence, like an equity issuance to buy Bitcoin, right? It's like I'm either buying My Equity back, or I'm, or issuing the equity. So, with the first Dutch auction, you know, where the proceeds eventually became Bitcoin. Then the first convertible bond to buy Bitcoin.
And I think that all of those things rotated, the shareholder base, right? I think the most important thing was to be long Bitcoin, right? So in essence, the first publicly traded company where the shareholder basis is long Bitcoin, and it started out my aspiration, was it be great? If half of our Enterprise Value is based upon enterprise software and half is based upon the assets because before we did this
We got substantially, no credit for the assets. Like, people are basically taking the 500 million and they're like, okay. Well that's going to be worth zero, right? Or negative. Could
you were one times Revenue, plus just the cash on the balance
sheet. Yeah. Yeah. So if you've got a low growth Cash Cow,
Right, that's like being a dentist where you're going to make a lot of money every year for a decade and maybe you'll make 5% more each year for a decade. If you've got a low-growth cash cow, but the money supply is debasing a 25% a year kills you, right? It's like the road to serfdom is working exponentially harder for a currency getting exponentially weaker. What I saw was two thousand people doing a hundred thousand things, right?
Year to make 50 million
dollars and then watching the Enterprise lose a hundred million dollars a year.
Due to a political decision. So in essence were running as hard as we can. We're falling backwards and the situation was literally hopeless, right? Like people wonder where the Bitcoin is Hope come from. Well, it just was hopeless, right? I mean, the operating business is hopeless and and you know, okay, you know, you're going to work yourself to death for a decade and do a million things right with 2,000 people and you're going to be worse off in a decade than you are today. Okay, that's operationally hopeless, right? That's
And then, on the balance sheet.
If somebody says we're not even thinking about thinking about raising interest rates. It means for the next four years. You're going to get zero percent on your money and is going to be worth half as much in 36 months as it is worth today. The balance sheet is hopeless in. This is
all before we even see the persistently. High inflation, that we're seeing now, right? This was just from a market structure standpoint of this had been going on, pre covid, got accelerated during covid. You start to recognize this again last year.
If you go back and look at the inflation numbers and Q3 Q4, I mean, it was obvious at that. We were in increasing or accelerating, but we weren't at 5%, CPI for three, four, five months, right now is a much, much different situation. So, at what point do you switch from? This is purely a defensive like, treasury strategy of. We want to take the cash on our balance sheet and put it in an asset that we can protect ourselves. Protect our purchasing power to. Then it feels like you've made the switch to go offense if that first Bond offering was
Was an offensive mode. I think
you called it right there. I think that it's a defensive strategy through the Dutch auction. We had to do the dark choc, Shinto, provide, a graceful transition for our shareholders to get long Bitcoin, right? You either long Bitcoin or you're selling out to us at a premium, one of the other. And then from that point, Bitcoin started to moving up and our stock started moving up. And then we realize that we like the conservative thing to do is just stop there.
And if we stop there, I mean we would be all Equity 475 million dollars invested a Lovin thousand dollars, a coin or something. And that's not a bad result. Right? We would have made 6xr money. But what we realized is we could borrow money at 75 basis points.
And we end, you know, Bitcoins up a hundred, seventy one percent a year every year for a decade, right? If you can borrow money at 1% and invested a hundred and seventy one percent. Your Arbitrage is a hundred and seventy percent on how much well, how much do you want? Right? Like, what are you going to stop that
when you borrowed at the 75 basis points? I was impressed. But then you followed it up and you borrowed even more at a zero percent interest rate of remember correctly was the second
offering
Because the first offering came out the strike was 398 Bitcoin. Kept moving up, our stock kept moving up eventually that Bond was the best performing Bond of the entire year.
Right. Anthony what I'm saying is of every single corporate bonds sold in the year 2020, every convert every junk bond, everything sold every Municipal Bond, whatever you could imagine the single best performing Bond was microstrategy convertible bond, which where you would have you could have doubled your money, you know at some point is trading insane amounts like triple, you know your money on a bond. Okay, so we had good success there. And of course Bitcoin kept moving.
And our stock up moving up and we realized by February that we could do another offering. The next offering was, we came in the market offering six hundred million dollars. The first one we started with 400 million this time, we start with 600 million. But again, it was oversubscribed. We upsized it exercised. The green shoe. It became a 1 billion $50,000,000 offering and the range was 50 basis points to zero. So we struck it at zero and you know,
Up 5037. I forget the number but we ended up having a 50% premium or 47%. I forget exactly. It was a high premium. It was low coupon. The strike, price is fourteen hundred. Thirty, two dollars, a share. So now put this in perspective. This is 10 times.
The price of the Dutch auction, you know, some number of months earlier now, so why do we do that? Well, because if you could borrow a billion dollars at 0% interest and invested in something, going up a hundred and seventy percent a year. Pretty good trade. Why wouldn't you do it right? Like every single business on Earth, that's debt-financed. Presumably is borrowing money to invest in something which is going to return a higher yield and the cost of the debt.
Now, this I want to pause here and make one point.
the reason that I was sensitive to inflation, like was
I immediately saw the inflation in March and April in the stock market, right? Because my inflation bogey wasn't if I were to go to all my investors and so I got 500 million dollars. I'm investing in a 2% interest and inflation rates 1%. They wouldn't have given me a pat on the back. They would have said the S&P index is moving up. 10% a year, your birth your hurdle rate, your cost.
Capital is not 1% or 2%, It's 10%. And maybe you're getting five percent yield on a piece of debt and I'll hold my nose, but you're losing 5% a year, half-life of the money as 12 years. Okay, fine, but like, you shouldn't be holding. You should be, you should be buying your stock back or buying another company with that sitting on. That cash is it doesn't make any sense. Say, 15 says, the dollar-weighted monetary inflation.
Asian rate across, you know, all all currencies, for the last 30 years is 14% interesting number, he comes up with 14% is the inflation rate of the currencies. Now, that would be the inflation rate on scarce desirable assets or any portfolio of assets. And if I look at my screen right now over the last ten years, the S&P 500 is showing fourteen point. One five percent interest of fourteen point one five percent compounded annual growth rate.
Nasdaq's up, you know, whatever 19%, you know, gold is up 20 basis points, nothing Bitcoins up a hundred and seventy basic a hundred and seventy percent, right? And long bonds, give you like two and a half percent. So the monetary inflation rate equals the SP index. Well, you know, the traditional way you'd value a stock is you would put a risk premium on it and
I would say, well, your cost of capital, is the return, plus the risk premium. So it used to be, would think. Well, there's a 3% risk premium in the inflation rate. Then would be eleven percent. But I think that if you buy the SP index, your kind of in theory, stripping out the risk because you're buying 500 companies. So the SP index can be viewed as a proxy for monetary inflation. And the question of inflation is what your inflation rate. Well, what do you need?
Bye. If you're a consumer then your inflation rate might be CPI. If you agree to buy. What the Federal Reserve tells you, you should want right? And, and the Market Basket of things and the CPI is what the government says. You should want and your life but they never included a Picasso or a jet or a yacht or house and Miami Beach
will in that Market Basket, a step even further than that is the number. Fourteen percent is very interesting.
Because my understanding is, if you go back, obviously CPI used to represent a cost of goods index. So what is literally the change of price of individual Goods year-over-year rear and that's how inflation is measured. Now, obviously, we have a cost-of-living index, which is what you're talking about in terms of. Well, here's the things that we think you should want. Here's the general weightings of these specific assets or consumables inside of this basket, and then, that's kind of our moving Target for this measurement of inflation, but if you were to go back and look,
Look at the cost of goods index based on how it used to be calculated for CPI and apply it to today's numbers, you get about 14% And so not only is the SP. Not only is that monetary inflation, but also that cost of goods index based on the original calculation of inflation is around 14 percent as well, which is, you know, there's coincidences in life, but it seems to keep coming back to somewhere in that kind of mid teen number when we're trying to understand. What is that,
inflation isn't interesting.
The hedonic adjustments kill you, but on the other hand, you know, and I say this off times, inflation is a vector. And what I mean is you got to use, you got to use multi-dimensional arrays and and linear algebra to even start multi, n dimensional, linear algebra to even start to deal with the issue. Another way to say it is you can calculate a different inflation rate for any person in any jurisdiction based upon their mix of
services and assets. They want to acquire and so common sense says, a person that wants to acquire a set of manufactured goods and wants to watch streaming. YouTube has a lower inflation rate than someone that wants to buy Picasso's. Now what if you want to be rich if you want to be rich, your inflation rate is very high because you have to acquire assets. If you want to be middle class. Your inflation rate is different. So back to why why I did what I did.
If you're the CEO of a publicly traded company, your inflation rate is the cost to Capital and the cost to cop because your shareholders, hold you to that cost to Capital. If I go to a public public investor and I tell them my goal is to percent and they're saying, well, the SPs up 14%
then I'm under shooting their goal. Their, their index is the SP Index. Right? So, so the inflation rate for an investor is the end X. Now, of course, different investors have different impact dex's. If you go back to the strategy of your a fixed-income investor, your you've got like a sovereign, you know, or corporate fixed income rate, you know, you got the junk bond index, you've got the corporate, you know, investment-grade index. You've got the sovereign debt index.
You have Capital structures in the world that have different indexes. Someone that wants to send their kids to an Ivy League school and wants to have a house in the Hamptons, right? They have a different index. Someone and someone that wants to be obscenely. Wealthy has a different Index, right? So
That's why you could everybody talking past each other, because all, and of course, if you keep changing the indexes, the S&P 500 Index changes, right? They rebalance it. The PCI, the PC and X is they get rebalance. So so the indexes are changing. And if you allow someone else to feed you, the index they want you to focus on you. Can you can see it right now, right? The official inflation rate in.
It is four percent but the housing prices of 15%, The official inflation rate in the u.s. Is 5%. But the case-shiller index is up 27% big. Okay, and and of course.
It all comes down to deciding what you want in life. Now, in the last 12 months, the ESPYs up 34%, If you're sitting on a hundred billion dollars worth of cash and you put it in the S&P index, you got thirty four billion dollars, but you have a hundred thirty four billion right now. If you if you held it in conventional, treasuries, your short thirty four billion. If you convince yourself that the inflation rate was 5% or if you convince yourself that you're, you could say,
Like my treasury index is just the short-dated sovereign debt and x. And so, as long as I'm beating the 20 basis points, I'm good and you know, and and and by the way, like if I have a bunch of money sitting in a bank, my Bankers come to me, I've literally had Bankers from the big wire houses. They came to me when I'm sitting on a hundred million or 200 million in cash and they go, you know, we can get you into one of our money market.
Ends that will yield 22 basis points and that's much better than the nine basis points. And they're selling this to me. There are people in suits, the make a lot of money and they're selling it to me. And you read the prospectus and the prospectus is they're going to do something and they're going to charge you a 27 basis point feed to generate 22 basis point yield to you. You're
literally, they're making more money than you
are. You're giving 60% of the yield to someone in a suit that's getting that's
Or service to get you five basis points more. But there are, there are people that convince themselves. This is a good idea. Right? And we come back to that second. It is a, it's an important truism in the market. Why is it that everybody hasn't bought that coin? Hmm, people, ask that, right? All the bitcoiners wonder, why don't all these investors buy Bitcoin and the answer is because there's trillions of dollars of capital locked up in capital structures that are chasing a different Index, right?
Right, there's trillions of dollars of money sitting with people that think that inflation is CPI, there's trillions of dollars sitting in real estate funds and they're trying to beat CPI. If I got rents and I'm raising them at the CPI rate and I'm happy with it. There's trillions of dollars invested in fixed income funds where they have to beat the junk bond index or beat the corporate index or beat The Sovereign and x. And if they beat the Sovereign index, if I have, if I have 20 billion dollars and all I got to
Always beat, you know, the junk bond, index or I get paid. Then I'm getting paid to invest 20 billion dollars to get 50 basis points more. What
happens those people? Let's say that inflation. Isn't 5.1 percent or 5.4%, wherever it comes in on a monthly basis now and we all agree. It's something that is higher but there's disagreement on. How much higher is it six? Percenters, it 14 percent in terms of the actual inflation number, what happens, all the people who are using CPI?
Why as The Benchmark? Do they just succumb to the inflation over time and continue to lose money until they wake up or something
else? I think a lot of people have a hybrid situation. Like for example, let's say I run a real estate, trust dry run a real estate company and I have
A hundred million dollars a year worth of rental income. It's capped at CPI.
Does the leases are signed 10 years, 20 years, 30 years, duration, five years duration, and then, you've got all the trade relationships. Like, I can't go to, I can't go to the people that rent my building and tell them that the inflation rates 14%, right? I mean, would you pay a 14 percent increase in your rent here? No, no. No, so there's a certain inertia in in parts of the economy where they're going to move up at CPI, or they're going to be
Or maybe they can do CC Pi. But at the same time, maybe you're the person running that real estate company or thinking. Well, I'm going to take my cash flows and I'm going to invest them in. Would you invest them in a stock that you thought would go up, its Epi, or would you invest them in the S&P index? If you thought you would get CPI? Not really. So, what you have is you have people that are sweeping their cash flows from an operating business that slow growth and they're putting in the S&P index,
if you know,
No, they're looking for the growth to come from
the invest. Okay, the ESPYs up 34%, how many companies in the world generated 34%, more cash flow or raise their prices by 34% or grew their revenues 34% in the last 12 months. Not many, right 98% 99%. They're in they're in a Fiat operating system where they're going to raise their prices or generate cash flows that are rates low.
Van the rate of monetary inflation, but those same people will turn around and they'll buy Bitcoin or they'll buy property or that you may buy property that you is going up faster, right? There's not a single commercial rent. There's not a single commercial lease. I think in the world where they raised the price of the rent. 27% last 12 months, right? At least, I can't imagine if you had a lease. No one's got it. Capped at the case-shiller index.
X. So on one hand residential property or other types of property. Could actually be a creating at a much higher rate while your rents don't accrete at a higher rate. So you're taking duration risk. So I I guess the more important point is,
There's a lot of capital when we think about capital structure. It's like 500 trillion dollars to nine hundred trillion dollars of capital floating around there. It's locked up in structures. Some of it is in currencies and and it can move rapidly. Some of it is invested in companies that can't write move rapidly. Some of it is tied up in equity. Some of it is tied up and in debt
It's tied up in a trust. I have a trust, my trust gave 10 million dollars, to a financial advisor or to a company whose strategy is investing in mid duration, corporate debt. And every year, I review their performance versus their index. And over the course of a decade. I might start to shift small amounts out. But I think that the capital is structured in such a way. There's enough inertia in the system. They could take 30 years. Yeah, for that.
Or the capital to get reallocated. Like we're waging a war on the 60/40 portfolio, right ahead. How long will it take before people allocate that is 6535 or 70/30. Right? It takes a long time. There are people still invested in Gold. You and I joke about that. Goal has been failing for 12 years or something like that, right goals. The same price as it was when Bitcoin was invented. And yet an aggressive move would be a macro investor allocating from.
Percent goal to 45 percent gold and 5% Bitcoin and that's a bit. That's a Year's work.
Yeah, let me ask this question. Retail investors are individuals. I think over the last 12 years or so took Bitcoin and as a generalized group, it went from a contrarian idea or contrarian trade to a consensus trade. There's now, you know, a hundred plus million people around the world that have decided. Hey, this is good enough for me to go ahead and store some of my value or economic wealth here.
And so you can argue that, that contrarian ISM became more of a consensus. We now, over the last maybe 18 months have seen in the financial or institutional Finance World more people jumping into the game. And so definitely some shift from Pure contrarian ISM to now a little bit more of a consensus. Everyone has to have some sort of Bitcoin strategy. You can't simply just say, oh, it's just for drug dealers. It's just for criminals. You at least have to have had a conversation now. Because Fidelity Paul Tudor Jones, Stanley druckenmiller, many, others have all now started to participate.
Pain, what does it take for public companies? Where I basically break down, there's two groups, right? There's yourself, Tesla and square. As the three, major publicly-traded businesses that are multi-billion dollar. Companies that have pursued a treasury strategy that includes Bitcoin. And then there are all of the publicly traded crypto native companies, whether they're minors, whether the places like coinbase excetera. It's still contrarian in the public markets to have Bitcoin on your balance sheet. What does it take to get the shift that we've seen?
Those other two cohorts to now get it to a consensus type, you know, movement or
idea.
I mean, I think there's some you could check off catalysts that are impediments that will become accelerators. First of all regulatory Clarity, right? If you're hearing if you're seeing support for
Let's start with the most basic issue is Bitcoin an asset or a currency?
Okay, the word cryptocurrency has is a very politically charged world word because Bitcoin was a currency. It's an opposition to the u.s. Dollar. Okay, and if it's an asset, it's an opposition to Gold. Okay. So just resolving the fact, it's a digital asset, not a digital currency. Most people, how many public speakers? How many, how many well-regarded investors have made negative comments?
Bitcoin over the past 12 months because they're mistaken. Let me stay Kinley, think it's a currency and they think they're sticking up for the dollar, right? Many, like, I prefer the dollar. So, if you understand, it's a digital asset.
A scarce store of value speculative digital asset. That's how politically correct people would refer to it. Right? And anybody else would say it's just a it's just a digital asset or store, a value Asset. The first, the first impediment is just understanding that and educating the market that is a digital asset. I think II impediment is getting over. The issue of, is it a threat to the powers of being Willoughby band?
So first, what is it? It's an asset. Second will be banned. Okay. Well now we're not going to ban cryptocurrency. We're not going to ban Bitcoin. It's going to be around here. So those two check boxes are huge. I think the third check box is, can I actually buy it via my existing Bank? Every publicly traded company has been doing business with probably the same bank for 30 years pump. Hmm. Some have been doing this for the same bank for 50 years, some 400 years.
Ears. Okay, if you trace it to to have adopted a new banking relationship is not a one in a decade thing. Public companies don't change in a decade, right? So if I could, if I could buy this directly through Bank of America or JP Morgan or Citigroup Etc. I think that makes a big difference if I have to go to a, you know, an Institutional grade Bitcoin exchange. That's a one-year.
Sighs and due diligence friction to doing it. There's two issues, right? One is is before you give a billion dollars to counterparty, you know, you have to, you have to inspect their accountants, their legal teams, their licensing, their executive team. Would you give a billion dollars to a private company? That's new right? It's like that's a huge hurdle and the second is there not
I see insured right there. Not the imprimatur being backed by the US government means that, you know, in a liquidity crisis, the Federal Reserve gives you ten billion dollars or a hundred billion dollars. How much
money did you need?
Right. And that's what the big, the big license banks have. And you know, the last holdout wasn't doing that was Goldman Sachs and the great financial crisis, they broke down and they became a bank.
Write an end, it matter. So if you want to move huge sums of capital, right at the point, that some of the major banks handle the asset that makes a big difference, because it checks a lot of boxes and people are pretty conservative about that. I think the the next hurdle is accounting.
Then we accounting problem
is because this I don't think a lot of people understand. How big of a problem, this
is. Yeah.
It's a source of massive inertia because every publicly traded company is running on gaap accounting. And so we're publishing our gaap balance sheet and our p&l every quarter and investors are reading the p&l. And the whole point of gaap. Accounting is in theory. I ought to be able at a glance and 30 seconds. Look at your balance sheet, know how much Capital you have. And in 15 seconds, look at your p&l and know whether or not the business as well.
And when the Gap accounting aligns with the underlying business, then you can do that. But when it gets out of alignment, then you have to adjust it with pro forma, accounting, non-gaap accounting or adjusted accounting. And when you get to adjusted accounting, it goes from being a 30 second inspection to a 30-minute thing and you know how difficult it is to communicate a 30-minute concept to the world. Very, very challenging. So the
The issue right now and the issue when we got into Bitcoin is is no publicly traded company held any material Bitcoin. So so the accounting treatment was probably appropriately. Conservative the most conservative accounting treatment. You could imagine is indefinite intangible. And what indefinite intangible accounting means is you buy something.
You tested against the market. Continually, you take the lowest bid and you mark the value of the asset down to the lowest bid at any point in the history of your ownership.
And you treat that not as an investment, but you treat that as a loss in the core business, the operating business. So, if you have a business that makes a hundred million a year.
And it's run perfectly, you know with a perfect Peg, 20% operating margin, right? If you buy Bitcoin and Bitcoin trades down for one hour and trades back up again, you might have a hundred million dollar operating loss and then you would be showing the business made no money this year on a gaap basis. So now you're an outside investor and you're staring, you're saying what happened to the software business. It looks like it. The operation got rekt. It's if I made a million decisions,
Poorly.
You know, I probably couldn't, I couldn't go from a hundred million in cash flow to 0, right? Or if I did, it'd be challenging but or on a Saturday night someone could flash crash something and you would have a hundred million dollar loss showing on the operating statement. So indefinite intangible means you take the volatility as an operating loss on your p&l and you take the theoretical worst case, the theoretical worst case would be I buy Bitcoin.
And I wait for the lowest price ever and I sell it all. Hmm. Okay, that you take the theoretical, worst case in, you represent that as the as the status. So when you print your quarterly results, you print, your annual results, you want a simple example, you buy a billion of Bitcoin And Trades down to 500 million, then it increases to a billion then increases by a factor of 10 to 10 billion. If that's the fact pattern, when you close your books under indefinite.
All your books. Say you have five hundred million dollars of assets and it says that you lost 500 million dollars in the in the operating business and the money's gone. That's what gaap accounting says. And actuality, you might have a statement that says, you have 10 billion dollars of assets and it looks to the to the Casual Observer like you generated a nine billion dollar investment
gain,
so you can. Now, how do you fix it?
Pro forma adjusted accounting. You have to create a schedule a reconciliation. But but now what have you done? You've just made the first of all you've made the the investors job hundred times harder and investors got to read all the pro formas. Think about it and figure and then they've got to reverse it out and figure out what really happened in the rest of the business.
Right? And then they've got to figure out what your balance sheet, really look like. And then the second problem you have is your, your statements become non-comparable over time. Like, for example, I can't, if I look at my balance sheet on a gaap basis, today versus a year ago, right? Bitcoin could go up by a factor of a hundred, the balance sheet doesn't change. So, when you're comparing quarter versus quarter, there's no information there because your
Suppressing it, right? Yeah, and then if two companies have been coined, one company as a hundred thousand coin and one company has 10,000 coin in Bitcoin, goes up by a factor of 10. Neither company shows an investment gain. Neither company shows, a balance sheet adjustment. And so, how do you compare one company to the other company? If you're trying to make a rational investment decision, so Things, become non comparable across Securities and they become non comparable across time. And
And you're invited as an investor to create your own set of pro forma systems to compare yourself, which is like thousand times harder. So that's an impediment for a public company or for a company that relies upon gaap accounting. But here's what's really impediment. Like, why can microstrategy do it? Well, because we rotated. Our shareholder base to be long Bitcoin. And because fortunately enough, we were, we
Able to build a substantial Bitcoin position. So now if you know, that microstrategy has a hundred and
You know,
14,000.
114,000 Bitcoin. Yeah,
if I have a hundred and fourteen thousand Bitcoin and I you know, hundred fourteen thousand, 42 Bitcoin. All you have to know about microstrategy has take a hundred and fourteen thousand and you multiply by the price and you know, that we've got that much. But let's say that you were a Google, or you are apple or you were Facebook. Well, you've got all these other businesses or Amazon. And now, you're trying to decompose the businesses.
And if they buy a big Bitcoin position, then what looks like a pristine p&l, the everybody debates, you know, as Apple's gross margin going to be 38 percent, or thirty eight point five percent this quarter and that's a big deal. Right? I mean, there are people take Victory Laps on getting within 1% of the gross. Margin. Well, your gross margins would totally get all your marks, get blown out of the water from the volatility, the accounting volatility of the Bitcoin.
So, how do
we solve it? What what is the change that needs to be made where you would say? Okay, the system we have right now is a issue and it's an impediment. If we move to X, that's the solution in your opinion.
Yeah. Well, so there I joke with people, right? Like you'll be better off, buying baseball cards or art or just about anything, then buying Bitcoin from accounting point of view. Because if you were to buy
If I went and bought sculpture, or you know, some random anything, normally the test would be like once a year, you check to see if the assets been impaired, but checking to see if an asset is impaired, occasionally is much better than checking to see if the assets and paired every minute of the day, right? So so there are different types of accounting treatments, but if you were to buy a billion dollars worth of
Of a security like an ETF.
Like one immediate fixes you buy a billion dollars worth of a Bitcoin ETF. It's not property more. It's a security. If you're owning a security. Generally accounting says you value Securities based on fair fair market value, or fair value accounting. So that means that, that if it doubles, you would show an investment gain, this is the Warren Buffett's accounting for Coca-Cola stock or for Apple, right? So very fair value accounting is applied.
Security's fair value, accounting is applied to certain other things, if the accounting goes from indefinite intangible to fair value. In that case, then you would be showing the 10 billion dollars of Bitcoin as an asset on your balance sheet. And then you would show the gain or loss as an investment, what they call below-the-line adjustment, like on a quarter where it's up to billion. You would have a two billion dollar investment gain and a quarter words, down 500 million. You have a 500 million.
Our investment loss and that's that provides more clarity. It's kind of a benefit to investors because an investor can they can separate the gain and the loss from investment activity, from the gain and the loss from operating activity, right? And that helps you to figure out it is the core business healthy. And you if Warren Buffett Prince like three dollars a share or some large amount of eps. I want to decompose it into
How much of it was from the stock portfolio versus how much of it was from the operating businesses, right? And, and then, I can extrapolate out rationally. So, ultimately, I think fair value accounting is the solution to allow public companies to hold the hold this in large quantity. This is why I say, even a Tesla, or Square would buy not a hundred percent of their balance sheet or 50%, but 5%. Yeah, if it's 5% or 1% or 2%
2%. It's not going to be material to the rest of the piano and the rest of the balance sheet treatment. When it becomes 50%, the volatility from the accounting treatment will optically impair
transparency against the piano and the rest. So, when I look at the public companies right now, let's put aside the kind of Bitcoin or crypto native companies, the miners and coinbase excetera. There's basically three publicly traded CEO's that
Orange built right yourself, Jack Dorsey, Elon Musk, those seem to be the ones who have purchased Bitcoin, who have talked about it, publicly who appear, to understand the ethos of it and kind of why it's important for their businesses. Is this something where we are literally going to see one by one by one each individual CEOs going to have to get orange pilled and eventually make this decision. Or is there some Milestone or like
In point, where you say, when X occurs, we will then see, you know, on a quarter by quarter basis, tens of publicly traded companies or hundreds of publicly traded companies. All going ahead and doing this. Okay. Well
first, I would say it's not just the three, there's there's probably three dozen but every Bitcoin miner is holding Bitcoin on its balance sheet and one of the major things, one of the catalysts that's taken place in the last 12 months is all the Bitcoin miners coming public and all of the miners that were public on International.
Dark exchanges, shifting over to the NASDAQ and the New York Stock Exchange, right? Marathon and Riot. And actually, if you look at it right now, marathon is got a Bitcoin exposure. I wonder when Silver Gate bank will write or how that'll work. But silver Gates, obviously a Bitcoin company. Coinbase has got Bitcoin on its balance sheet, right? You've got bed Farms, hot a, you've got sphere, you've got bit digital. You've got Galaxy, you know, you've
got
Well, there's a bunch of businesses that come out of the industry. And I think we're going to see more and more go public. So let's say that that number doubles or triples of like the publicly traded companies that come out of the Bitcoin and crypto industry because you're just going to get a bunch of startups that continue to grow and eventually go public. Whether it's direct listings, IPOs or spax that number will just grow.
And I think there's a dozen other companies that are public that are holding it in their treasury at a smaller amount. So so what did the Catalyst? I mean clearly one thing is already happening, right? It's the regulatory Clarity that's coming.
The more clarity if the regulator's move forward and they clarify the treatment of stable coins and security tokens and defy exchanges. You know, I feel like the the connection of Bitcoin to crypto has been holding it back right because because stable coin regulation is unclear secure, many cryptos, our security tokens. That's a that's holding us back the
Changes that are trading Bitcoin wall. They're trading security tokens, right? The connection of Bitcoin to ship or Dogecoin write this this holds back a public entity from wanting to get into that space. I mean, in fact, it's really the expressed concern that the SEC has about approving a Bitcoin spot ETF, right? Which is they're concerned about the markets where Bitcoin
Is trading, right? And they're concerned probably about what's Bitcoin volatility coming from. It's coming from the cross-collateralization of crypto markets with high Leverage.
Trading at all flowers right against thin liquidity. Poles of other security tokens, right? And so,
As the as that Clarity comes with regard to the entire crypto ecosystem. It's going to decrease volatility and is going to increase confidence of large public, investors and large public companies. That will be part. I think as if we get clarity from fasts, be or any kind of improvement in the accounting situation, that's a that's a plus. And there's I mean, there's a Groundswell of Interest right? There are
15 letters sent to Faz be on this subject and, and there was a lot of commentary from Regulators. From, you know, we've got Congressman, we've got Senators, we've got Auditors, we've got big institutional investors. We got big publicly traded companies, and they're all opining on the issues. So and I have yet to see anybody.
I haven't seen any articulation by anyone suggesting that the current accounting treatment is beneficial. Yeah, sorry. It's so it's broad-based consensus. That is time to take a look at this again. So I think that accounting is important. I think that, you know, we just see the barriers with the bank's getting knocked down, right? Like, at the point that you saw the commentary by the chair of the FDIC.
Where she said we're looking for ways to allow Banks to hold Bitcoin on their balance sheets, right? If FDIC it used to be, we dreamed our dream was one day. Big Banks may actually own Bitcoin. You know, what? If all the big banks on bitcoin? But now, I think we've flipped to the to another observation and this is a, this is an interesting one and that's
April coin, working group paper that was released last week. Not only did they say, it's okay for FDIC approved Banks to hold stable coins. They actually said it's required to be an fdic-insured Bank to hold a stable coin. Okay, so we're actually growing up as a crypto industry. We're going from unlicensed non-institutional grade corporations that are in primarily.
Nouriel and fast-moving to licensed institutional regulated entities. And if you look at that isn't the conclusion that the next step I see is a green line. JP Morgan Citigroup Bank of America going to issue a trillion dollars worth of stable coins. I mean, it's an invitation like it's a green light.
To every single Bank in the world, right? If your if your Silver Gate or, you know, anybody that's in the crypto industry now, right? This is this is kind of a message. I don't think it's that much longer, right? If you can hold a stable coin as a digital asset. It's not that much longer. Behold you before you hold Bitcoin is a digital asset and if the FDIC is saying, we need to find a way for banks to be
Hold this. And if the president's working group is saying, you need to be a bank in order to hold this the stable coin. Then I think that sometime in the next 12 months. We actually start to see large Banks getting in the business. Is
this good or bad? The like financialization of Bitcoin, let's talk about and then there's obviously all of these other Technologies and assets, but I think that there's a group that would argue the more
That the asset becomes financialized, the more that it gets not just accepted by the licensed organizations, but you see legislation or directives that say, you have to be fdic-insured in order to interface with this stuff. They look at that as negative. There's other people who look at it as a positive. So how do you think about the pros and cons of what I'll just call? Like the financialization of what were assets that you know, many people were attracted to the beginning because they weren't part of the existing system.
Bitcoin is decentralized and it's an asset and it's already gone to 200 million places and you might not like the people that own it. Right? Don't they call it the money of enemies. Yeah, right. The point is Bitcoins going to people who are politics that you disagree with.
Right. It's almost certain so it's spreading at such a rate.
It's like fire and it's like electricity or mathematics and you can have an opinion. Do you think it's good or bad for banks to have mathematics? It's like, we're the only ones with math. It's a good or bad for people to be able to read and write it used to it. You know, there was a concern that we shouldn't let everybody read and write it's just basic technology at spreading as fast as it can. Spread. The reason it's Superior to gold is because I can snap my fingers and I can with
Raw a billion dollars a Bitcoin from the bank in five minutes, correct? Okay, and the thing that's going to maintain its Integrity is the fact that that you can, you can shift counterparties, you can move. If you can move 10 billion dollars of an asset out of a jurisdiction. I can move it out of Miami. I can move it out of a bank. I can move it out of a country. I can move it out of a system. It's always going to have more integrity.
Than the alternative. So, coming back to this. It's like, okay. Are you comfortable there? A lot of people that don't think you should have a software wallet on an iPhone. You should have a hardware wallet, right? There are a lot of people that think that it's better, if if what if I don't want your family to have it because I don't like somebody in your family, right? What if I don't want your small company, you have a private company. Do you own some Bitcoin? Well, you know, did you?
Out. Now there's a company that's got other corporate interests that has some Bitcoin. Lot of people don't want to public company to have it. Why? Well public companies have shareholders. Yeah. Well, I don't want a country to have it, right. I mean a lot of people that are concerned that El Salvador uses Bitcoin. Well, it might get hijacked by the politicians.
What if Turkey actually starts buying Bitcoin? Do I like it or not? Like it, but the point is, it doesn't matter what you think, right? It's not it's like you sitting and saying, I'm really angry that someone else is using arithmetic. Other than me, right? It's spreading like wildfire. It seems to me that the world's a better place if people have monetary Integrity than if they don't have monetary Integrity. I agree, right?
And in this particular case, is this good? Yeah, of course, it's good. Right? Why is it good? It's good because because what we want to do is fix everything.
Not destroy everything, right? If you want to fix the bank, then they replace their bonds, with Bitcoin and the capital structure of the bank is better. If you want. Do you want to fix every publicly traded company in the world? Do you want to fix the balance sheet of Apple and Google and Facebook and Amazon? If I tell you that they have to do the deal through an fdic-insured bank, then you either can fix them.
There, a lot of people don't want to fix them. They don't want. They don't want Apple or Google or Facebook to fix their balance sheet. They don't want them to fix their product. But but on the other hand, I'm an optimist.
What do I think? I think eight billion people should be using using Bitcoin as a digital asset. Now, there's two ways to do it the easy way, and the hard way, the hard way is topple every government in the universe, destroy every technology company and create my own Hardware wallet and my own decentralized. Let's rip back to the network. Destroy every big Tech platform, destroy every big company and somehow, let's build.
Thing totally new. That's the hard way. Seems pretty stressful to me. What's the easy way? The easy way is all the big Banks start. Issuing stable coin, a token called the US dollar right US dollar stable coin and we go from a hundred and thirty billion dollars. In stable coins to a trillion dollars of stable coins to 10 trillion dollars of stable coins to a hundred trillion dollars of USD.
And then eight billion people have an iPhone or an Android phone with it with a wallet and they do 10 20, 50 transactions, a day at the speed of light on the lightning Network.
On the lightning Network and if they end, that's the best, right? A decentralized non-custodial Network, moving. The speed of light for free. Next best is they move these things around on the Android or the iMessage or the WhatsApp or the Facebook are layer 2 or layer 3 application, right? That second best and they do it without toppling every government on earth. Right? Like I can't there's a hundred and thirty currencies that are floating right now.
A hundred and thirty, how many do we need?
Well, we certainly could get by the next step with 12, right? The sea. And why is not going away and the USD is unless you wish to topple the government of China and the government of the US and the governments of the Western World, which I don't think you want to do, right? You got bigger problems. If you did. Right. Like security and safety and
food, mass chaos, and it would be very, very painful situation
for everybody. Right? Like so so if you if you look at and add an optimistic view, let's just actually
Make the world a better place in a win-win for everybody. So your
thought process is this asset, which has that monetary Integrity, that you're talking about is fully transparent. It's a in many cases. You could look at it as an automated Central Bank. Nobody controls. It, it just sits there programmatically. Executing what the code says for it to do, that will serve as a global store of value. Other people will then choose to take their Fiat currencies and upgrade the technology doesn't necessarily change their monetary policy, but they can then go ahead and digitized or tokenize. The
Dollar the Euro, the end one, Whatever currency, and then they would basically use the Bitcoin Network payment rails to have those assets fly around the world. However, people chose, But ultimately people would go back to and settle in Bitcoin as a global store value
partially, but it's a, it's a more elaborate idea, which is
My idea is we incrementally upgrade everything everywhere for everybody in the most peaceful least, painful, least jarring way, right? So the ink, the incremental upgrade means,
Means we deploy to 8 billion, people to everybody on the planet. We deploy digital wallets and the wall at you have a set of currencies in a set of assets. And in that wallet in Argentina, you've got your peso and you've got your dollar as currencies. If you want to hold something for a day, you hold the pay. So if you want to hold it for a month, you hold the dollar. If you want to hold it for a lifetime, you hold Bitcoin, right? You've got digital assets, Bitcoin is the strongest digital asset.
Is it the only asset? No, because you've got a company. There are buildings. There's Apple. I still like Google. I want my YouTube. I like Netflix, right? We need Domino's Pizza. Really Bitcoin Pizza. Someone's got to manufacture the cameras that are staring as right now. Got a microphone. We can't just have one asset. We have multiple assets. We have multiple currencies will all currency. Survive. Know the weak ones, the ones that are
Truly defective will go away. 66 countries are dollarized. There's a hundred and eighty countries in the world. How many currencies do we really need? Right? We it right now, it's China and the USD, right? You might actually collapse down to two, but more likely you'll have the Yen and you'll have the Euro and you'll have the dollar. Is there any currency in Africa that you really want to hold more than the dollar if you had the freedom of choice? Not really. What were you do, though? You need you you need the local?
Currency for local payments, right? If there's a strong local government, you need the local currency to pay your tax bills because it's mandated by law. You need the global, the Global Currency and let's call the US. The global Reserve digital currency, the global Reserve currency, you need that as a medium of exchange. If you want to buy something in Argentina, from someone in Brazil, or you want to buy something in Africa, from someone in Venezuela. You're probably going to swap dollars, right? Why? Because there's
Hundred million companies pomp that have invested, 30 years to create accounting systems, and point-of-sale systems. The process billions and billions of transactions. In those currencies. Like, my company does it. I can actually swap my balance sheet to bitcoin using three people, and I can do that in a matter of weeks, swapping all of my vendor payments. All of my payroll and all of my receivables into
I
mean that would be a billion times harder. Okay, and it's not worth a billion times more stress and effort. It's not, it's just not worth it. Right. It's an inflationary environment money. Decomposes into a currency layer, which is losing value slowly. Hopefully, slowly, if your currency lost value, 1% a month, but your asset gain value at fifteen twenty percent a year that's stable. Now. Do we need to replace it?
Not this decade, right? I'm not going to speculate 30, 40, 50 years out, but I rather kind of feel like a more nuanced idea. Here's a nuanced idea. I want to build the 21st century economy on a strong Foundation of integrity, and trust and thermodynamic soundness and energy Pure Energy. So, that means the balance,
the foundation of every institution should be built on bitcoin, but
every institution has its own derivative, its own security from Bitcoin. So when you create your company, if you want to take your company public, you should be able to issue stocks and stock options back by Bitcoin. I'm not denying that if Turkey goes and they buys, billions of dollars of Bitcoin. They can keep the currency. They would be backing the currency with with a hard asset. How many institutions are there?
In the world that needs some control. Like like maybe if I said to, you can't issue stock in a company. Is that good for the economy? Not really. If I said no country can print its own currency. Is that good? Probably not really right? Because the politicians need some power over the currency, right? I mean, unless you come up with a way to generate all the food and all the products that we need without.
And without countries, like when you figure that out, that's like a utopian idea. Then maybe you can live with Bitcoin only and, and the like, but in the meantime, which is like, let's just focus on the next decade because there's no point in solving, this problem. After the year 2030, right? Yeah, right. Focus on the next decade. The next decade. It works like this.
All the big Banks issue USD stable coins, what happens the US dollar replaces all the weak currencies and it grows in strength, right? The US dollar can become the daily currency of six billion
people and it has been doing that for some time. You mentioned the dollarized country
right now. Right now analog dollars and the 20th century banking system is the reserve currency of the world, but it's an awful inefficient system, right? Yeah. How do you send a hundred dollars to someone on Saturday?
Afternoon, if they live in Africa, if you live in South America, send someone to a friend of yours in Paris on a Tuesday, I dare you. Right. So, the point right now, is the u.s. Dollar is the world's Reserve currency, but it's running on, on 20th century rails. So, the US dollar should involve to run on crypto rails. It should run on in our we can debate right lightning rails. What's up rails, you know.
Any other crypto, right? Interesting question, but what what? We can't debate.
Which is a hundred percent certain is everybody wants to be able to move the money at the speed of light and program. It on a computer chip on a Saturday afternoon. That's that sometimes we get in this in this confrontational state, where people think, well, it's Bitcoin versus the fed or Bitcoin versus the dollar. It's not right? We can all win, right? And so when when here, it's in the best interest of the dollar to move at the speed of light and be programmable, and
It's a hundred million businesses that want to do business and the dollar and I am the controlling shareholder of microstrategy. I found the company. I mean, there aren't that many CEOs that have more power than me. If I walked into a room and I ordered everybody in my finance, team to convert over all the accounting systems and stock and sell everything and satoshi's and pay everybody in satoshi's.
You understand that if everybody didn't quit on the spot, it would be a decade and a billion dollars of work and it wouldn't work. And by the time I finished the billion dollars of work, the company operation would go to zero, right? It's literally a death sentence, for a big institution to attempt to convert over, its its mediums of exchange and it's accounting systems for for routine.
So right now really the value is to get Bitcoin onto the balance sheet as a store of value. Protect shareholder value, that's sitting there, continue to operate your businesses. And you know, my understanding of what microstrategy is doing is you basically have articulated in highlighted two separate strategies. We have a software business that we're going to continue to try to grow Drive, crack cash flow and serve our customers from a business intelligence standpoint. And then we have a treasury strategy, which is, we're going to use Bitcoin to protect our purchasing power in our ass.
Assets that are actually sitting on the balance sheet and those two strategies combined make up the business. And, you know, obviously the market is found it. Incredibly attractive given what the stock price is done over last year's.
Oh well.
if your Apple computer,
Right, you've got.
You've got two strategies you can pursue to get in the digital economy, or one strategy is, you just buy 50 billion dollars a Bitcoin and three people can do it. And if the three people did it, then your stock becomes a Bitcoin, derivative Apple stock becomes a Bitcoin derivative and a Bitcoin moves up at a hundred percent a year, right? You're generating fifty billion dollars a year of shareholder value three people, 50 billion dollars shareholder value, right? It's very simple strategy. The harder strategy.
You start building Bitcoin protocol or lightning protocol into all your other products. You can build it into the iPhone. You can build it into the iCloud, you can, you know, you can build it into all of your other services, you know, and they all have Merit.
And that's an operating strategy and at that at some point that starts to that starts to correlate your revenues to the growth of the digital asset economy and the growth of Bitcoin. So and and all that. Both of those are rational, what's not? Rational, what's not rational is
Is to require that all your customers, pay you in Bitcoin and stop taking dollars,
right? You can control what you do with your balance sheet and you can control what your strategies but implementing
on your customer to rewire all your off. All your back in accounting system. So and it's unnecessary, right? It's not the right way. So like coming back to my view of the world. I mean, I think my view of the world is
We want to find the path of least resistance, to, to fix everything. And that means that means looking at every single part of the economy. Every country will be better if they had some Bitcoin cities can can be improved if they buy Bitcoin if a city buys Bitcoin and they issue bonds. The bond becomes a Bitcoin back Bond, right time comes a derivative of Bitcoin. So I'm not against bonds right? I'm not the guys.
Saying we shouldn't have bonds. We should have bonds, right if the bought junk, bond index is 4 percent and you can issue a Bitcoin back Bond at 6%. It's good for the people that have trillions of dollars, locked up in bonds. It's good for Bitcoin. It's good for everybody in the middle. Right? We can say we can take the Orthodox Draconian view, which is Bond should go away in Bitcoin, should replace them overnight, but it's not, it's not possible, but it's not even a better view, right? Yeah. A better View.
Is is you take your bank and you start handling Bitcoin and you take your mobile app and you build lightning into the mobile app and you take your company and and and you buy it and you buy Bitcoin and the reason I don't really think it's a threat to the Bitcoin. Ethos is because ultimately none of these people can control Bitcoin. It's like people worried like so I have 7 billion dollars or eight.
And ours a Bitcoin. I don't have any more power than anybody else, right? And and in fact the only sentiment that's grown in my mind as my Bitcoin position is grown is I don't want to go to change it. Like don't mess it up. Right? So I think that is, I'm not threatened. If a government buys Bitcoin, it wouldn't be bad for Bitcoin, right? I'm not threatened of a company buys. If a bank buys it and here I guess there is one.
There's one point worth making.
If your, if your portfolio is 100% Bitcoin, you don't have any conflicts of interest, the, you know, the debate of whether or not people use square cash, a PayPal Robin Hood coinbase by Nance, or by the ETF or buy it through Fidelity or night. It doesn't really matter to you, right? Doesn't matter to you, whether they buy microstrategy stock to get Bitcoins, but it doesn't matter to you. Write yours holding the underlying.
I said if you decide that you want to get in the business of selling Hardware wallets, or if you run an exchange or if you provide advice and if now you have a conflict of interest, so now you're you're a Bitcoin entrepreneur and maybe like if you are issuing, if your tether and you're issuing stable coins, you don't want JPMorgan issue, stable coins, its conflict of interest, right competition, right? I mean if
The feds say you have to get an FDIC license. Now. You got to jump through a hurdle. Now, you need General counsel's. You need to actually pay lawyers. You have to do stuff, right? You have to have Nexus, you have to have insurance, it's harder. So so there are a lot of things that are happening in the economy. They're good for Bitcoin. They're just not good for every entrepreneur and the crypto ecosystem. And there is a conflict of interest and and that's why like people ask me. Well, are you going to get into other things? Are you going to
You're going to build software. Well, that's conflict of interest. You know, are you going to go into Bitcoin mining? That's a conflict of interest. Are you going to you know invest with a counterparts conflict of interest, right? So you can do that but those are businesses and they have investment risk and you have competition and you can fail or succeed and the truth of the matter is is it good for Bitcoin if JP Morgan Goldman Sachs and Bank of America issued?
Ten trillion dollars of USD stable coins and start handling Bitcoin and selling it to all their institutional investors. Yeah, it's good for Bitcoins. Bitcoins going to million dollars a coin than 10 million dollars a coin. And all the people that believed in Bitcoins for the last decade, are going to have the financial wherewithal to create their own companies, to do whatever they want. Right? And and to and to express their sentiment. It's just not good for the
Hers to compete against the manga
caps. So let me ask this question. We recently have seen a bunch of politicians all start to pay attention in various ways. So we've got on one side in the United States, most politicians started off abrasive. So without naming any of them. There's a number that we're very concerned about Bitcoin. If you go back a couple of years, we then saw obviously China, go ahead and ban minors and take a pretty abrasive step there, but
Over the last, let's call it eight months, seven months. We've seen El Salvador, go ahead and make Bitcoin, legal tender. They seem to not only be supporting it as legal tender. They also are onboarding people via their this app that they've built and also this ATM network that they've built their mining Bitcoin, and kind of really trying to plug their country if you will into the Bitcoin Network and then just recently over the last week or two. We've seen multiple politicians all at the local level, start to become much more friendly or embracing of Bitcoin. So you've got obviously the mayor in Miami who
Been very kind of pro Bitcoin for a while. You've got Eric Adams. Who's the new mayor of New York City. He now leaning in saying, he's going to take some of his paychecks in Bitcoin and some of the stuff should be taught in schools Etc. We've also got to kind of smaller mayor's one Tennessee in one and I think it's Tampa Bay in Florida. All kind of leaning into this. How do you look at the intersection of Bitcoin and politicians? And it's just this, just a continuation of like Bitcoin is good for business. And so if it's good for corporations, then it's going to be good for the politicians as well.
Or how do you read that
situation?
I think that one of the great advantages of Bitcoin is is its money of the people, its money for the people and the combination of the fact that it's permissionless and it's open. Nobody controls. It means everyone, everyone can adopt it. Everyone can engage in it. And the proof of work Network means that you have
A large business.
In Bitcoin mining and what is Bitcoin mining. Bitcoin mining is like this. It's like your skin. It's like it's it's the first line of defense of your immune system, right? It's what makes you healthy the Bitcoin mining industry is to 22 billion dollar a year industry. Right now. That means that the protocol is creating a twenty two billion dollars subsidy for Bitcoin entrepreneur's to go out into the world and
Find supported political jurisdictions.
22 billion dollars and per year. So when you think about that that means that the miners themselves they have they have to raise Capital but that but you see the Bitcoin miners are ripping today in the market, right? All their stocks are up. Yes, and they've been very successful. You can take a Bitcoin miner public.
You not going to take a proof of stake validator public, right? One of the biggest differentiators is is the miners the miners have to have to use energy and Technology, but the miners are also recruiting political Capital to the network. And so I think that what you're seeing here is is lots of jurisdictions can see the benefit of
Either as sound money, right? It's all the holders are political constituency. And I guess we're going to get close to the point where we're going to flip 50% of the electorate, right?
There's going to be a Bitcoin or in Congress. There already are there's gonna be big winners in the Senate there already are and eventually a Bitcoin will be president. It's not necessarily because they're going to run on just a bit coin only ticket, but they're going to have grown up. They're going to have held the asset and they're going to become the president of United States and hold Bitcoin, right?
It's the most
Pop Bitcoin. Bitcoin is the greatest brand and the history of the world. First check. First observation. It's the greatest brand in the history of the world. What's brand value brand value? Is monetary premium, right? The monetary premium. A Bitcoin is 1.2 trillion dollars right now name. Another brand that's worth 1.2 trillion dollars, right? So it's the greatest brand in the world. It's the greatest monetary asset in the world. I mean, I'm not counting the dollar because the dollars of inflationary asset. It's not an investment. If you
An asset that you could reasonably expect to protect you against inflation, Bitcoin becomes the most popular one other, you know, other than just like random real estate, right? Just owning land. I guess it's land. Was maybe the most popular one and Bitcoin is, is that digital property? So how do I buy all these other things in Africa or Asia or anywhere? It's a very egalitarian asset and that makes it
Politically advantageous, right? I mean, how is it not what politician would say? I don't want you to own your own house and I don't want you to have economic freedom. Right? Right. I mean, I so, I think that the left and the right can both agree on that. It's pretty clear. It's high-velocity money, the higher velocity than anything, but it's high-velocity asset.
It's a bank in cyberspace, but it's a franchise bank. So anybody in on Earth in any jurisdiction can create their own franchise of the bank and what that means, right packs full or, you know, fill in the blank every crypto Exchange in every country on earth when they're selling you Bitcoin or exchanging Bitcoin there in essence, creating, you know, a franchise Bank, a Bitcoin where they're marketing it. So, so Bitcoin is spreading
Through two incredibly powerful, franchises the Bitcoin exchangers? Who are the Bitcoin Banks if you will and it's open and permissionless, right? So there's no you don't have to get a license from the FDIC to have a bank in Egypt, the deals in Bitcoin and then it's spreading through the Bitcoin miners there, the security providers. So the security, the network operators and the and the
Anchors are spreading like wildfire everywhere and who's an example? Well, square cash app, right? I mean, that's an example of a Bitcoin Bank. PayPal is a bit coin bank. Coinbase is a bit coin, bank finance is a bit coin bank, right? And and when you look at Marathon and Riot and all these Bitcoin miners there the other side of the network, so I think that it's inevitable, that more and more politicians.
I began to support the network, not everyone will, but but you know, the game theory of it is such that the more hostile. One regime is, the more lucrative it is. For another regime. It was a benefit to the United States when China banned the Bitcoin right? Cracking down on Bitcoin, mining was a gift handed to the west. And I've, you know, I've said it before, I think it's worth a trillion dollars, right? And you can see it in the hash rate statistics.
but at some point,
It's its sole Bitcoin. Mining is the most lucrative use of energy in the world.
Mmm. Oh, that's hands down. That's in the world. Yeah, very provable and very verifiable,
and the world. And it's the best use of intermittent energy, and the best use of sustainable energy. And so, when you look at it that way, you know, you're thinking, well,
Shouldn't we expect an avalanche more of political support? And the answer is yes, and and why is it? Why is it stable? It's stable because the Bitcoin miners going to and the Bitcoin holders are going to go wherever the politicians support them and they're going to bring their capital and they're going to pay taxes large sums of taxes. So the right way to think about Bitcoins Bitcoins creating an opportunity. It's an opportunity for your family, too.
Money for a hundred years. It's an opportunity to fix your company microstrategy stock is, you know, hitting 800. Right? It's an opportunity for your shareholders. It's an opportunity for your taxpayers. It's an opportunity for your constituents. It's, it's an opportunity in the media business, right? I mean, nobody wants to talk about anything but Bitcoin, everyone's talking about Bitcoins an opportunity for Twitter. It's an opportunity for every mobile
app, but I think people don't recognize and
And I talked about this before is, it's the only thing from a strategic standpoint that if you're an individual, you can plug in your personal balance sheet, right? You can start to run your own node. You can use this technology. If you're a corporation or financial institution, you can plug your business into the network and you can do that in a multitude of ways. You can build services that end up facilitating other people to use it or you can mind to support the network. You can simply just buy the asset and hold on your balance sheet, but you can plug-in. It's also true of
In States foundations, and endowments, and Pension funds, Etc. But when you plug into the network, you're an Essence hiring tens of millions, if not hundreds of millions of people around the world that are all now, working aligned with you to further your business, right? I talk all the time about whether you're a restaurant, right? Where we've literally seen examples of many restaurants who have done this, all the way up to large Pension funds or nation-states all of a sudden, the the Cyber Hornets online. They begin to Rally around you. They begin to push you forward.
Word. They begin to say, hey, we will support you because you are like-minded like us, you are also helping us move this forward. But you also get the support of every single Miner in the world. They'll so we will protect your economic wealth for you and you get the lightning Network. We will help people actually route these transactions. It's just a very unique thing where you're essentially hiring so many people and so much economic value. But all you do is you just plug in but you don't have to go meet. These people don't even know who they are.
It's a, it's an excellent political strategy. It's an excellent marketing.
Strategy, it's an excellent shareholder. Relations strategy. It's an excellent business strategy. It's I guess there's two thoughts. I have here one.
Properly understood. I believe Bitcoin is digital energy. It is pure energy. Right? It's not digital gold. That's put a billion dollars of money in a vault and let it sit there for a decade and you can't do anything with it. It's, it's not even digital property. Digital property is a billion dollars of a digital hotel and I can teleport it from New York to Paris and Back Again and it's maintenance-free and indestructible. It's better than that. It's digital energy because I
And decompose the hotel to room minutes. And I can I can decompose and recompose this Pure Energy hotel and rent it out at the speed of light and program it with a million transactions. A second. You never saw a hotel get programmed with a billion parts of million transactions. A second. It's literally like a swirling energy Mass when you understand that.
Then you see, it hasn't eliminated capitalism. It's simply the 500 trillion dollar digital energy basis of capitalism. It makes sense that you would use it as the foundation to build your family, to build your company, to build your country, to build your City, to build your application, to build your device. You can put it into everything. And now once you've done that,
Look, you can back up your your family with the balance sheet of Bitcoin. You'll be rich that doesn't mean you'll be happy. There's a lot of Rich families that have a lot of messed-up problems, right? You can watch them on television, you know, you can put it on the boundary of your company, you know, I have, you know, seven if I have seven or eight billion dollars on my balance sheet. That doesn't mean I don't have to get up and go to work and make the software work and sell the software and listen to the customers. I'm still in a in a competitive.
Is struggle with other like-kind software companies. It's all business intelligence software and the same is true with your city, right? It's half the solution. The other half of the solution is you need rational policies at the municipal level, the state level in the government level. So, when you think about it like that, right? You realize that it just it makes sense and it's it's
NG to grow. But, um,
What was the second part of your question? Again, in
terms of as more and more people plug into this system? Do we expect not only one the politicians obviously, we'll continue to do this. But is there a spillover effect where people actually leave jurisdictions that aren't Bitcoin friendly? Like there's an element of take taxes, right? There's a carrot and a stick. You can drop your tax rates. You can incentivize people to move, but you also could increase your taxes and literally push people away. It's obvious that the incentive to get people to move to your jurisdiction, but if people continue to be abrasive is their problem.
Yeah, yeah. I remember what I was going to say. No, it's
The energy system is an energy Network. Everyone's plugging into it, and it makes them more efficient than they would otherwise be, but they still have their struggle. What's happening is yeah, you're benefiting from the rest of the network. You can't afford to lose laser-like focus on your family or company or country, right? You can't assume that just because you plugged into Bitcoin Network. You can be a crappy retailer, or a bad mayor or a
Father, right? So it doesn't solve that problem everybody. I think we boiled down to a simple idea, which is everybody's got a balance sheet. Everyone's got a PL. The p&l is your operating business. You better be the best in the world at that thing, the best in the world. If you get distracted, you know, you want to be a good husband. You can't have Six Wives. Yeah. You want to be a good retailer. You better know who your customer is. You still compete against every retail, so you're operating.
Business. You got to be really laser like in good at it. But by plugging your your balance sheet in a Bitcoin, you have hundreds of millions of people guarding your back that are energizing the network and it takes me back to a historic observation, history teaches us. That the winning civilizations, the winners in the history of mankind are the civilizations that channel energy.
Be
more effectively through time and space, right? And that means practically speaking, right? The Romans. They were good at killing people. It's not easy to kill people, right? I mean to raise an army, they didn't show up with bows and arrows and Spears. They showed up with industrial-grade artillery, that tossed, 50-pound, flaming balls of shrapnel at you from 500 meters, or thousand meters away, right? And a Navy. So,
So you see that over and over again, right?
Steel Trump's iron and iron Trump's bronze and that's because and bronze Trump's Stone, right? You pick up a stone. If you're if you pick up the sharp rock, you beat the other guy. If you're smart enough to pick up a rock and the other guy didn't pick up a rock. You won the fight. If you had the had the iron, then you beat the guys with the bronze. If you had the steel, you beat the cars, the, with a the iron you ever seen steel, forged people don't think about this walk.
A steel mill. Look around. What do you think's going on right there? They're channeling immense energy right that the fire the heat, you know, or electric or electric rolls steel, massive energy and two metallic form are powers energy. Potential energy. You get up, 50,000 feet, you drop someone on someone's head. Okay. What's the channeling part? Remember the Gulf War? They you know, Norman Schwarzkopf, used to show the videos of the laser guidance.
A bomb in something that's in the clouds. Dropped the bomb that managed to hit, you know, a 3X3 space from 50,000 feet up, you know, through the wind, right? So the channeling of the energy through time and space, you know, and and being better at chilling at that explains why every team wins in sports? That's why Tom, Brady wins, because the quarterback puts you seen him put the football in exactly the same.
Bot. You have to put that football in that space in a plus or minus 10 millisecond, time spot with the right with the right spin on the ball. And if you happen to be able to do that, you can win. And is it random? No, it's not random. There's one, but one guy that's better at it than everybody else and he and if he didn't have the team, they wouldn't win. So every winner is better at channeling energy and time and space every
civilization every city. Every company, right? Every investor. So the real power of Bitcoin is Bitcoin is digital energy and until you figure it out. If I said to you, what is digital energy. Well, digital energy is, I'm going to put a hundred billion dollars into this container and then I'm going to do a magic trick and it's not here anymore. But guess what? I can move it at the speed.
Of light a billion times a second and you can't find it and I can put it into every car and it'll drive every car on the planet. For the next two years without fuel sounds like a magic spell. It is a magic spell. Any sufficiently advanced technology is indistinguishable from Magic Bitcoins, digital energy.
The next best thing is electrical energy.
It's not that, you know, information in these are not nearly as good. It's a thousand times better than the thing. It's replacing a lot of people, they can't get their head around it. They don't want to understand it. The conclusion is, if I told you like which country is going to win the war, the one that Masters are power, right? The first half of World War II was airpower, you know, seapower the British, you know, control the sea.
Is right or how about this nuclear power, what could nuclear-powered do for you, right? You think you weren't channeling energy, right? You're channeling energy. So now we're talking about digital energy and you would ignore it at your own risk. It, it doesn't guarantee you win. Right? I put a gun. What's a gun? A gun is is channeling with Precision, right? Chemical energy or exploit explosive energy, right?
It's pretty obvious. If you think about it, Guns, germs, steel. You're channeling energy, you know, Lord, help you, if you're on the wrong side of that, but if I do hand you the gun, you'll probably win, unless you're stupid enough to shoot your own foot off and there are examples of people that shoot their own foot off in, you know, in the history of War and the history of civilization. But ultimately what history is telling us is the team that is most coordinated the channels energy.
Always wins and Bitcoin. Bitcoin is a good bet just because it's digital energy and the advantage. You have versus using metallic energy in the form of gold or using political energy in the form of Fiat paper. Is so much greater that that the deck is just stacked against everybody else. Now the questions just who's going to jump on it and how fast which politician which big tech company, right?
If Apple gets on bitcoin, you know, they generate a trillion dollars of additional market cap just on the balance sheet. Maneuver. That's the first trillion. If they build it into an iPhone, you make another trillion. If you're smart, you have a 10 trillion dollar asset in your cloud and your become a 10 trillion dollar bank. If they do it or they don't do it, right, the world's full of examples of Empires topple because they did not Embrace a new technology, you know, the Romans the Romans needed the
Skins to with you know, and and for the Greeks to take their eye off the ball and then, you know, one thing leads to another and when you get enough power, you start to you start to become more close minded. If you have enough money and enough power. You don't need to learn anything new. What we see going on right now is every single powerful person in the world is ask the question. What do you think of Bitcoin, everybody the premiere?
Of, you know, of Russia, every world, leader, every major investor, every major influence or Abby's. Got to have an opinion, ask yourself the question, how many of them spent a hundred hours studying Bitcoin to form an opinion. I don't think there's a single person with a negative opinion. It's been a hundred hours studying it. I mean, I don't think you're out on the limb there. I just think the world is full of people that don't
Devon spend 10 hours studying at. And yet, if I walked up to you and 1900 and I said, I got electricity. I want you to put it in your building. I want you to put it into your Carriage. I want you to put it into your ship. I want you to, you know, you manufacture food, you know, I want you to use electricity instead of steam power or, or mechanical Power.
Okay, how many people would stop and study it? And how many would think they would master and figure it out with one hour of consideration would you know how to wire, you know, her? She's Pennsylvania, you know, or a meat packing plant, you know, or a ship with electricity and $100 thousand hours. How many hours does it take to figure it out?
And one of the consequences of not figuring out. I think the consequences are
over 30 years you go out of business, right? Yeah.
Let me ask this this idea of moving energy between time and space. I think you and I unsurprising to the audience understand how valuable this asset is. We understand how much pristine collateral? It provides when you think about Bitcoin, there's a price that is attached to it and the price goes up and down on a daily basis. It's priced in US dollar terms. There are
Short-term reasons why to pay attention to the price, especially if you're holding on a balance sheet of publicly traded company that we talked about. But when you look out over the long term, I've heard you say things like it's going up forever. Do not sell your Bitcoin and other things that I don't want to make an assumption but insinuate that you are going to hold Bitcoin for your lifetime. How do you think about price in that equation? Do you worry about it? Do you think about what it will be worth in US dollar terms in the future?
Like, how do you think about price?
I think the only thing you got to do is figure out how much of it you can buy. And the reason to stop buying, it would be, you're buying it with leverage or with with a mark to Market loan that could cause you get a force liquidated. So, if you had a million dollars sitting around, you just buy Bitcoin, and hold it, wait.
You know, can you borrow 10 billion? Can you borrow a ten million dollars to buy Bitcoin? I wouldn't buy it a 20x, leverage, or 10x, leverage or even 5x, leverage or something. Because the significance of price is you look at the volatility. You ask. What's the what's the likelihood that it will trade down 50% and I'll get a margin call and force liquidated. If you have margin debt, you can theoretically get a margin call. If you have.
Long day to dead, you know, if you have a seven year alone, we have a seven year alone and we bought five hundred million dollars of Bitcoin at 36,000 dollars a coin. What's the odds? It'll be thirty six thousand dollars, a coin and seven years enough. I'm not so concerned about it. So I I think the way to think of it is here's my model for Bitcoin Bitcoins price is going up because of inflation.
Say, fitting says fourteen percent, right? We know that in the absence of everything else. If you had, if you had completed option of 8 billion, people had Bitcoin and the and we had World currencies and the US dollar was the world currency and we inflated it, fourteen percent a year. Then you would think Bitcoin would go up 14% every year as the currency kept getting inflated. So so the price of the dominant monetary Network or
Monetary asset goes up by inflation and the second, the second Dynamic is adoption. There's a rip, right? That if there's a hundred billion dollars of demand for Bitcoin, then it's going to go up faster than the 14 percent because there's a short squeeze as people are trying to buy the stuff faster than the market wants to sell. And if you went from one percent adoption, to two percent adoption, you could imagine that the price could double just because the adoption doubled, even
No inflation, right? And then, the third driver is utility.
If this is common sense, right? You ever send Bitcoin to anybody else on the main chain and you want to send 37 bucks and it takes you an hour and you got a fee and then when cash app came out said you could just send it by a cache tag, or you know, or you get a lightning. That's the proprietary way called layer 3. And the layer 2 Lightning way is like a lightning wallet and I zap it for one Satoshi in a split second. Remember the big smile? That brings to your face. It's pretty fun.
Okay, did it? Not that make you think that Bitcoin is more valuable like Bitcoins utility explodes? If I can move the money at the speed of light on the layer 2 or the layer 3. And if I can do a billion transactions a day or let's take our Salvador right 3 million people download, I'll wallet and they start doing remittances. Is their demand for Bitcoin? Sure, there is right. So, so as the technical utility increases as we go,
From and by the way, the technical utility drives and feeds back into the adoption, right? Because there's 3 million people in El Salvador. That now have maybe a bit of Bitcoin or the ability to buy Bitcoin in a Split Second That Couldn't buy it six months ago. So if you look at a world going from a hundred million people with what's low utility I buy it, I hold it for a hundred years.
That's low. Velocity a hundred million adoption, 200 million and I move it every year, 400 million, 800 million, 1.6 billion as the user count increases, that's going to drive things. But at the adoption is not just user account. Rightly. If you're building the model, you would say, well, how much money people talk about? They talk about Bitcoin and network effects and metcalfe's law. Okay? Again, if you're just looking
At it and a cursory way you're saying oh metcalfe's law is applied. But if you're thinking a bit deeper about it, you're thinking, you know, Newton's laws. Apply, right, astrophysics supplies.
If you bring a hundred billion dollars to the network and you were one person that's more important than if you brought a dollar to the network and your one person. And so you have to you have to do a dollar-weighted assessment of adoption, right? And, and you would almost say the value of it, is a function of the total amount of capital plus the velocity, right? What's the amount of money that shows up? What's the velocity of the money that shows up? What's the utility of the money that shows?
And when you think about it, that way, it becomes pretty clear that as we March from one use case to a thousand use cases.
Like yeah, holding it as one thing. Least lending it out for yield is another thing. What if I put a lien on it? What if I can lock it up for five years. What if I can? You know, what if I can create a trust? What if I gave you a trust? That's good for the rest of your life and the life of your firstborn child, for the next thousand years and is an app and I just find it with to bitcoin and you can't ever sell the Bitcoin. But you can live off of the yield of the Bitcoin. For the next thousand years. It's an application, right? I can create in
Current policies. I can create trust funds. I can what if I gave you a car, a Tesla car and I put a Bitcoin in the car and the car refueled itself forever and maintained itself. It's a self-maintaining car more valuable than an on maintaining car, right? It's like something. It's like I hand you something with an endowment, right? Yeah, so as that happens.
As you get more money flowing on the network and more people flowing on the network and more utility flowing on the network. The price goes up and does it go up forever? Why? Yeah, because I, as I said to the language of money, what's that mean? It's like English. How long has been around a long time? It's like, it's like, it base 10 math, right? Like there. Here's the thing about it, right? People. Don't get this part.
Bitcoin is is is math. But it's a type of math. It's like base 10 math. The Bitcoin protocol is a protocol for money. Now, I hand it to you. You can either say great. This is the dominant protocol for money. This is the winner and I'm going to buy as much of it as I can, or you can keep trying to commercialize base 16, math, and base, 32 math, and base to math, and base format. And you know, the
16 math base, 10 math is not the only mathematical protocol any more than the metric system is the only system of measures. It happens to be one that we adopted. There's no reason to think it doesn't last A Thousand Years could last 10,000 years, right? And that's the part that that people don't get. So when I say it's going up forever, I'm saying. Well if the will the technology get better, obviously.
Will will adoption increase. Well, I guess you could say it gets pegged out when adoption is eight billion people and everybody's adopted it. Technology keeps advancing inflation continues in whatever, other currencies exist.
And and at some point theoretically if all the other weak currencies failed, right? You think we go from a hundred and thirty currencies to a hundred 232 12 to 10 to maybe one day. There's the dollar and the Sea and wind you're down to two and then maybe we decide to throw away the dollar in the sea and why we get enlightened. And we just use satoshi's. Yeah and you get the perfect. Austrian economics, hard money, perfect thing, maybe doesn't matter to me if we do it. We don't. But let's say we
Did well, then it goes up with the productivity of the civilization. Right? Right. If the civilization is got five percent productivity growth and everybody is adopted the same money. Then you've got five percent growth and until that you're going to have faster than the productivity growth because you're going to get these these rips these, these accelerations from technology and adoption and Fiat inflation.
And in, in the, in the frame of reference is useful to see the frame of reference, right? Is your frame of reference. The peso is of the bowl of our is that the US dollar and in that frame of reference, then the price is going to adjust.
My brothers are going to join us here in a second desk. Couple of questions. Sure, huh? But my last question for you on this topic is when you think about microstrategy, we always talk about microstrategy, right?
The company that you run, but a lot of people will forget you actually made a very large personal Bitcoin purchases. Well, do you think about a difference in the decision making between a person optimizing for this as like a balance sheet strategy versus a corporation? Or do you see those as the exact same thing?
I think for a person you just you just say how much money do I want to store for the next decade or maybe hold for Life. How much, how much long-duration property of? I said, I said.
Said, you got to invest something for the next 30 Years and give it to your grandchildren. Hold it in a family. The family endowment. I would put that in my money in Bitcoin, right? The rest of your money is an investment. You're betting on Apple versus Facebook or it's a speculation. I want to speculate on doze versus ship because it's fun or I want to gamble on the outcome of the Super Bowl because I think I know and it's fun, okay.
And I think that that all personal money falls in those three categories. It's either an investment. It's a speculation or it's an endowment of a savings account for a business. That's different because some businesses are traitors. If you're a traitor if you think you can now, trade someone else, you're a business. You better be thinking about it 60 hours a week. You better have proprietary computers and proprietary models and know the markets and the Arbitrage has then you could trade maybe I mean, Citadel trade
Renaissance trades, I mean other people trade Goldman Sachs trades, so I think they can be traitors. And then also when you get into business right business as of other options, like maybe they can raise Capital, they can issue Equity. They can issue debt. They're publicly traded. I have an army of lawyers and accountants so that I can do that you don't as a family. So so businesses don't have the same financing capabilities. Sorry people down the same financing capabilities of businesses do and then your
Business has strategic assets. If your fight delta T and you have trillions of dollars of fixed income. You can build it into your bonds. If you're a bank, you can build it into the bank. If you have a mobile app, you can build it in the mobile app, if you build phones or devices, you can build it into the device.
One thing I think with a business is clear, as you just should be laser-like focus. And you should think that when the dust settles, I need to be the best in the world at what I do, right? Like for example, it wouldn't be a good idea for me to go into business competing with Fidelity, right? They have 11 trillion in assets. I'm not gonna, you know, like I'm not going to launch a Bitcoin investment fund, right? I'm not, I mean, it's not for me. I'm not going to go in business against, you know, square or PayPal either just because I think it's good idea.
So businesses need to be laser-like focused on competing and growing and in a creative fashion for their shareholders and also businesses have shareholders to manage and shareholder relations. And so, so there's that phrase, you know, if we want to go far, we need to go together. And so, for business, it's very important of shareholder alignment. Would you rather have 10 billion dollars of capital and get a 10% return or no capital and get a 30% return, right? So,
A business has to keep their Capital aligned and so a lot of times they'll do things that are either optimized for their shareholders or they're optimized for their other constituencies and businesses have regulatory Nexus. Right? Like there's certain things that I can't do if I'm a bank in China, right? Or if I'm a bank in the US, I can. So, so businesses have compliance issues, and individuals. Don't
So that's how I think about that.
You don't know this. But my two brothers run the best business, your research team, which is a very clever thing that they can. They also run a union that I've busted like 20 times. What questions do you guys have? Well, hopefully by the end of this, we're going to get Michael to join the union.
This will be our recruiting calling some monetary Union.
Recommend what questions do you guys have? So I listened to the entire interview, fantastic awesome stuff, but I have to ask one question around volatility. So you mentioned earlier you own microstrategy owns or holds over a hundred thousand Bitcoin. I think you've mentioned in the past how much you personally hold, but there's days. Where Bitcoin is obviously appreciated drastically over the last year. 10 years etcetera. But Bitcoin also went from 65,000 called to 30,000, or 30 2008 year.
What's going on on days where you're looking on paper and, and it's going, you know, hundreds of millions of dollars at some points
down.
I'm running the business just like any CEO is running the business. Like if you were to ask Jeff Bezos, you know, what are you thinking about, on days? When Amazon stock is down? It was say, I'm not thinking about it. I'm thinking about fix the business, run the business, and the stock will take care of itself. And that's what I think. I'm looking out, seven years, right? I'm saying, how do we educate more people on bitcoin? What's my next deal?
Do I mean if if my stock is down, I'm going to issue debt. If my stock is up. Maybe I can do a convert. Right? What about the software business? How are we going to deliver the best? Quarterly results. We can deliver you. Focus on the things you can control. So if I can control it, I'm going to do it. And the short-term volatility, you know, you can't control. And so you just wait. You, you got to figure that in seven years.
The market will sort itself out in seven months. It likely will sort itself out and seven. And if you want to drive yourself insane, then you zoom in. And if, if I zoom in close enough, if I just look at .0001 percent of your face for 18 milliseconds, I bet I can find some protozoa bacteria crawling around somewhere and I'll freak me out.
Right? If I want to write like it's you're driving yourself to apoplectic fit spy by inducing this anxiety. So the way I look at volatility is actually the truth is I just say this it's a benefit volatility is the price, you pay to get 10x to the performance of the SP. If it wasn't volatile, then what I have been able to borrow 2.2 billion dollars at one percent interest and by seven and a half billion.
Is worth of it, starting with 250 million in capital.
Like I like the fact it's hard. I like the fact that scary. I like the fact it's volatile. What you really want? This is why I should hope for in life. You should hope that you can see the future. And you have a very strong opinion about the future but that everybody else disagrees with you and they're getting bounced around. It's a bumpy ride. It's like I'm taking you on a bumpy ride down the road. I'm going to bounce you this way, and that way. And in five years.
Here's then there's a pot of gold at the end. And there's only two seats in those 10 people and only two of you get on. So the two of you guys you're like this pot of gold at the end. Sorry. Part of Bitcoin at the end.
Part of Bitcoin at the end. You're like, okay. Well, we'll sign up for the bumpy ride. What else do we got to do? And everybody else is like, fat, dumb and happy and they've all got plenty of everything and they're comfortable in their life. And they're like, well, that doesn't look like a very comfortable ride. It's like, you know, a Jeep, and it's a desert, and it's a bumpy ride. We'll sit this one out. Can you just bring it to us? And it's, you know, what I said, tongue-in-cheek about the FDIC statement is, like, when
I can all Bitcoin on their balance sheet. Well, then every company is going to borrow hundreds of billions and trillions of dollars against their Bitcoin. Every bank is going to by trillions of dollars of Bitcoin. The price is going to the Ramon, you're not going to be afford to bitcoin when I make it, you know a smooth Passage.
You're going to wait until there's a train or a plane that flies across the country. Are you going to get in a wagon and you're going to go west young man? Right? So I am like the joke, of course is its volatility, but it keeps going up.
I like, well, how else do you want it to go up, right? I mean like it's it's going up with volatility. So I think it's a it's a benefit because it's volatility that pays off everybody that does the research and has any conviction and it, disproportionately benefits people that want to make the investment in the new world and, and it transfers wealth away from people that are afraid.
Volatility, it's not really afraid of volatility. It's, I mean, Amazon was volatile, write him. A lot of people made a lot of money on Amazon. A lot of people made a lot of money, even venture capitalist, you know, except extreme amounts of volatility. I think here you have an example of a liquid publicly traded asset, which is volatile. But in fact, it's still misunderstood by 98%.
Of the public investors. So it's an asymmetric opportunity to buy something which is no less risky than investing in a big tech company, but but much less understood and I think probably the Sharpe ratios would actually bear that out because we looked at volatility and adjusted yield,
John, what questions you got? Ya nice to see you again Michael. Um, so
you have mentioned, and I tend to
agree that Bitcoin is digital gold and it's a
Value. I'm curious what you're thinking is behind people companies and other countries using it as a medium of exchange. We've seen El Salvador adopted. What are your thoughts
around that?
I really think that that for the next decade, this the screaming homerun architecture is digital currency as the US Dollar on top of digital asset as BTC. And I think that every country really wants to move Dollars around as the medium of exchange because a hundred million companies. Have their accounting systems wired for dollars, and I think they want to use the store of value and I think if
You had a hundred dollars and ninety nine dollars are invested in Bitcoin. In one dollar is invested in the USD you of 99% of the benefit and it's not even that. It's like you don't have to give up anything. If you have a million dollars, you put a million dollars into Bitcoin and you borrow $100,000 in USD a stable coin and then you pay your bill in the USD while the Bitcoin appreciates. So the net balance sheet.
Oh is a hundred percent Bitcoin, but it doesn't make the currency go away.
Right, like microstrategy has got more than a hundred percent of its balance sheet in Bitcoin, but we still use the currency. So I what I think will happen if you really want Bitcoin adoption to take off. You don't want to squeeze out the stable coins. I think that the USD stable coin is actually going to drive the explosion in Bitcoin, the the use case of stable coins, up until now has been crypto exchanges settling off.
Assure, right. There's they're settling crypto exchanges. We didn't use stable coins at microstrategy for anything. We don't use stable coins, to buy Bitcoin, right? So what you want is you want eight billion people to use a stable coin to buy coffee, and you also want Amazon and General Electric, and apple to remit cross-border, treasuries, in stable coin. And why would you do that? Because you can move money into speed of light, on Saturday afternoon for free and right now, microstrategy can't move.
Any cross borders at speed of light for free. Would we move USD by a stable coin? Yeah, would we move Bitcoin? What we might flash it in a Bitcoin for a second? Move it in another second flash impact on the
USD, right? Allah, you
know, it's like, you know, strike and jock mahler's, we might do that, but I actually think that what the world wants, not just the world, every consumer kind of every consumer in South America Africa.
Would love to have dollars in their wallet.
They would also love they know that now everybody knows that now. That's 100% right? Everybody knows they want dollars in their wallet now. So the US dollar could spread to 6 billion people. It would spread to 8 billion people. The Chinese didn't block it. Right it'll spread all eight billion people now, they don't all know they want to hold their life savings in Bitcoin, but that's growing at a massive rate. That's spreading like a virus.
Every government knows they want to control their currency, the strong governments, will the US will the Chinese will the EU, will the weak? Government's won't write Afghanistan, you know, and, you know, Venezuela and places with hyperinflation Zimbabwe. They will lose their currency privileges because they're weak. And who will they lose them to to the dollar?
Right. So what I think is happening is you're just going to see an explosion in the dollar and explosion in Bitcoin and explosion and demand for money. Moving over lightning rails. If you can move stable coin over lightning rails, that would accelerate the growth of lightning right now. The killer, the killer application I want on my phone is a lightning wallet with USD, stable coin, and then Bitcoin and to be able to move.
Either of them at the speed of light and a programmatic fashion. And I think they both win who loses? And this is the key. Like, we, there's too much the dollar must lose. So Bitcoin can win know who loses is weak assets and weak. Currencies. Can you think of a weaker asset and Bitcoin every other investment asset, right, especially gold, silver Commodities land stock week?
Value stocks and then and big tech stocks. They're all weaker assets. So you see money flow for there's 500 trillion of them, by the way, right? We have 500 trillion a week assets. If you got the 10 trillion from goal. We'd be up by a factor of 10. So I think that week assets flow to the strong asset and then weak currencies. How many, how many currencies in the world are weaker than dollar?
Name. One currency fiat, currency in the world stronger than the dollar, none. They're all weaker. CNY is weaker. Every African currency, every Asian currency, everything. So 180 nominal currencies, one, a lot of her pegged to the dollar 130 floating currencies. They all, they all can be replaced with the dollar. So who wins Western Banks. Western technology companies Western Hardware.
Vices the Western World. The United States western Europe.
Who wins everything Embraces Bitcoin, right, who loses, you know, the nation of gold, right? I mean you want to declare war on something declare war and gold. They don't have an army. They do have an Air Force. There's no politicians running for office of President of gold.
There's, there's, there's no city state country. No one is crying thinking that their way of life will come to an end. If gold got demonetized. So, I, you know, if I had one one request from the Bitcoin Community, my request would be Focus, your guns on gold. Ultimately gold is being demonetized. This is not speculation on the part of Michael sailor. You have all the stats. It's been demonetized for the past decade.
Right. It doesn't have a country. It doesn't have an army. It doesn't collect taxes. There's not a single person on earth that is going to lie down in front of a tank to defend the nation of gold. And yet gold is the enemy because gold is a dumb Rock sitting. You can't mortgage your gold. You can't lean up your gold. It's hard to rent your gold or license it or develop it further, you know gold is not big Tech. You can't put gold on a
IPhone. So ultimately what you have is there are two things that should succeed and grow the US dollar. If you live in the United States and you believe in Western values and freedom and Justice Wright, and Western Law and the Progressive Movement. You want the US dollar to grow and you and instead of saying, well, the dollar is like, a problem to save and forget about that. Just point out that if you live in Africa and Asia, you would give your left arm to trade in dollars, right? So, the dollars,
Should expand on Lightning rails and Bitcoin, should expand. And they go together and we all win.
There's not I mean we all win right? The world's a better place. Every company. Everybody wins, if you're going to compete by, if you're going to compete with square cash app, then you might lose if you're going to compete with Twitter. You might lose if you're going to compete with the United States of America. You might lose.
My advice is you don't got to destroy the bank's, you don't have to topple a government. You don't have to crush a currency. You don't have to stop a regulator. You don't have to, you know, eliminate PayPal, right? You don't have to compete with all of them. You can buy Bitcoin. You want to compete with something declare war on a dead Rock.
Right to declare war on the
Rock, right? And then The Rock has been losing for a while
now. And after you finish declaring war on the Rock, declare war on on dead property. Right. Dead money, right? What a low-velocity? Not, I don't want to hold 500 acres in the middle of nowhere as a store of value. I don't want to hold five tons of rock as a store of value. I don't want to monetize these things. So
You start thinking that way? And you think I just want to take my monetary energy, put it into digital energy. And then I want to partner and Ally with everything. I find admirable every great company, every great politician, every great country, every great technology, just be positive, be constructive. And and we all go and we won together, the world will rebuild itself, right? It's going to rebuild itself. I would like I would prefer that it rebuild it.
Self in a peaceful constructive cheerful fashion as opposed to you know, someone's got to lose. So I could win. I did think everybody can win, right? If we invent electricity and we invent math and we invent fire isn't highly likely the entire human race is better off because of math fire and electricity. I think my weekend we can all win together. And so that's that's the way I see that
before we finish up, we've been going for two hours.
But I know you and I could talk about this all day. If I just give you the floor to finish when somebody says to you, why Bitcoin, what's your, you know, two three, four sentence answer as to why has Michael sailor who had every option in the world to buy an asset, put on your balance sheet, or personally invest in why Bitcoin?
because the most,
I'd start by saying The Human Condition is elevated via the channeling of energy and every great Advance was a new form of energy via metallic energy in the form of steel, or electrical energy, or chemical energy and, and Bitcoin is the next evolution of that, right? So the first reason is
It's compelling and critical to the eventually human race. The second observation is every successful investment ID in the 21st century was a digital transformation. Digital transformation of Music, digital transformation of of entertainment, digital transformation of books, digital Communications Bitcoins, the digital transformation of everything else. Everything that didn't get Trent didn't get transferred.
Transformed in the end. The first you know chapter of the mobile wave comes next. So now we have digital transformation of gold.
Digital transformation of property and digital transformation of energy.
And for the first time in the history of the human race, you can literally take energy transform it into something in cyberspace store. It forever moved at the speed of light program, it and eliminate the friction. That that is applied to to that energy when it takes another form.
Economically energy is capital r and we use the phrase Capital. If you have a digital Capital, it's the digital transformation of capital and capital is half of everything. If you sum up every piece of property, every corporation, the value of everything. It's all capital u capitalized it. So if I capitalize everything and I stored it in 20th, century instruments, I would store it. I would store them in equity.
Thirties and bonds and and titles to property and the 21st century. I have the chance to capitalize the entire world economy and put it in a digital token. We call Bitcoin. So why why and buy it? Because because it's half of everything, it's hot. It's already half of everything and it is the platform. It's the, it's the foundation upon which we build a 21st century economy.
20. You could say, 21st century, cyber economy, but if you want to fix everything in the world, if I could eliminate the friction.
Move everything at the speed of light, make it a mortal.
Oscillated at 60 megahertz or faster, you know. Execute a million transactions. A second and make it infinitely intelligent. Wouldn't you think that that would be a good idea?
Right the future capitalism.
There's not very many people who believe in this more than I do, but you may be one of them because I think you and I see eye-to-eye on all of this. So I appreciate you taking the time to come in here. I appreciate you two sitting around and watching this entire thing coming and asking some questions, they'll be taking virtual laps for weeks now, so because you even hinted at the fact that you may be open to joining their Union, I appreciate everyone watching at home. Please make sure you like the video, subscribe to the channel.
Thank you to, so five for sponsoring the best business show and we have lots and lots to go over after this conversation. But we back tomorrow and think that's it. Go follow Michael on Twitter. Don't know if we've got anything else. I don't know if you guys remember me. I don't know if you need any more, Twitter followers, but I got one more
question. Oh boy, good.
We talked about, don't ask me what the price is going to be. No, I won't ask you. I'm not tired of that. Quite now we talked
about Bitcoin being good for business all the time. And I think part of that is obviously the price has appreciated. So anyone who has been involved has has benefited from that but part of it is also just the community aspect of it. Right. And how powerful that is. Is there a specific point in time where you were like, holy crap, like this is why all these people are really strong. They're really
passionate.
You know, I think that every single month has gone by, I've just been more impressed with the community. Ethos. If you look at our press release, when we first bought Bitcoin, and we said why we bought it, one of the lines, we put in the in the press releases were persuaded by the community ethos, but by the community itself that that this is digital gold, and it's harder and is smarter and stronger, and it's faster.
Then gold. And I think that came out of all my research before we actually made that announcement. And then the way you figure out the community's passion and is you do your research and you study all the influencers, you look at all the podcast and you read all the books and you couldn't come to any conclusion. Other than the, the asset is differentiated based on the community. Ethos. I haven't even tweeted this, I made.
This point, I guess I elaborate right now. I said, you know, the character of the asset determines, the dust the dust. Sorry, the character of the of the owners determines the destiny of the asset, write the character of the people that own something. If you own like Joe random yo-yo coin and you're owning it to flip it on Saturday night, depending upon Which Way a football game goes, okay.
That's the destiny of the asset, right? It's going to be short term because the people are short term. If the whenever you buy anything, you can ask yourself the question. What's the character and watch the intent and watch the strategy, or the belief system of the people that are buying the thing that I'm buying? If I buy real estate in New York, right? You'll eventually sell it to someone else who swears the New York is the Apex City. People that love New York. Their opinion. Is there is no other City.
Earth way. You could go, everything is a step down. They have a view of New York as Mount Everest, and they're living at the top of it and everything. If you were to say, have you ever considered moving to another city? They recoil in horror, you know, kind of like New York is like the Rome of 100 AD and there's Rome, and then there's barbarians. Okay. So that's the character of the asset owner. What's the character of people that own Bitcoin if you have if everybody bought it? Because because they,
I intend to hold it forever.
Isn't that the kind of asset you want? Or if I told you people bought it because they liked the monogram, the you know, they own that dog. While how many dog coins are there 48 or something. Well, if you bought the 47th dog coin, then the 49th dog
coin is eventually going to
demonetised you.
So, I think that's been very clear from the beginning.
Bitcoin had the Immaculate Conception, right? I mean, you can't recreate this again. How do you have a an open-source, you know asset. That was never pre mind. That was never, I see owed that not, you know, no one thought would be that until it became that, right. So I I think that, I think that my conviction grows with time, but it's pretty evident.
In August. All right. So what's your point now? Just
do you have a price prediction? It's going up forever
because I appreciate everyone coming. I thank you very much, Michael. You, you've got a whole bunch of stuff, you get spending your time on, so I appreciate coming. You're hanging out with us, and anyone's got any questions go to eat at Michael. He probably will not respond, but he'll at least read it seek. Ask me tomorrow.
