Strategy Q2 Investor Q&A with Michael Saylor & Phong Le, Hosted by Natalie Brunell

And welcome. I'm Natalie Brunell, author of Bitcoin is for Everyone and host of the Coin Stories podcast. And I'm very happy to be back moderating Strategy's second live investor Q&A. We're live today on X and YouTube, and over the next hour or so, we will get to as many of your questions as we can. They were submitted directly by retail and institutional investors through the company's official question form and on X. We received dozens and dozens of submissions covering a range of topics, and my job today is simply to put those questions to the company's leaders and keep us moving, so we can cover as much ground as possible. If you're watching live, you can continue submitting questions in the replies, and my colleague Alex Devanni will be looking out for new topics and angles that haven't already been covered by the submissions we received over the last week. And if you can't stay for the entire hour, don't worry. The full replay will be available on Strategy's platform along with mine. Now, before I introduce our guests, a brief disclosure. Some statements made during today's presentation regarding future expectations, plans, and prospects may constitute forward-looking statements. Actual results may differ materially due to important factors, including fluctuations in the price of Bitcoin and the risks described in Strategy's SEC filings, including its quarterly report on form 10Q filed on August 3rd, 2026. This presentation is for informational purposes only. It is not an offer to sell or a solicitation of an offer to buy any securities, and it is not investment, financial, legal, or tax advice. Any offering of securities will be made only by means of a prospectus, and additional information about Strategy is available at strategy.com. So with that, let me introduce Michael Saylor, the founder and executive chairman of Strategy, and Phong Le, Strategy's chief executive officer. Michael and Phong, great to have you back.

Happy to be here.

All right. Well, we have a lot of questions to get through, so let's jump right in. The first one came from several investors. It's directed to you, Michael. You recently posted a chart on your X page where you outlined a digital asset monetary spectrum that included digital capital, digital credit, digital money, and digital currency. What is STRC, which you describe in that visual as digital money, and do you disagree that Bitcoin is money?

I think if you're using the theoretical term for money, then you would say money is a bearer, a non-sovereign store of value bearer instrument like gold. But that's a classical Austrian economist view of money. The current conventional view of money is that money is a US dollar equivalent or fiat currency equivalent asset like the US dollar that holds its peg against a fiat currency. So, I think that 99% of the world thinks that money is a fiat currency, and a money market is a fiat currency that generates yield. I think that there's 1% of the world that are Austrian economists that think that money is gold. Some of them think money is silver, and money is Bitcoin. But I think that's an academic debate, and there's not much point in getting mired in an academic debate because about 0.1% of the capital in the world, or 0.1% of the economic value in the world, is actually invested in the Bitcoin network right now. 99.9% of all the capital, all the money, all the stuff of value is invested in stuff other than the Bitcoin ecosystem right now. A lot of that's equity capital, a lot of it's real estate capital, some of it's metallic capital like gold, some of it is credit, hundreds of trillions of dollars of credit.

So, I think that if you want the Bitcoin network to grow by a factor of 10 or 100, then you're going to have to attract capital from the traditional finance establishment. And that means attracting equity capital flows or credit capital flows or money market flows. So for the people that have not yet bought Bitcoin, the ones that we're actually working to serve, their view is that money is a medium of exchange, a unit of account, a store of value, and they would think that that's the Japanese yen in Japan or a yen money market in Japan. They would think it's a US dollar money market in the US. They think it's a euro money market or euro in the European Union. And so the traditional or the Keynesian view of money is money is a fiat currency or fiat currency equivalent that pays yield. So, the chart that I'm illustrating is the digital assets taxonomy. We think that Bitcoin is capital, and so digital capital is Bitcoin, and Bitcoin competes against gold, real estate, equity capital, credit or credit capital or money markets held as capital or art. Those are all the things that Bitcoin competes against. Again, 99% or 99.9% of the economic value of the capital in the world is not Bitcoin. So, if you want to get it, you need to compete against those things. You need to tell people why Bitcoin is better than gold or art or real estate or equity like the S&P index or bar of gold.

STRC is digital credit. We've extracted a credit instrument from capital. It's semi-volatile; it's not as volatile as Bitcoin, but it's more volatile than a fiat currency. And the next step is to take STRC and create something that looks like a digital money. And a digital money would be the mythical Bitcoin-backed stable coin. It's a fiat currency stable asset, whether it's a stable dollar or stable yen or stable euro, but pays yield. So the difference between digital currency and digital money is digital currency is deemed to be stable coins. It's like Tether or Circle or any other digital stable coin in whatever currency system is out there. Digital currencies don't pay yield. So, digital currencies are the winners of medium of exchange in the crypto ecosystem and the digital assets ecosystem. I think there are some fundamentalist Bitcoin OGs that wish that wasn't the case or they've been hoping it wouldn't be the case. But I think that at this point in the year 2026, we can see that substantially all the prices in the world. If I were to say 99.999999% of the prices in the world are in fiat currency, I might be understating the case. It's just, you know, to somewhere between six and 100 significant digits after the decimal place. All the prices are in fiat currencies, which means that the medium of exchange is generally the US dollar. If you're holding stable coins, they don't pay a yield, though. It makes a good medium of exchange. It makes a very poor store of value or a weak store of value. The idea behind digital money is to take the best of digital credit and the best of digital currency and merge the two together and create something which is generally stable to a fiat currency but pays a yield. And so if you can actually create a yield on a stable currency instrument, then you've got something which serves as a much better store of value. So that particular asset that I put in my chart, that's the first example, well, one of the first examples, maybe the first example of someone creating a digital money asset, and they're creating a digital money asset by engineering a stable asset that actually has yield. The yield comes from digital credit, and the asset is stabilized through some financial engineering to be stable to a US dollar. I expect there'll be dozens, if not hundreds, of different types of monetary assets that people build. So it's not the only one. I think there's about a dozen different organizations that are building digital monetary assets in the digital assets ecosystem. And I don't think digital money will be limited to tokens. I actually think that you'll see digital money funds created as ETFs in the United States and probably as ETPs and other types of publicly traded funds that trade on exchanges all around the world. And I also think that we'll see private funds, just like there are money market funds that are private that don't trade publicly. There are money market funds that are public that trade as ETFs, and there are monetary instruments like currencies that are stable coins. So, the thing that we think is really important is that if Bitcoin is going to grow by a factor of 10 or a factor of 100, we need to facilitate capital flows from the credit markets and the money markets. And right now what's going on, if you took away STRC and you took away the digital money tokens that are now starting to develop, then what you have is fiat currency flowing into the stable coin market, and it's all backed by currencies, by fiat currencies like US dollars, and then you have capital flowing into the capital market that actually supports BTC, but there would be no capital flows from the credit markets or the money markets into this ecosystem. If we create good credit, then we will be able to create monetary instruments on top of it, and the companies that create digital credit like Strategy and Strive will have equities, and the equities will attract capital flows, which will also flow into Bitcoin, and companies that create digital monetary instruments, the instruments that'll be on top of digital credit, they'll have equity as well, and they will attract capital flows into the ecosystem. So we think that the economy will grow if we actually create credit instruments, money instruments, currency instruments, and equity instruments. All of them that are tied in or backed by either backed by BTC or tied into the Bitcoin ecosystem. So that was an example of the first of what I think will be many digital money instruments. It's not the only one, and certainly I'm not endorsing that particular one as an investment. It's a security type investment. But I think that it's a seminal event in the same way that when people first created money market funds, that was a pretty important event. And when people created ETFs backed by money market funds, I think that's an important event.

All right, let's turn now to the equity side to the common stock MSTR. We have a question from Rob. He said, "I have three children and I invested 73,000 each into MSTR, believing in the long-term potential. Today, that 73,000 is worth 20,000 and the long-term potential is now a function of getting back to break even. MSTR common shareholders seem to be your lowest priority. You defend STRC and pay down converts using MSTR at the market offerings. Achieving BTC per share yield doesn't do much for my kids. I have a decade long perspective, but I'm worried that you will ATM so much that we'll never get back to 325 a share. Have you considered paying out a dividend to MSTR Common shareholders simply to do something right by them in the near term?"

Yeah, what I'd say is if you want a dividend, you should buy one of the preferred stocks like STRD pays, like almost like a 15% effective yield. So, if you're looking for a stable instrument that pays a dividend, then I would look to STRC or STRK. They were designed to pay dividends and give some upside. If your time horizon is less than four months, you probably should own a money market. If you are making an investment and want the money back, I want to see a good return on investment in four months to four years, you're probably a credit investor, and you ought to look to, you ought to consider one of the credit instruments. If you're holding the equity, then you need a time horizon minimal of four years, right? Ideal seven to 10 years. Bitcoin was an all-time high about a year ago. So when we're in a bear market, you're going to get more amplified Bitcoin. So you're going to if Bitcoin's down 50%, we're going to be down 75%. And in a bull market, we expect to outperform Bitcoin. So, you know, when you're buying MSTR, you're getting amplified Bitcoin. When you're buying Bitcoin, you're getting on a roller coaster. So, if you are going to get on a roller coaster, then probably you want to use a metric that's like a four-year blended metric. So, when we look at Bitcoin, we look at the 200E simple moving average. And that way we take a 4-year cycle view and we consider how is it trading versus the 4-year average. I think that MSTR is going to be more volatile than that. So, I think the whole point of the equity is to generate the amplification, and so if we were to pay the dividend, we would be actually undermining the equity value proposition and we'd be undermining the credit value proposition. And the reason that the equity is so volatile is because we sell the credit. And the reason that we're working hard to build the balance sheet is because the company's future is based upon the credit. If we can sell $10 billion a year worth of STRC, and if BTC outperforms our hurdle rate, it's about 10.5% right now, then the $10 billion of credit that we sold starts to look like net income to the common stock equity holders. So that being the case, you'll get a multiple on the credit sales. If there are no credit sales, then there isn't anything to multiply. And so, the single most important thing is for us to stabilize the credit business and to build the most sustainable, highest quality credit business that we can. And so, the equity will actually come later, right? We're in investment mode to build the credit. If we do the things that are good for the equity in the near term, they're bad for the equity over the long term. And on the other hand, if we do the things that are good for the credit in the near term, that will be good for the equity. So ultimately, the product of the company is the credit. And the better the credit is, the more valuable the company is. And we think the company will be very, very valuable if we make the credit, especially STRC successful. So, we're making a long-term investment. It's not unlike Netflix or Amazon when Amazon was building out Amazon Prime. They were providing cheap shipping and or free shipping for a long period of time and people thought it was not great for the equity. But at the point where everybody in the country is subscribed to the product and they all used the product and Amazon won the market, and our view is the same. We want to win the digital credit market. We and ultimately we want to create the world's best credit, and if we do that, then the primary beneficiaries will be the equity holders, of which I'm a big one. I have more than 19 million shares of the equity. So I feel your pain. But I think we have to be prepared to have difficult years. Might be one year. It might be two years. We wouldn't think it would be four years, but we might have to actually ride through some number of months or a year or two in order to get to the point where things start to work to the benefit of the equity.

Multiple investors pointed out that you recently sold Bitcoin and you recently purchased back STRC. Are there any plans to buy back MSTR?

I think we're open to buying back MSTR if it trades at a discount to NAV or if it's the right thing for the company to do. We evaluate all these programs week by week, day by day. Right now, STRC is trading at a discount to PAR. So, it's a pretty obvious thing for us to do. And MSTR is not trading at a discount to NAV. So we're prepared to do it at some point if we needed to. If MSTR is trading at a very very deep discount to NAV, then probably you would see us do something like that. But right now it's not the highest priority of the company. The best thing we could do right now is fix the credit. If we fix the credit, the equity premium should expand and that will be good for the equity. If we take the capital that we could use to fix the credit and start buying back the equity, that would be credit negative. And if it's credit negative and the credit business weakens, then even if you were trying to buy the equity in the open market, it would be weakening because the fundamental question is is the credit business worth a hundred billion or a trillion dollars. If there is no credit business, the answer is no. It's worth zero. But if there is a credit business, then there's just debate over whether or not it's worth 50 billion or 100 billion or 250 billion or a trillion. And so the single most important thing for us to do is make the credit work. And right now we're allocating our capital to doing that.

Okay. So fix the credit, fix the equity. Phong, this question is from you for you from Johannes Schmidt. CEO Phong Le has cited JP Morgan as a model for how Strategy should evolve for digital credit. Yet, Bitcoin's entire philosophy was designed as a direct alternative to the centralized trust-based banking system that JP Morgan represents. Doesn't modeling Strategy's business, including STRC, after a centralized institution like JP Morgan, contradict the decentralized principles that Bitcoin was built on? And how do you reconcile pursuing a JP Morgan style corporate structure while staying true to Bitcoin's founding philosophy?

This next question comes from at Grain of Salt. Would Strategy sell STRC and use the proceeds for a cash reserve and MSTR buybacks in addition to buying Bitcoin? This was suggested in the Q1 earnings presentation and is it still a viable option?

Sure. Yeah, we could use the capital to, we could swap STRC for MSTR. We can swap STRC for USD. We can swap STRC for BTC. We could swap STRC for any other debt instrument or credit instrument outstanding. So there and there are probably other things we could do with it as well, but we're very open-minded about how we use the capital.

Next question is from Garrett. What is your stance on MSCI's recent rule change proposal to remove Bitcoin treasury companies from their index and what do you expect this removal would do to the stock prices?

All right, this question comes from Sergio. Could Strategy eventually build a 20 to 30 billion USD reserve mainly through STRC to deploy aggressively during future bear markets? And could a larger cash buffer also strengthen the case for S&P 500 inclusion?

I think we'll always carry large cash balances going forward, and over time we expect the US dollar reserve balances to grow. We expect BTC reserves to grow. We expect the operating cash or US cash balance that's unrestricted to grow, and we will use that opportunistically to buy back our credit, buy back our stock or buy back our debt or buy Bitcoin whenever we think it makes sense. So the company's optionality is growing, and at this point we would expect we'll just keep getting larger from here and we will have more trading options than we've had in the past.

Jerry asks: Is the focus permanently on Bitcoin per share accretion via financing, or could opportunistic spot purchases play a larger role in supporting liquidity and price discovery going forward?

Our primary focus is to create digital credit that strips a large portion of the volatility off of Bitcoin and extracts a yield. And so that's STRC. We're not really traders. We think that that market, which is the digital credit market right now, is about $15 billion. We think it can become a hundred billion dollars, then 200 billion, then 400 billion, then a trillion. So the business of the company is to create the credit. The trade that we're making is we're willing to bet that Bitcoin will outperform our hurdle rate. Right now, our hurdle rate is 10.5% or something. We update on our website every 15 seconds. The duration of the company, the duration is like 33 years. And so the business of the company is we're sort of betting sometime over the next 10 to 30 years that we're right. And we're not really traders, you know, from day to day. So we're not, the reason you should buy the equity is not because we trade Bitcoin. If you really think that you found someone that can trade Bitcoin really well, you should invest in their private fund. The reason you should buy the equity is because the company has $60 billion of capital and can create five or 10 or 20 billion a year of credit, and if Bitcoin beats the hurdle rate, that means the company makes 20 billion a year. And if you want to own a company that makes 20 billion a year that can grow 30% a year, then we're that company, right? So if you believe in digital credit, then you would look at it and say okay, well the company that can do that is very valuable. I think that as a practical matter we will hold more cash, and if Bitcoin is trading at an extreme premium to the 200E moving average, we'll probably tend to acquire cash rather than BTC when we sell credit, and if Bitcoin is trading at a low premium or a discount to the 200E moving average, we'd probably lean toward a bit more BTC than cash. So I think that where Bitcoin is in the cycle may drive our cash to BTC allocations, but ultimately we're not traders. And I think what people often times they miss is they don't realize that in a bull market, our equity premiums expand. So demand for the equity expands, the equity premium expands, demand for the credit expands, the credit risk on the credit falls. And so both the equity and the credit businesses explode and capital flows to the company. So in a bull market when the Bitcoin price is rising or is high, we will tend to have a lot more capital come in the door and therefore we'll buy a lot more Bitcoin because that's when the capital comes. And in a bear market when Bitcoin is crashing, the equity premiums compress and the credit weakens and there's less demand for the credit and there's less demand for the equity. And so we will tend to buy less Bitcoin in a weak Bitcoin market than in a strong market. But at the end of the day, if we're selling the equity at a premium to the underlying Bitcoin, right, if Bitcoin rallies and we're selling the equity at a massive premium, the fact that we paid double when we sold the equity for triple, you know, isn't a problem. It was still accretive to the company. So the price of Bitcoin when we're swapping equity for Bitcoin doesn't matter. And the price of Bitcoin when we swap credit for Bitcoin only matters over the duration of the credit. So over a decade, if we're wrong, then we'll be wrong in 10 years on the credit. But with the equity, we can never be wrong. Like if Bitcoin rallies and our equity premium expands, we could pay a million dollars a coin for Bitcoin and we'd pay for it with a massive, you know, stock price of 25,000 a share. We'd swap it. Bitcoin might crash from a million to 200,000 and people would say, "You're crazy. You bought it 5x more than it is." But the point is, we swapped equity for the Bitcoin at the top of the market. And so at the bottom of the market, the question is not well, did Bitcoin draw down? The question is over the next 10 years, will Bitcoin outperform our hurdle rate or the cost of the credit? And at the end of the 10 years, we'll know. So we're long-term thinkers. We're not short-term traders.

The amount of acquisition of dollars, or Bitcoin, or the amount of capital markets activity we engage in is really dictated by the capital markets. That's Bitcoin. Bitcoin is capital. The credit markets, that's the demand for STRC, and then the equity markets, the demand for MSTR, and even to a certain degree, the derivatives market. So those capital markets, they're all moving independently and sometimes they're correlated, and we are participating in all of them every day, you know, and so that's the key thing to keep in mind when you consider what will we do and why do we do what we do.

All right, we are a little over halfway through this Q&A session. I'm going to take a question from our live audience. This one's from Tim Fiaka. What do you think of the business model to acquire cash-flowing businesses backed by Bitcoin treasuries like Orange Juice? Do you see yourself adopting some sort of cash-flowing business model in the future? And what are your thoughts on the potential benefit of cash flow for MSTR?

Yeah, we won't do it. It's a perfectly fine business model for other people to do. I mean, for Orange Juice, it's perfectly fine. And there are other businesses that are in the business and there are investors in the business of acquiring cash-flowing businesses. So that's their business model. Our business model is to create digital credit, and if we were to start to divert from that, we would be distracting ourselves or diluting our focus. And so it creates all sorts of operational complications of different types. It would undermine the equity. It would be harder for equity investors to properly handicap and trade the equity because we would be creating heterogeneous performance in the equity. You would have to have a forecast or you'd have to have an opinion on every single thing we owned. Right now, if you're an equity investor, you just have to have a model for BTC. It would also undermine the derivatives markets, and so people that trade the call options and the put options and that's a massive, you know, 30-40 billion interest business, they would be undermined if we started to diversify into cash-flowing businesses. And it would also undermine the credit because now instead of having a homogeneous credit model where you can recalculate the credit risk every 15 seconds, you would now have to create a heterogeneous credit model where you consider the credit risk that is implied by bolting on another business to our existing business. And so we think it would be dilutive. It's a dilutive distraction for us. That's why we don't do it. We're laser-focused on our business model, which we think is the best business model that we could possibly execute on.

All right, let's pivot some questions to specifically digital credit. What lessons has the management team learned from the recent STRC drawdown and recovery that could be applied to increase adoption moving forward?

Phong, you want to take that?

Yeah, I would say we learned we have to be prepared to buy or sell anything at any time. So the company needs to be able to sell Bitcoin as well as buy Bitcoin for the Bitcoin to be fairly valued. And if we're not willing to sell it, then the credit is not fairly valued because if we're not willing to sell the Bitcoin to fund the credit dividends, then that's credit negative. So we have to be able to trade BTC. We also realize that if we want to stabilize STRC, we have to be prepared to buy it as well as sell it. So we were very good at selling STRC at 100 and we are very good at buying BTC, but now we have illustrated to the market that we can sell BTC and we can buy STRC. So it's kind of like, you know, you can't just have a right hand. You got to have a left hand and a right hand, or maybe the car has to be able to turn left and turn right. And I think that we also, to Phong's point, we have to show that we can dynamically manage our reserves, you know, and the US dollar reserve, the unrestricted cash, the restricted cash, and the BTC. And all of those things were important. I think the other important thing we learned is we need to have a focus upon the capital structure, and we need to keep improving the capital structure and we need to keep a laser-like focus upon the quality of the capital structure if we're going to grow the credit business.

Phong, when we were on stage in Las Vegas for the Bitcoin conference, you talked about how 80% of Stretch holders at the time were retail. This question comes from Stuart. He said, 'Recently, I have seen you post about huge allocations from institutional funds to STRC. Why did retail lead the way on the product and why are institutions now coming around and what is the split now?'