If you think Bitcoin is going to fail, don't buy Stretch. Don't buy MSTR. Don't buy Bitcoin.
It seems pretty apparent to me, but a lot of people think that you're just an ETF. Why would you ever trade for more than one times?
There are a few reasons why we went through iterations of strike, then strife, then stride, then stretch.
I've talked to a lot of Bitcoin Treasury people and they don't have that underlying belief in Bitcoin. So that's the downside sort of black swan scenario is the $2 million goes to zero is stretch prices from $100 to zero.
You're on track to a million Bitcoin this year. Where do you see sort of this growth trajectory over that next decade?
This is what happens when your government falls to a communist government. And what my parents didn't know is it was...
What your company strategy is doing is pushing a new product, digital credit. Yeah, digital capital, digital credit. Some say it's the most innovative thing in the world and a lot of people think it's either a Ponzi scheme or don't understand at all. So, what would you say is the most common misunderstood thing that you hear about that?
There's a few misunderstood things. So, first of all, Stretch is, we call it digital credit because there is a universe of credit investors about $300 trillion, actually bigger than equity investors, right? And so if you want digital capital, you buy Bitcoin, you hold Bitcoin. Fantastic. You want a digital equity, you can buy MSTR or you can buy any variety of digital asset treasury companies. If you want digital credit, then we have created a brand new space for that. And why is it credit? Because essentially you're buying in this particular case a preferred equity, but you get paid 11.5% annualized yield. So it looks like a credit product. So that's sort of a piece of just as a baseline because people are like, what the heck is this digital credit thing that you just make this up? Well, no, traditional credit, and now we've digitally transformed traditional credit on the back of Bitcoin. Second piece is people are like, is it too good to be true? Like I love this idea. I can buy a product that has a relatively stable principal. I need 11, 12% but I'm used to getting half a percent. I'm used to getting 3 and 12%. And so am I taking on outsized risk to get the 11 and a half percent? Because with reward you usually have to have risk. You are taking on more risk, right? And let's be clear, you're still buying in a capital stack a preferred equity, sometimes people call it a hybrid, sits between common equity and debt. And so you're buying something that's preferred equity which means that we take in the capital and the company do not have an obligation to pay the capital back, right? So the risk is that you're buying into an instrument that the company, the board, Mike and I have the discretion one, not to pay the 11, 12% and two, not to pay back the principal. Why would you do that, right? Like why would you take on that risk for 11, 12%? And this is the part I think people don't quite understand is behind the ability to pay that capital. We have $2.25 billion of cash that we put on our balance sheet to make people feel comfortable that there is an ability to pay the principal beyond just the appreciation in Bitcoin which is unrealized and issuing shares above a net asset value. Right? So we have that and then behind that we have $60 billion worth of Bitcoin. So you ask yourself, am I going to get paid the principal back? Well, we have literally $60 billion of Bitcoin on what is now about an $8 billion asset class, right? So I think you're pretty, at least at this point in time, pretty secure that we'll pay the principal back. And then are you going to pay 11.5%? Well, we have $2.25 billion, which at this point is about 18 months worth of dividends. And beyond that, we can also sell our Bitcoin if we need to to pay the dividend. So there's this idea that 11, 12% is too good to be true. What are the risks? The risks are fairly well disclosed, but we also have what I would call a pretty bulletproof balance sheet behind it, right? And so you got to peel back the layers of the onion for sure, but when you peel it back, we're pretty transparent about what's behind it. So I don't think it's too good to be true.
Yeah. And as you said though, you could choose not to pay it, but that would sort of be the death of the company.
Yeah. There are a lot of things we could choose. You know, companies pay dividends. They could choose not to pay it, but when they do that, then the stock price goes down, the equity value goes down. Like, why would we? The only reason we would choose not to pay it is if we're in some black swan, the world is ending, Bitcoin is exploding kind of a situation, right? And what I tell people is what would be that situation? If Bitcoin was to draw down 90% and sit there for 5 years, there would be a situation where we would probably not pay the dividend, right? And if you think Bitcoin is going to go down 90% and sit there for 5 years, that makes you pretty much think Bitcoin is going to zero.
It would have to fail basically.
It would fail. It would go to zero. And if you think Bitcoin is going to fail, don't buy Stretch. Don't buy MSTR. Don't buy Bitcoin. Yeah. Right. Like don't buy digital capital, don't buy digital securities, equity, don't buy digital credit, right? And for those who think that, you know, we can argue till we're blue in the face, it's okay. You're welcome to have your views, but then you're also welcome not to buy any of our securities.
Yeah. Yeah. That being said, even if I'm a traditional investor looking for yield, I don't really have to know Bitcoin or even trust in Bitcoin. I can trust that you have two years of yield payments and I'll see if something's happening and I have a year to get out potentially.
Yeah. And that's what's really interesting here, right? For someone to buy Bitcoin today, let's go back 5 years ago when we first started this journey, right? In 2020, almost 6 years ago now, to buy Bitcoin was not an easy process. Yeah. Right. You had to create an account likely with Coinbase or Binance US or whatever it was back then. You had to transfer your money in there. You had to go through a bunch of KYC, AML, you had to wait 3 days, maybe the money will show up in a week, and then you actually had to go on, download the app, create an account, all this kind of stuff, and buy Bitcoin. It was very difficult to do.
That was why MSTR was interesting to a lot of people. It was an on-ramp to Bitcoin. Okay, put that aside. Now today, right, the process of getting 11 and a half percent yield on your money is as simple as opening a Robin Hood account, buying STRC and being done. You don't need to understand Bitcoin if you don't want to. You do need to understand the company and what a preferred is. And that's what's really interesting about this product, right? We knew this was going to appeal more to the masses than MSTR or BTC, right? If you look at MSTR today, it's about 40% ownership by retail. If you look at STRC, it's 80% ownership by retail.
Wow. So, these are folks and we started to look at the investor list in a lot of detail. And it's not, you know, if you look at our top 10 shareholders as an example of Stretch, I believe it's around 10% ownership of Stretch, which is a very small amount. Usually your top 10 shareholders of a common equity might own 30%, 40% of the common which means that this is a product that is being sold to the masses in the US who are buying $1,000, $5,000, $10,000 at a pop. Which is fantastic. That's what we wanted. And I would guess without knowing exactly that a lot of these people are just looking for the yield, right? And they don't know much about Bitcoin at all. Yeah. Right. And that for Bitcoiners, that's awesome. Yeah. Right. Like we're on-ramping people into Bitcoin because obviously what we do is we take those proceeds and we turn around and we buy Bitcoin and put it into the Bitcoin ecosystem. And so we're now finding a way to on-ramp people who otherwise wouldn't access Bitcoin or Bitcoin treasury companies to buy digital credit.
You don't want to miss it. I'm talking about the biggest event in the world. I just got back from the Bitcoin conference in Las Vegas. One of the biggest events in the world, one of the best events that you can attend. And the next one just got announced. We're talking about 2027, July 15th through 17th this time in Nashville. I'm going to be there and I hope to see you there as well. And right now you can get tickets for cheaper than you can get them any time of the year. Pre-sale right now and you can get them 10% off if you use my code. I'll put a link to it down in the show notes down below. Make sure you come. I hope to see you there. Don't miss it. So, you have these fixed income buyers. A lot of fixed income buyers might be people who are dependent on that for like retirement. You might have a lot of old people who need that income to pay their bills, their medical bills, etc. And they maybe they're 78 years old. They don't have 5 years to wait for Bitcoin to hit the next cycle, right? So, they just want the yield, but they're not necessarily being onboarded onto Bitcoin. I mean, they're getting the yield that's powered by Bitcoin, but they don't need to know about that, which I think is probably a good thing because in order for technology to really hit mass adoption, you don't need to know how it works, right? So, they're not really onboarding to Bitcoin. They're supporting the Bitcoin ecosystem, right?
Yeah. If you think about that sort of person, everyone probably pictures a grandparent or a parent who's 75, probably has 10, 15 years left to live and they, you know, let's say they've done pretty well in their life and they have $2 million saved up and most of them if you look at most retirement calculators, right? Like how much do I need to retire? You ever seen one of those calculators?
Yeah. And you get 4% a year if you're lucky. It assumes 4% and you're eating down the principal so that when you die, you die poor. You die with nothing. That's your goal, right?
I hate that goal. It's such a terrible idea because if you get the math wrong, you're screwed, right? Oh, I don't...
You have a multi-year draw down.
Yeah. Or if I live for four more years, I'm done.
You don't die poor, you live poor for four more years. So these retirement calculators always, I found them comically bad. Yeah. What you really want to do is if you have $2 million, you want to live off if you can get 11.5% off the $2 million, you want to live off the $200,000 and keep the $2 million there into perpetuity so that you can live to the age of 110 if you want to. Yeah.
Or have something to give to your kids, right? And the beauty of something like this is because it's tax deferred. That's $200,000 of real tax deferral, you're not paying taxes on that money. And by the way, as most folks know, the way return of capital treatment works is when you take Stretch, let's say you have it for 10 years, the cost basis goes to zero and then you give it upon death to one of your children, cost basis steps back up and you get another 9, 10 years of tax deferral. So I do think it's an ideal product for folks like that and we get a lot of flags like, no, that's a terrible recommendation. Like why would you recommend somebody because you could lose all your principal. That's fair, right? That's the downside sort of black swan scenario is the $2 million goes to zero is Stretch prices from $100 to zero, right? But what would I do? What I do is if you see us starting to burn down that cash reserve and it's like at two months, sell the product. Yeah. Right. And then go, but until then you had your 11 and a half percent returns and the same thing is true with any fixed income instrument. So, I'm going to buy a dividend stock from AT&T. I mean, their business model could be disrupted. Or I buy a bond from Google and AI disrupts. I mean, so the same is true. There's always that same risk.
Yeah, there's risk. Buyer beware for sure. Our disclosures are very clear. In fact, you could argue like those other instruments you're talking about. At a great example, you get to see their business results every quarter.
You get to see our business results every week because we put out an 8K of what we've done. And you get to see within the week, you go out to our website and you get to see every disclosure you ever want, right? You can decide when it's time to get worried. Yeah. And get out of the product. So, I agree. It's, I think it's a very good option for a retiree not to die poor.
Yeah. Yeah. I think it's an amazing product. And it certainly works if you want fixed income. I mean, it's just kind of the best option out there. Let's go one layer higher. Let's go to MicroStrategy, MSTR or Strategy, MSTR. So MSTR to me, it looks like this factory as Michael Saylor would call it where you're taking in, you know, raw Bitcoin and then creating like this digital credit product on there. It seems pretty apparent to me, but a lot of people think that you're just an ETF and you're just holding Bitcoin and why would you ever trade for more than one times?
Yeah. Yeah, there's always this, since you asked what are the haters saying, right? There's either you're just an ETF or you're a Ponzi scheme. So, why don't we cover both of those, right? Like, first of all, if you want an ETF, you can buy IBIT or you can buy MSBT. Now, Morgan Stanley put out what is a 14 basis point fee ETF, right? When we first started this in 2020, we bought and held Bitcoin and that's all we did, a software business and then we bought and held Bitcoin. And so at that point in time, we should be valued at 1x our underlying asset was which was Bitcoin. Makes sense, right? We then started to lever up, right? And levering up means we took on convertible debt, secured debt. And if we lever up, we were able to then buy more Bitcoin, right? On leverage. And at that point in time when you lever up the company, if Bitcoin is going up, right, if the underlying asset is going up, we should go up more. You know, it's fairly simple, right? Like, and so if you're able to leverage something up, you should trade it more than the underlying asset, right? Right. And as you grow that leverage and as the underlying asset grows in the value, we should trade it more than that. Right. And then we did something interesting which was a better form of leverage which we call amplification which are these preferreds where we're not diluting the common stock. We're not taking on actual debt that has an obligation of repayment. And so that's amplification and as we buy more Bitcoin through amplification we should trade it in even greater than 1x. Another way to think about it is what are we doing? We're increasing Bitcoin per share. Right. Right? And what I tell people is if you buy an ETF, if you buy one Bitcoin's worth of an ETF, right? Let's say you put whatever it is $78,000 into an ETF and you get one Bitcoin. That's basically what you get with your $78,000. I guarantee you at the end of the year you will have access to one Bitcoin, right?
Or less because you pay the fees.
You pay the fees. So you have a little bit less than one Bitcoin. That's it. That's the bottom line. One Bitcoin at the beginning of the year, one Bitcoin minus the fees at the end of the year, right? So, a little less.
Yeah. If you buy access to one of Strategy's Bitcoin at the beginning of the year, right? Like if you buy access to one of our Bitcoin and one Bitcoin per share, right? And at the end of the year, what we've delivered every single year is more Bitcoin per share. So if you bought one Bitcoin's worth of MSTR stock at the beginning of 2024, at the end of the year you had 1.78 bitcoins worth of MSTR. And so we're increasing Bitcoin per share. And so if you are getting access to more Bitcoin per share with MSTR than you are with IBIT, shouldn't we trade at a value greater than the underlying?
Yeah. At the point where we stop increasing Bitcoin per share or for some reason we have to sell our Bitcoin and we decrease the Bitcoin per share then we would start to trade at a value less than that and that's just, you know, I think that's just finance, that's just math.
Yeah, the difference is I guess with the operating business then you trade a multiple of that book or the MNAV number so then while you're getting more Bitcoin per share it could trade at a lower multiple no different than an equity would trade at a PE ratio. And so the PE ratio goes up and down. So while I may be gaining Bitcoin per share, the multiple goes from a two to a one and I've lost capital off of my equity valuation versus an ETF sort of stays the same.
Yeah. So that's one thing I have to deal with more volatility. Yes. Yeah. And of course you're right. Like with leverage comes volatility, right? Right. Because you're leveraging the underlying and therefore you're getting more volatility of the underlying which is why if you look since we started this effort Bitcoin has gone up about 38% a year since August of 2020 and it's had a vol of about 40%. Right. A vol of 40, right? And we have gone up about 55% a year with a vol of 60, right? So, yeah, you're getting more amplification, but you're also getting more volatility.
So, when you think about that then, so it's kind of basic math. If you add leverage, you're going to outperform Bitcoin. Yeah.
If we both buy one, we both go up the same, but if I put leverage against mine, I'll go faster.
And if Bitcoin goes down, you're going to underperform Bitcoin.
That's right. Yeah. Now, I remember a year ago Michael Saylor was saying that the market sort of expects you to trade maybe a two times beta to Bitcoin and so that should mean that you should outperform because of the leverage but also means I should expect you to underperform if Bitcoin goes down. So if Bitcoin drops 40% and you go down 80% is that something that you would sort of expect? You're not trying to do anything to hedge that?
It would and we're not trying to hedge and I think there's a mathematical component to all and there's a sentimental component to all. Yeah. So I can calculate the mathematical expected volatility of Strategy based on our Bitcoin per share growth or Bitcoin yield and our leverage and our amplification. I cannot calculate the sentimental aspect of volatility. Yeah. That is also driving the value of the stock price but I think 2x is not an unreasonable amount because that has been our observation. Now we've seen that compress more to about 1.5, 1.5 the performance of Bitcoin, 1.5 the vol of Bitcoin, yeah. Right. And so that seems reasonable and engineering volatility up through leverage is fairly easy and we were talking about Stretch, what we've done with Stretch is we actually engineer volatility down which is actually harder to do. And so we've taken a product Bitcoin that has a vol of 40 and we've actually engineered it down to two, right? And when you take a return of 38 with a vol of 40 and you engineer it down to a return of 11 with a vol of two, you've actually increased significantly the Sharpe ratio, which is the return above the risk-free rate divided by the volatility. So that's actually a more interesting mathematical and engineering feat, what we've done with Stretch than what we've done with MSTR.
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I know Michael Saylor is sort of the guy that's out there in front of everything. You're behind the scenes having to build all this, which is way more difficult than just talking about it, I'm sure. I mean, they're both equally important. But I'm curious, you know, one of the things he talks about is like sort of like simplicity of messaging. And so I know you rolled out three preps before, Strike, Strife, Stride, and now you have Stretch, which seems to have found that real product market fit. It also seems like it aligns with that simplicity of messaging. So MSTR buys Bitcoin. We digital capital. We create digital credit with Stretch. Stretch is easy. It's a bank account that pays you 11%. Boom. So how important is that for you as a company building that out? And does that mean that Strike, Strife, and Stride, I don't really hear them being talked about anymore? They're complex products.
Yeah. So first of all, on the simplicity of messaging, right? You know, Apple has proven over multiple decades that the simpler and easier to use a product, the greater the demand, right? And if you look back 10 years, they had essentially five products, right? And they at that point in time, 10, 15 years ago, had only five versions of the iPhone. Now they have dozens of products, dozens of versions of the iPhone. And I think they wavered off of the simplicity messaging. But all that said, they proved that a simple product that is easy to understand is the one that's going to sell because we go back to, you know, Bitcoin, an amazing product, simple and brilliant in its design, is difficult to explain, right? And Stretch, a very simple product to explain. Now, getting to something simple is a lot harder than getting to something complex.
Yeah. Right. Perfection is when nothing else can be stripped away, right?
That's exactly right. Yeah. And so there were a few reasons why we went through iterations of Strike then Strife then Stride then Stretch. The first reason is just pure ability to launch a novel product into the market underwritten by banks who want to ensure that the product will be successful. Right? And so as a company that was very well known and had essentially saturated the convertible bond market, the first preferred that was backed by Bitcoin that was going to be perpetual in nature was novel enough. And so the banks that we worked with said to seed this novel product, we need to get the convertible folks to buy it and therefore let's make it a convertible preferred. Right? That's why we launched a convertible preferred day one. It wasn't because we wanted to make it convertible, but we felt that making the product successful, getting all the existing convertible buyers who trusted us to buy, we started with a convertible preferred. Right. Right. And so that was clearly going to be the first one. It was successful. So we said, now can we do one that's not convertible, right? Right. And that's what Strife was, basically a preferred that had a fixed rate 10% that was not convertible. And we said, okay, good. Now we said okay can we launch something that doesn't have the governance rights that our senior Strife and Strike do that is for the masses, right? And that was the purpose of Stride was a fixed rate, no governance rights, non-cumulative junior and that was to be for the masses and we launched it and it was pretty successful but when we said hey fourth try how do we make this really really simple. What the masses want is not a product where the principal goes like this and the rate stays stable. We flipped it and said, let's keep the principal stable and the rate goes like this. Back to the retiree who has, you know, 5, 10 years that they don't want their principal to get cut by 30%. Yeah. Right. They want to know that they're going to get paid 10 and a half, 11, 12, whatever percent every single month and the principal is going to stay flat. Right? That was the epiphany and that's why we launched Stretch and it was very much one of those cases where as we put the products out in the market we started to realize what the market really wants because we got market feedback. Right. So that was useful. Now why don't we talk about the other products, right? The Stretch product is built to perform regardless of Bitcoin price, bull, bear market. You're seeing it right now. It's been through a fairly significant bear market where Bitcoin price dropped 50% and Stretch is sitting right around 100 bucks, right? It's actually quite phenomenal as an experiment in the capital markets and I know you're a capital markets guy, like it's a pretty cool thing to watch this happen.
And you actually climbed up to par sort of during that bear market.
That's exactly right. Yeah. And we had to increase the interest rate but it did what we were hoping it would do which is quite phenomenal. So now the other products are built to perform in a bull market, right? So what I'd like to think happened and you saw this actually happen the first half of last year. It was a bull market and we saw products like Strike and Strife start to build up to 110, 120 and then we issued more of it. I do believe as we enter a bull market, you'll see these products start to perform. People will make money off of the principal appreciation and the dividend. And we'll be talking a lot more about those products, but they were sort of, they're the bull market products. Got it. And Stretch is the it doesn't matter what the market product is. So I do think if you're sitting here and there are people buying into as an example Stride which is trading at like 80 right but the dividend is still 10%. Which means the yield you're getting on that is actually 13, 14%. Right? And so if you are a little bit of a longer term holder, Stride, you might argue, is actually a better investment than Stretch because you're going to get a 14% yield and you're going to get potential appreciation from 80 to 120 or whatever it is. You might get a 50% appreciation in a bull market, right? Not suggesting that everyone go do that, but that is an alternative to buying a Stretch, right? So if your time preference is a...
A little bit lower, if you can wait longer and handle a little bit more volatility, you could actually earn more yield with potential upside. But there's also potential more potential downside. More like a dividend paying stock where you're going to get the capital appreciation of the underlying stock plus the yield that it pays you.
Now, it seems like the demand is so insatiable that it's just unlimited. The other night at dinner, Michael said that you guys took what, two decades to get the 250 million that you originally put in into Bitcoin in 2020, and then like last week you made that like in a minute.
Yeah. He's like, there's the screen refreshed and then we had it.
And it makes sense when you see 145 trillion of tradable fixed income instruments, 350 trillion of debt instruments, right? So, it seems like I mean it's just there's no competition. There's just so much money out there to be made.
That being said, most of that tradable securitized fixed income are typically bonds with duration and you have equities that are perpetual. So, it's not a perfect fit into that market. So how do you think about that?
Yeah. So for us the issuer equity that is perpetual is less risky to the common shareholder than a bond with duration.
Right. In fact if you look at our convertible bonds they all have duration. And the challenge with duration when you're investing on an underlying asset that is still quite volatile is you might get stuck at some point in time where something comes due and you risk selling Bitcoin at a low price, lower than you bought it, taking a loss to pay off the bond, right? And so that is from an issuer perspective why we are moving away from convertible bonds which are pretty good sort of way to invest when your equity is growing, right? The pricing is not great because it's an illiquid market not accessible by retail for the most part but it's a reasonable investment. But as an issuer for us going to something that is perpetual equity without duration is superior. Now, if you're an investor in a product, right, knowing that it is a debt instrument that is more senior and you can get your principal back above everybody else is reassuring, but the trade-off is you're getting 3, 4, 5%. Right? And so, if you want that 11, 12%, this is the type of instrument. And then we go back to what are the risks in the instrument, right? And as I laid out, I think the risks are actually quite nominal if you believe in Bitcoin as an asset class.
Okay, so I got to tell you what I've been doing with my money lately. I moved my cash over to River. And before you ask, yes, I still pay all my bills in dollars. Everything works the same. But here's the real difference. You see, River pays me 3.3% on my cash. And they pay it in Bitcoin. So my money that was just sitting there doing nothing at all in the bank, it's now stacking Bitcoin while I sleep. And I started thinking like, my bank takes my deposits, they loan those deposits out, they make 12, 17, 24% and they pay me 0.04%. I mean, honestly, that's kind of a shakedown when you think about it. Now, River's FDIC insured. They use full reserve. They charge no fees. So, I don't know why I didn't do this sooner. So, click the link down below and get $100 in Bitcoin just for getting started.
And I think it all starts with that underlying belief in the asset class of Bitcoin. And I've talked to a lot of Bitcoin Treasury people and they don't have that underlying belief in Bitcoin. And it's like they're jumping on the bandwagon, but they don't believe in that. So I want to jump into that for a second because you know again you're the one that has to sort of build this machine. You're dealing with the capital markets trying to raise capital. I would imagine that's pretty hard because you're sort of building a whole new asset class not just a product but an asset class that hasn't been seen before. It seems like you've completely changed the entire financial system which I look at the financial system both equities and bonds as based off of discounted future cash flows. So, do I believe they have the cash flow in the future to pay me back? Right? And with AI happening right now, who knows which of these companies will be able to pay me back, right? Apple does a Google bond to build a data center. I don't know if they'll have the cash flow from that or whatever. Whereas, you have the asset. It's not based off of discounted future cash. So, you're building this new asset class, this whole new structure on a brand new asset. So, how has that been going into the capital markets and try to sell that vision? I mean, it's obviously worked pretty well, but I'm curious like maybe specifically like from your past jobs, maybe before Strategy, like how does this set you up to go do this?
Yeah, there's I'll call it there's, you know, we talked about trading at a premium to MNAV and there's a mathematical and a sentimental aspect to it, right? And I think that's the same with Bitcoin, right? And we call Bitcoin digital capital, right? And capital has been around since the history of mankind, right? And capital is stocks, bonds, real estate, gold, anytime you're putting money into something for future returns ultimately, right? It's an investment. And capital has been around since the beginning of time. And Bitcoin is the digital transformation of capital. And I'm a technology person. Mike's a technology person. And you know we started running a software company and anytime you can digitally transform an asset class or digitally transform a product you're going to create tremendous value, right? And we've seen that happen really in the last 30 years of our life, right? Google the digital transformation of information is hugely valuable in what it's done and it's created a lot of good I think for humankind, right? Netflix is the digital transformation of video entertainment, right? Apple really started to break through when it became the digital transformation of music with the iPod, right? And so I believe that when you digitally transform something, an asset or a product, that you're going to create tremendous value for decades to come. And Bitcoin took capital. Let's just take gold as an example, right? Why is gold valuable? Gold number one is a commodity, right? It is fairly supply limited in that it's very difficult to mine. You can't make gold chemically. Everyone's tried to, right? And it's not sovereign. Nobody controls it, right? Now like take everything that gold does well and do it better through programming and digitization of gold, right? And so you start with those are the reasons why Bitcoin has been as successful as it is. It's the digital transformation of gold, small, digital transformation of capital, big. And so if you start with that belief that when you create something digitally that is a better form of its analog self you're going to create value and that's great. Now you get into the sentimental part, right? And the sentimental part a lot of people in the US don't quite understand because you live in a country where you trust the government for the most part, you trust the dollar, right? Dollar supremacy around the world. You can take a dollar pretty much anywhere around the world and spend it. People like, 'Ah, you have dollars. Give me your dollars.' Right? And that doesn't really exist in many other countries around the world. Argentina, Nigeria, Turkey, South Africa, right? Like where you don't want to hold the local currency, right? And so if you go around the world, there's been governments that are not trusted. There are wars, there is strife, there's disagreement, there's famine, all generally caused by the government of those entities. And so they need a better way to save money, hold money, right, to prosper in the long term. And in some of these countries, it's not even legal to hold US dollars. You can't change Argentinian pesos for dollars for a long period of time. So that's why Bitcoin became a solution in those other countries. And who knows what'll happen in the US, right? Like, you know, we trust the government. They inflate the dollar. We don't see it day-to-day, but we see it when we go, you know, buy a burger that used to cost five bucks, now cost 11 bucks. So you get the digital transformation of capital and you get the global impact of solving a real macroeconomic geopolitical issue that impacts billions of people. And so when you think about it, how can you not believe in Bitcoin?
Yeah. I agree. I agree with you. The more value you provide, the more wealth you create. And so if you create personal computers for every person on Earth, that's pretty valuable. And to the point that you're making, if you can sort of change people's ability to hold private property and project that value into the future for billions of people, that creates a lot of value. And Americans have a hard time seeing that because we don't understand the problem a lot of times. But we also have to understand that the US makes up 4% of the world's population.
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I think I've seen you talk about maybe even your earlier past that maybe makes it even more personal for you where your family I think you came from Vietnam or your family came from Vietnam and you saw firsthand what can happen when the banks devalue money or seize money.
Yeah, it's so I was born in Vietnam, South Vietnam after the fall of South Vietnam. It was 1975. I was born in 1976. My parents, my mom and dad were I call upper middle class in Vietnam. And to be upper middle class in Vietnam at that point in time, it meant that you owned property and you ran businesses. Right? And so we had all my dad's family had land. My mom's family had some businesses, textiles business, etc. And this is what happens when your government falls to a communist government, right? The first thing they do is they declare all of the currency in the former country null and void, right? So, the South Vietnamese dong, what they said is you, first of all, you can't have any, right? And so, you go into the bank, you turn in, and it doesn't matter how much you had, we'll give you back 200 dong, which at that point was $10.
