EXCLUSIVE: Michael Saylor Masterclass On Bitcoin

Sure. Well, if you roll the clock back to July, we had $500 million of 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 K-shaped recovery. Wall Street came back with a vengeance, Main Street was flat on its back. And it was clear there's monetary inflation. So we decided that we were going to lose a large portion of the $500 million in purchasing power if we didn't do something. My forecast then was probably like 25% inflation, and you could have gotten there just by looking at the S&P index. So I thought, you know, $500 million minus 25%, like losing $125 million in 12 months, is kind of like losing money at 2 to 3 times the rate that the 2,000 people in the company were making money. So we either needed to give the money back to the shareholders or we needed to invest in something. So the thought was, well, if we're a company, a Main Street company struggling against all the lockdowns with all the uncertainty, and we are doing it minus $500 million, it feels like a university giving up its endowment as it goes into a crisis, right? So decapitalizing the company. It was a way to give the $500 million to shareholders; they would have put it in the S&P 500 and they would have gotten 34% on it. If we had done that, we would have in essence left ourselves defenseless without any capital. So that was one strategy. The second was to invest it all. I would have bought $500 million worth of Bitcoin if I was a private company. I just would have walked out, bought all $500 million, I would have done it at whatever, $10,000 a coin. But as a public company, you've got to think about your outside shareholders, and you can't just go to the tent and ask them what they want to do and get their buy-in when you're 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 sophisticated. What we did is we transparently telegraphed that we were looking at this. Our first press release was an announcement that we were going to buy back $250 million worth of our stock over the course of 12 months, and we were going to invest $250 million of our capital in hard assets. And we said we're looking at everything under the sun, and Bitcoin was one of the things. So my first love of the Bitcoin community was the way that I knew I liked all the Bitcoiners. One day later, some cyber hornet, some Bitcoiner goes, 'MicroStrategy is considering buying Bitcoin with $250 million.' Now, as Bitcoin merged in there with gold, silver, commodities, equity, property, real estate, anything you could have imagined, but the Bitcoin community immediately picked up on that. I don't know how they do that, right? They must be scanning for this. Nobody else picked up on it. The stock was trading $120 a share. A week goes by. Literally, you announce you're going to spend $250 million and buy your stock, 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 gonna buy $250 million worth of Bitcoin. We made the decision we're not splitting it across six assets, right? And it's a good thing we did, right? Because Bitcoin's up 332% in 12 months. Gold is down 7%. If we'd split it 50-50, $125 million of gold, $125 million of Bitcoin, right? It would have cost us billions. If we'd gone all gold, it would have cost us many, many, many billions. We'll come back to that in a second. So we had to do something, but the question is what. So we just picked Bitcoin. We made the decision, but we thought this is going to be jarring for some people. Stock is around $122 at the time. Right, to put this in perspective, the company's $500 million revenue generator, generating cash flow, and we have more than $500 million in cash and about 10 million shares. So the company's trading one times revenue plus cash. We give back all the cash, the company trades at one times revenue, the stock goes to $60 a share. Right, so we're at $122, no one's really paying attention. But we said, well, maybe people think this is offensive, they're not gonna like this, or it's 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 you out. We're going to post $250 million to buy back shares at a premium. So we offered to do the buyback at up to $140 a share, which is a 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 in the first week the market's trading at $135. People are not even quite sure about the buyout. Then after a while, they start thinking, 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 worth of shares tendered. Everyone that didn't like the strategy had 20 days of selling to the open market. And if you sold in the 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 sell under the tender. So the result of the Dutch auction is we had $175 million of extra capital. We thought about it, we put 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. Then we bought $175 million more Bitcoin. So at that point, we're up to $425 million. The first tranche is in the $11,500 range. 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 to like into the tens, and even, yeah, you remember that. So the second tranche we bought at $9,000, $10,000 something, because we're committed, right? And if you go pull the Twitter stream, there's all sorts of interesting commentary on our strategy.

I think it was largely ignored by every other publicly traded company. I don't think there's a lot of awareness of it. When we did our due diligence checks, we found Overstock two or three years ago had a few million dollars of Bitcoin on its balance sheet, and that's it, right? We couldn't find anybody else. And 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's 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 companies like Fidelity getting into the space just six months earlier or whatever. But the fact that we're institutional custodians was a big check box. Grayscale was doing good business at that time. So it struck me as being a rational thing to do, but no other public companies had done it, and it wasn't totally clear to me why, although at this point now it becomes clear, 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 were the first person I spoke to. I remember, right? And I learned most of what I knew about Bitcoin 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 the question at the end, right? You're like, 'You can ask me a question.' Remember? Correct. Now you get to ask me the one question. So what I remembered about Pomp was he wants to know a book, 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 how do you learn Bitcoin? You study Twitter and you study YouTube and you 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 get Jack Dorsey to buy Bitcoin next? Correct, right? Correct. And at that point, we're all alone as 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. And so that was a big day. When PayPal announced support for Bitcoin and they started moving it, that was a big day. That was a data point, right? Those were the data points that moved us from $10,000 to $12,000 a coin. And at some point, somebody, some Citron Research, studied my stock, and Andrew Left I guess said something positive, and the stock started trading up. And then it traded into the high $100s, and then it traded into the $200s, 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, 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 Bitcoin. So we started buying more Bitcoin as part of the treasury reserve strategy, and that got people's attention. Then, when the stock got to the $300 range, that was the highest it's 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 were trying to raise $400 million in a convertible debt offering, but it was extremely popular, and we were oversubscribed, so we upsized the deal to $650 million. So that was a screaming home run. We had proposed a 32% to 37% premium, we priced it at the 37.5% premium, the high end of the spread. We proposed like 1.25% to 0.75% interest, we priced at the low end of the interest rate. So we raised $650 million at 75 basis points with a strike price of $398. The stock had not traded at $398 in a decade, so it seemed like reasonable. If you could sell $650 million of stock at $398 a share, seemed like a reasonable thing to do at the time. So then we took that, we bought Bitcoin with that. So we started out with, we're going to raise the money for general corporate purposes, and along the way the discussion was, what are you going to do with it? I said, well, I want to be able to buy Bitcoin with it. And they said, well, we should put that 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 it became we're doing it to buy the Bitcoin. So that became, in the history of firsts, right? We're the first public company to buy Bitcoin on the balance sheet. We're the first public company to declare it a treasury reserve asset. We became the first public company to do a Dutch auction, which is in essence like an equity issuance to buy Bitcoin, right? It's like I'm either buying my equity back or I'm issuing the equity. So with the first Dutch auction, 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 base is long Bitcoin. And it started out, my aspiration was it'd 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, because you were one times revenue plus just the cash on the balance sheet. 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. But if the money supply is debasing at 25% a year, it kills you, right? It's like the road to serfdom is working exponentially harder for a currency getting exponentially weaker. What I saw was 2,000 people doing a hundred thousand things every year to make $50 million, and then watching the enterprise lose $100 million a year due to a political decision. So in essence, we're running as hard as we can, we're falling backwards, and the situation was literally hopeless, right? Like people wonder where the Bitcoin hope comes from. Well, it just was hopeless, right? I mean, the operating business is hopeless. 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. That's operationally hopeless. 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 it's going to be worth half as much in 36 months as it is worth today. The balance sheet is hopeless. And 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. This had been going on pre-COVID, got accelerated during COVID. You started to recognize this again last year. If you go back and look at the inflation numbers in Q3, Q4, I mean it was obvious that we were in increasing or accelerating, but we weren't at 5% CPI for three, four, five months. Right now it's a much, much different situation.

I think that it's a defensive strategy through the Dutch auction. We had to do the Dutch auction to provide a graceful transition for our shareholders to get long Bitcoin, right? You're either long Bitcoin or you're selling out to us at a premium, one or the other. And then from that point, Bitcoin started 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 stopped there, I mean, we would be all equity, $475 million invested at a thousand dollars a coin or something, and that's not a bad result, right? We would have made six extra money. But what we realized is we could borrow money at 75 basis points, and Bitcoin's up 171% a year every year for a decade, right? If you can borrow money at 1% and invest it at 171%, your arbitrage is 170%. On how much? Well, how much do you want, right? Where are you going to stop that?

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 bond 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 the MicroStrategy convertible bond. You could have doubled your money, at some point it was trading at insane amounts, like triple your money on a bond. Okay, so we had good success there. And of course, Bitcoin kept moving up, and our stock kept moving up. And we realized by February that we could do another offering. The next offering, we came in the market offering $600 million. The first one we started with $400 million, this time we started $600 million, but again it was oversubscribed. We upsized it, exercised the green shoe, it became a $1.05 billion offering. And the range was 50 basis points to zero, so we struck it as zero. And it was a high premium, it was a low coupon. The strike price was $1,432 a share. So now put this in perspective: this is ten times the price of the Dutch auction some number of months earlier. Now, why'd we do that? Well, because if you could borrow a billion dollars at zero percent interest and invest it in something going up 170% a year, pretty good trade. Why wouldn't you do it, right? 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 than 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 I 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 say, 'I got $500 million, I'm investing it at 2% interest and inflation rate's 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 hurdle rate, your cost of capital, is not 1% or 2%, it's 10%.' And maybe you're getting 5% yield on a piece of debt, then I don't hold my nose, but you're losing 5% a year. Half-life of the money is 12 years. Okay, fine. But you shouldn't be holding. You should be buying your stock back or buying another company. Sitting on that cash doesn't make any sense. Safety says the dollar-weighted monetary inflation rate across 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 10 years, the S&P 500 is showing 14.15% interest, a 14.15% compounded annual growth rate. Nasdaq's up, you know, whatever, 19%. Gold is up 20 basis points, nothing. Bitcoin is up 170%. And long bonds give you like 2.5%. So the monetary inflation rate equals the S&P index. Well, yeah, the traditional way you'd value a stock is you would put a risk premium on it, and you would say, well, your cost of capital is the return plus the risk premium. So it used to be we think, well, there's a 3% risk premium, and the inflation rate then would be 11%. But I think that if you buy the S&P index, you're kind of in theory stripping out the risk because you're buying 500 companies. So the S&P index can be viewed as a proxy for monetary inflation. And the question of inflation is, what's your inflation rate? Well, what do you need to buy? 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 the market basket of things in the CPI is what the government says you should want in your life. But they never included a Picasso or a jet or a yacht or a house in Miami Beach in that market basket.

Isn't it interesting? The hedonic adjustments kill you. But on the other hand, I say this oftentimes: inflation is a vector. What I mean is, you've got to use multi-dimensional arrays and 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 products, 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 Picassos. 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 I did what I did: if you're the CEO of a publicly traded company, your inflation rate is the cost of capital. And the cost of capital, because your shareholders hold you to that cost of capital. If I go to a public investor and I tell them my goal is 2%, and they're saying, well, the S&P is up 14%, then I'm undershooting their goal. Their index is the S&P index, right? So the inflation rate for an investor is the index. Now, of course, different investors have different impact decisions. If you go back to the strategy, if you're a fixed income investor, you've got a sovereign or corporate fixed income rate. You've got the junk bond index, you've got the corporate 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. And someone that wants to be obscenely wealthy has a different index, right? So that's why everybody's 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 CPI, the PCE indexes, they get rebalanced. So the indexes are changing. And if you allow someone else to feed you the index they want you to focus on, you can see it right now. The official inflation rate in Canada is 4%, but the housing price is up 15%. The official inflation rate in the US is 5%, but the Case-Shiller index is up 27%. Okay. And it all comes down to deciding what you want in life. Now, in the last 12 months, the S&P is up 34%. If you're sitting on $100 billion worth of cash and you put it in the S&P index, you got $34 billion back. You have $134 billion right now. If you held it in conventional treasuries, you're short $34 billion. If you convince yourself that the inflation rate was 5%, or if you convince yourself that you could say, 'Look, my treasury index is just the short-dated sovereign debt index, and so as long as I'm beating the 20 basis points, I'm good.' And by the way, 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 come to me when I'm sitting on $100 million or $200 million in cash, and they go, 'We can get you into one of our money market funds that'll 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 that make a lot of money, and they're selling it to me. And you read the prospectus, and the prospectus is they're gonna do something and they're gonna charge you a 27 basis point fee to generate 22 basis point yield to you. You're literally making more money than you are. You're giving 60% of the yield to someone in a suit that's giving you a service to get your five basis points more. But there are people that convince themselves this is a good idea, right? And we come back to that second. It is an important truism in the market. Why is it that everybody hasn't bought Bitcoin? 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? 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 index. And if they beat the sovereign index, if I have $20 billion and all I got to do is beat the junk bond index, or I get paid, then I'm getting paid to invest $20 billion to get 50 basis points more.

I think a lot of people have a hybrid situation. For example, let's say I run a real estate trust or I run a real estate company, and I have $100 million a year worth of rental income. It's capped at CPI. The leases are signed for 10 years, 20 years, 30 years duration, five years duration. And then you've got all the trade relationships. I can't go to the people that rent my building and tell them that the inflation rate's 14%, right? I mean, would you pay a 14% increase in your rent here? No, no. So there's a certain inertia in parts of the economy where they're going to move up at CPI, or they're going to be flat, or maybe they can do double CPI. But at the same time, maybe you're the person running that real estate company. You're thinking, well, I'm going to take my cash flows and I'm going to invest them. Would you invest them in a stock that you thought would go up at CPI, 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's low growth, and they're putting it in the S&P index. If you know they're looking for the growth to come from the investment, okay, the S&P is up 34%. How many companies in the world generated 34% more cash flow or raised their prices by 34% or grew their revenues 34% in the last 12 months? Not many, right? 98%, 99%. They're in a fiat operating system where they're going to raise their prices or generate cash flows at a rate slower than the rate of monetary inflation. But those same people will turn around and they'll buy Bitcoin, or they'll buy property that 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% in the 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. So on one hand, residential property or other types of property could actually be accreting at a much higher rate while your rents don't accrete at a higher rate, so you're taking duration risk. So I guess the more important point is there's a lot of capital. When we think about capital structure, it's like $500 trillion to $900 trillion of capital floating around there. It's locked up in structures. Some of it is in currencies and it can move rapidly. Some of it is invested in companies that can't move rapidly. Some of it is tied up in equity, some of it is tied up in debt. Some of it's tied up in a trust. My trust gave $10 million 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, it could take 30 years for the capital to get reallocated, right? Like we're waging a war on the 60/40 portfolio, right? How long will it take before people allocate that as 65/35 or 70/30? It takes a long time. There are people still invested in gold. You and I joke about that. Gold's been failing for 12 years or something like that, right? Gold's the same price as it was when Bitcoin was invented. And yet, an aggressive move would be a macro investor allocating from 50% gold to 45% gold and 5% Bitcoin. And that's a year's work.

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 seeing support for... let's start with the most basic issue: is Bitcoin an asset or a currency? Okay. The word 'cryptocurrency' is a very politically charged word because if Bitcoin was a currency, it's an opposition to the US 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 well-regarded investors have made negative comments about Bitcoin over the past 12 months because they're mistaken? They mistakenly 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 digital asset or a store of value asset. The first impediment is just understanding that and educating the market that it's a digital asset. I think the second impediment is getting over the issue of, is it a threat to the powers that be? Will it be banned? So first, what is it? It's an asset. Second, will it be banned? Okay, well, no, 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's been doing business with probably the same bank for 30 years, Pomp. Some have been doing this with the same bank for 50 years, some for 100 years. Okay, if you trace it, to have adopted a new banking relationship is not a one-in-a-decade thing. But public companies don't change in a decade, right? So if I could buy this directly through Bank of America or JPMorgan or Citigroup, etc., I think that makes a big difference. If I have to go to an institutional-grade Bitcoin exchange, that's a one-year exercise in due diligence, right? Friction to doing it. There's two issues, right? One is, before you give a billion dollars to a counterparty, 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? That's a huge hurdle. And the second is they're not FDIC insured, right? They're not the... The implicit being backed by the US government means that in a liquidity crisis, the Federal Reserve gives you $10 billion or $100 billion. How much money did you need, right? And that's what the big license banks have. And the last holdout that wasn't doing that was Goldman Sachs, and in the Great Financial Crisis they broke down and they became a bank, right? And it matters. So if you want to move huge sums of capital, 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 next hurdle is accounting. Explain what the accounting problem is, because this I don't think a lot of people understand how big of a problem this is. 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 in 30 seconds look at your balance sheet and know how much capital you have, and in 15 seconds look at your P&L and know whether or not the business is well run. And when the GAAP 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 issue right now, and the issue when we got into Bitcoin, is no publicly traded company held any material Bitcoin. 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 test it 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 $100 million a year and it's run perfectly with a perfect 20% operating margin, right? If you buy Bitcoin and Bitcoin trades down for one hour and trades back up again, you might have a $100 million 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 and saying, 'What happened to the software business? It looks like the operation got wrecked.' If I made a million decisions poorly, I probably couldn't go from $100 million in cash flow to zero, right? Or if I did, it'd be challenging. But on a Saturday night, someone could flash crash something and you would have a $100 million loss showing on the operating statement. So indefinite intangible means you'd 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, okay? You take the theoretical worst case and you represent that 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, it 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 intangible, your books say you have $500 million of assets, and it says that you lost $500 million in the operating business, and the money's gone. That's what GAAP accounting says. In actuality, you might have a statement that says you have $10 billion of assets, and it looks to the casual observer like you generated a $9 billion investment gain. So how do you fix it? Pro forma adjusted accounting. You have to create a schedule, a reconciliation. But now what have you done? You've just made the investor's job 100 times harder. And investors have got to read all the pro formas, think about it, figure it out, 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 looks like. And then the second problem you have is your statements become non-comparable over time. 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 100, the balance sheet doesn't change. So when you're comparing quarter versus quarter, there's no information there because you're suppressing it, right? Yeah. And then if two companies have Bitcoin, one company has 100,000 coin and one company has 10,000 coin, and 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 you're invited as an investor to create your own set of pro forma systems to compare yourself, which is like 1,000 times harder. So that's an impediment for a public company or for a company that relies upon GAAP accounting. But here's where it's really an impediment: why can MicroStrategy do it? Well, because we rotated our shareholder base to be long Bitcoin, and because fortunately enough, we were able to build a substantial Bitcoin position. So now if you know that MicroStrategy has 114,000 Bitcoin, yeah, if I have 114,042 Bitcoin, all you have to know about MicroStrategy is take 114,000 and multiply by the price and you know...

Yeah, well, so there, I joke with people, right? You'll be better off buying baseball cards or art or just about anything than buying Bitcoin from an accounting point of view. Because if you were to buy a sculpture or some random anything, normally the test would be like once a year you check to see if the asset's been impaired. But checking to see if an asset's impaired occasionally is much better than checking to see if the asset's impaired every minute of the day, right? So there are different types of accounting treatments. But if you were to buy a billion dollars worth of a security like an ETF, one immediate fix is you buy a billion dollars worth of a Bitcoin ETF. It's not property anymore, it's a security. If you're owning a security, generally accounting says you value securities based on fair market value or fair value accounting. So that means that if it doubles, you would show an investment gain. This is Warren Buffett's accounting for Coca-Cola stock or for Apple, right? So fair value accounting is applied to securities. Fair value accounting is applied to certain other things. If the accounting goes from indefinite and tangible 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 a below-the-line adjustment. Like on a quarter where it's up 2 billion, you would have a 2 billion investment gain, and a quarter where it's down 500 million, you have a 500 million dollar investment loss. And that provides more clarity. It's kind of a benefit to investors because an investor 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 if the core business is healthy. If Warren Buffett prints 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 then I can extrapolate out rationally. So ultimately, I think fair value accounting is the solution to allow public companies to hold this in large quantity. This is why even a Tesla or Square would buy not a hundred percent of their balance sheet or fifty percent, but five percent. If it's five percent or one percent or two percent, it's not going to be material to the rest of the P&L and the rest of the balance sheet. When it becomes 50, the volatility from the accounting treatment will optically impair transparency against the P&L and the rest.

Okay, well, first I would say it's not just the three. There's probably three dozen. But every Bitcoin miner is holding Bitcoin on his balance sheet. And one of the major 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 stock 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 has got a Bitcoin exposure. I wonder when Silvergate Bank will, or how that'll work, but Silvergate's obviously a Bitcoin company. Coinbase has got Bitcoin on its balance sheet, right? You've got Bitfarms, Hut 8, you've got Sphere, you've got Bit Digital, you've got Galaxy. You know, 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 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 SPACs. 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 what is the catalyst? I mean, clearly one thing that's already happening right is the regulatory clarity that's coming. The more clarity, if the regulators move forward and they clarify the treatment of stablecoins and security tokens and DeFi exchanges... I feel like the connection of Bitcoin to crypto has been holding it back, right? Because stablecoin regulation is unclear, security tokens, that's holding us back. The exchanges that are trading Bitcoin while they're trading security tokens, right? The connection of Bitcoin to SHIB or Dogecoin, right? This holds back a public entity from wanting to get into that space. I mean, in fact, it's really the express 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 it off-hours, right? Against thin liquidity pools of other security tokens, right? And so as that clarity comes with regard to the entire crypto ecosystem, it's going to decrease volatility and it's going to increase confidence of large public investors and large public companies. That'll be part. I think if we get clarity from FASB or any kind of improvement in the accounting situation, that's a plus. And there's a groundswell of interest, right? There are 515 letters sent to FASB on the subject, and there was a lot of commentary from regulators, from congressmen, from senators, from auditors, from big institutional investors, from big publicly traded companies, and they're all opining on the issue. And I have yet to see anybody, I haven't seen any articulation by anyone suggesting that the current accounting treatment is beneficial. So it's broad-based consensus that it's time to take a look at this again. So I think that accounting is important. I think that we just see the barriers with the banks 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 the 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 own Bitcoin, but now I think we flipped to another observation. And this is an interesting one. In that stablecoin working group paper that was released last week, not only did they say it's okay for FDIC-approved banks to hold stablecoins, they actually said it's required to be an FDIC-insured bank to hold a stablecoin. Okay, so we're actually growing up as a crypto industry. We're going from unlicensed, non-institutional grade corporations that are primarily entrepreneurial 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 light? JP Morgan, Citigroup, Bank of America are going to issue a trillion dollars worth of stablecoins. I mean, it's an invitation, it's a green light to every single bank in the world, right? If you're Silvergate or anybody that's in the crypto industry now, right? This is a message. I don't think it's that much longer, right? If you can hold a stablecoin as a digital asset, it's not that much longer before you hold Bitcoin as a digital asset. And if the FDIC is saying we need to find a way for banks to be able to hold this, and if the President's Working Group is saying you need to be a bank in order to hold this, the stablecoin, then I think that sometime in the next 12 months, we actually start to see large banks getting in the business.

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, Bitcoin's going to people who have politics that you disagree with. 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.' Is it good or bad for people to be able to read and write? It used to be there was a concern that we shouldn't let everybody read and write. It's just basic technology. It's spreading as fast as it can spread. The reason it's superior to gold is because I can snap my fingers and I can withdraw a billion dollars of Bitcoin from the bank in five minutes, correct? Okay. And the thing that's going to maintain its integrity is the fact that 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 are 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... 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 sell out? Now there's a company that's got other corporate interests that has some Bitcoin. A lot of people don't want a 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 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? Do I not like it? The point is, it doesn't matter what you think, right? 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? Right. And in this particular case, is this good? Yeah, of course it's good. Right, why is it good? It's good 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 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 can fix them, right? There are a lot of people who don't want to fix them. They don't want Apple or Google or Facebook to fix their balance sheet, they don't want them to fix their product. But on the other hand, I'm an optimist. What do I think? I think eight billion people should be 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 to topple every government in the universe, destroy every technology company, and create my own hardware wallet and my own decentralized... Well, let's rip back to the network, destroy every big tech platform, destroy every big company, and somehow let's build something 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 a stablecoin, a token called the US dollar, right? A US dollar stablecoin, and we go from 130 billion dollars in stablecoins to a trillion dollars of stablecoins to 10 trillion dollars of stablecoins to 100 trillion dollars of USD. And then eight billion people have an iPhone or an Android phone 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 that's the best, right? A decentralized, non-custodial network moving at 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 or Layer 2 or Layer 3 application, right? That's second best. And they do it without toppling every government on earth, right? I can't... There's 130 currencies that are floating right now. 130. How many do we need? Well, we certainly could get by the next step with 12, right? The CNY 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, chaos, and it would be a very painful situation for everyone. So if you look at an optimistic view, let's just actually make the world a better place and a win-win for everybody.

Partially, but 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 incremental upgrade means we deploy to eight billion people, to everybody on the planet, we deploy digital wallets. And in the wallet, you have a set of currencies and 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 a peso. If you want to hold it for a month, you hold a 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, we need Bitcoin pizza. Someone's got to manufacture the cameras that are staring at us right now, got a microphone. We can't just have one asset, we have multiple assets, we have multiple currencies. Will all currencies survive? No. The weak ones, the ones that are truly defective, will go away. 66 countries are dollarized. There's 180 countries in the world. How many currencies do we really need? 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 will you do though? 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 currency, and it's called 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 a hundred million companies, Pomp, that have invested 30 years to create accounting systems and point-of-sale systems to 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 Bitcoin? That would be a billion times harder, okay? And it's not worth a billion times more stress and effort. It's not worth it, right? In an inflationary environment, money decomposes into a currency layer which is losing value, slow, hopefully slowly. If your currency lost value one percent a month but your asset gained value at 15, 20 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 sheet, 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 backed by Bitcoin. I'm not denying that. If Turkey goes and buys billions of dollars of Bitcoin, they can keep the currency. They would be backing the currency with a hard asset. How many institutions are there in the world that need some control? 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 companies and without countries. When you figure that out, that's like a utopian idea. Then maybe you can live with Bitcoin only. 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? Focus on the next decade. The next decade it works like this. All the big banks issue USD stablecoins. 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 countries 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? How do you send a hundred dollars to someone on Saturday afternoon if they live in Africa, if you live in South America? How do you send it to a friend of yours in Paris on a Tuesday? I dare you, right? So the point right now is the US dollar is the world's reserve currency, but it's running on 20th century rails. So the US dollar should evolve to run on crypto rails. It should run on, you know, we can debate Lightning rails, what's up rails, any other crypto, right? Interesting question. But what we can't debate, which is 100% 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 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. It's a win-win here. It's in the best interest of the dollar to move at the speed of light and be programmable. And there's a hundred million businesses that want to do business in the dollar. And I am the controlling shareholder of MicroStrategy. I founded 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 stop and sell everything and pay everybody in satoshis, you know, 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 mediums of exchange and its accounting systems for routine transactions. 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.

Well, if you're Apple Computer, right, you've got two strategies you can pursue to get in the digital economy. One strategy is you just buy 50 billion dollars of 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 if Bitcoin moves up at 100% a year, right, you're generating 50 billion dollars a year of shareholder value. Three people, 50 billion shareholder value, right? It's a very simple strategy. The harder strategy is 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 build it into all of your other services. And they all have merit, and that's an operating strategy. And at some point, that starts to correlate your revenues to the growth of the digital asset economy and the growth of Bitcoin. So both of those are rational. What's not rational? What's not rational 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, right? And you can control what your strategy is, but implementing it on your customers or to rewire all your backend accounting systems is unnecessary, right? It's not the right way. So coming back to my view of the world, I think my view of the world is we want to find the path of least resistance to fix everything. And that means looking at every single part of the economy. Every country will be better if they had some Bitcoin. Cities can be improved if they buy Bitcoin. If a city buys Bitcoin and they issue bonds, the bond becomes a Bitcoin-backed bond, right? It becomes a derivative of Bitcoin. So I'm not against bonds, right? I'm not the guy saying we shouldn't have bonds. We should have bonds. If the junk bond index is four percent and you can issue a Bitcoin-backed bond at six percent, 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. We could take the orthodox, draconian view which is bonds should go away and Bitcoin should replace them overnight, but it's not possible, and it's not even a better view, right? A better view 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 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 worry, 'So I have seven billion dollars or eight billion dollars of Bitcoin, I don't have any more power than anybody else,' right? And in fact, the only sentiment that's grown in my mind as my Bitcoin position has grown is I don't want anybody to change it. Like, don't mess it up, right? So I think that I'm not threatened if a government buys Bitcoin. It wouldn't be bad for Bitcoin, right? I'm not threatened if a company buys it, if a bank buys it.

I think that one of the great advantages of Bitcoin is it's money of the people, it's money for the people. And the combination of the fact that it's permissionless and it's open, nobody controls it, means 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 the first line of defense of your immune system, right? It's what makes you healthy. The Bitcoin mining industry is a 22 billion dollar a year industry right now. That means that the protocol is creating a 22 billion dollar subsidy for Bitcoin entrepreneurs to go out into the world and find supportive political jurisdictions. 22 billion dollars per year. So when you think about that, that means that the miners themselves, they have to raise capital, but you see the Bitcoin miners are ripping today in the market, right? All their stocks are up. And they've been very successful. You can take a Bitcoin miner public. You're not going to take a proof-of-stake validator public, right? One of the big differentiators is the miners. The miners 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 lots of jurisdictions can see the benefit of Bitcoin either as sound money, right? All the holders are a political constituency. And I guess we're going to get close to the point where we're going to flip 50 percent of the electorate, right? There's going to be a Bitcoiner in Congress, there already are. There's going to be Bitcoiners in the Senate, they already are. And eventually a Bitcoiner will be president. It's not necessarily because they're going to run on a Bitcoin-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 the United States and hold Bitcoin, right? It's the most part. Bitcoin is the greatest brand in the history of the world. First observation: it's the greatest brand in the history of the world. What's brand value? Brand value is monetary premium. The monetary premium of 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'm not counting the dollar because the dollar is an inflationary asset, it's not an investment. If you pick an asset that you could reasonably expect to protect you against inflation, Bitcoin becomes the most popular one. Other than just random real estate, just owning land, I guess land was maybe the most popular one. And Bitcoin is that digital property. So how do I buy all these other things in Africa or Asia or anywhere, right? 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? I mean, so I think that the left and the right can both agree on that. It's pretty clear. It's high velocity money, higher velocity than anything, but it's a high velocity asset. It's a bank in cyberspace, but it's a franchise bank. So anybody on earth in any jurisdiction can create their own franchise of the bank. And what that means, right? Paxful or, you know, fill in the blank, every crypto exchange in every country on earth, when they're selling you Bitcoin or exchanging Bitcoin, they're in essence creating a franchise bank of Bitcoin where they're marketing it. 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 that deals in Bitcoin. And then it's spreading through the Bitcoin miners. They're the security providers. So the security, the network operators, and the bankers 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 Bitcoin bank. Coinbase is a Bitcoin bank. Binance is a Bitcoin bank, right? And when you look at Marathon and Riot and all these Bitcoin miners, they're the other side of the network. So I think that it's inevitable that more and more politicians begin to support the network. Not everyone will, but the game theory of it is such that the more hostile one regime is, the more lucrative it is for another regime, right? It was a benefit to the United States when China banned Bitcoin, right? Cracking down on Bitcoin mining was a gift handed to the West. And 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 so... Bitcoin mining is the most lucrative use of energy in the world. Oh, that's hands down in the world, very provable and very verifiable. 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're thinking, 'Well, shouldn't we expect an avalanche more of political support?' And the answer is yes. And why is it stable? It's stable because the Bitcoin miner 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 Bitcoin is Bitcoin is creating an opportunity. It's an opportunity for your family to save money for a hundred years. It's an opportunity to fix your company. MicroStrategy stock is 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 an opportunity in the media business, right? I mean, nobody wants to talk about anything but Bitcoin. Everyone wants to talk about Bitcoin. It's an opportunity for Twitter, it's an opportunity for every mobile app.

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's sit there for a decade and you can't do anything with it. 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 can decompose the hotel to room minutes, and 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, a 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 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 can put it on the balance sheet of your company. 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 competitive 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, and the government level. So when you think about it like that, right, you realize that it just makes sense, and it's going to grow. But what was the second part of your question again?

Yeah, yeah, I remember what I was going to say now. 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 the Bitcoin network, you can be...

A crappy retailer or a bad mayor or a bad father, right? So it doesn't solve that problem. I think we boil down to a simple idea, which is everybody's got a balance sheet, everybody's got a P&L. 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 retailer, so your operating business, you got to be really laser-like and good at it. But by plugging your balance sheet into Bitcoin, you have hundreds of millions of people guarding your back that are energizing the network. And you know, 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 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 a thousand meters away, right? And a navy. So you see that over and over again, right? Steel trumps iron, and iron trumps bronze, and bronze trumps stone. Right? You pick up a stone—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 iron, then you beat the guys with the bronze. If you had the steel, you beat the guys with the iron. You ever seen steel forged? People don't think about this: walk into a steel mill, look around, what do you think is going on? Right there, they're channeling immense energy—the fire, the heat, or electric rolled steel—massive energy into metallic form. Air power is 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, where Norm Schwarzkopf used to show the videos of the laser-guided bomb? Something that's in the clouds, dropped the bomb, that managed to hit a three-by-three space from 50,000 feet up through the wind, right? So the channeling of the energy through time and space, and being better at channeling it, that explains why every team wins in sports. That's why Tom Brady wins. Because the quarterback puts the football in exactly the spot you have to put that football in that space, in a plus or minus 10-millisecond time spot, 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 guy that's better at it than everybody else. And if he didn't have the team, they wouldn't win. So every winner is better at channeling energy through time and space. Every civilization, every city, every company, every investor. So the real power of Bitcoin is that 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, but it is a magic spell. Any sufficiently advanced technology is indistinguishable from magic. Bitcoin is digital energy. The next best thing is electrical energy. It's not information. 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 which country is going to win the war, the one that masters air power—the first half of World War II was air power, sea power, the British controlling the seas—or how about nuclear power? What could nuclear power 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 doesn't guarantee you win. A gun is channeling with precision, chemical energy or explosive energy. It's pretty obvious if you think about it: guns, germs, steel—you're channeling energy. Lord help you if you're on the wrong side of that. But if I 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 the history of war and the history of civilization. But ultimately, what history's telling us is the team that is most coordinated, that channels energy, always wins. And Bitcoin—Bitcoin's 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 the deck is just stacked against everybody else. Now the question is just who's going to jump on it and how fast: which politician, which big tech company? If Apple gets on Bitcoin, 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 you become a 10 trillion dollar bank. If they do it or they don't do it... The world's full of examples of empires topple because they did not embrace a new technology. The Romans needed the Etruscans to whiff, and for the Greeks to take their eye off the ball, and one thing leads to another. And when you get enough power, 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 asked the question: 'What do you think of Bitcoin?'. Everybody: the premier of Russia, every world leader, every major investor, every major influencer—everybody's got to have an opinion. Ask yourself the question: how many of them spend 100 hours studying Bitcoin to form an opinion? I don't think there's a single person with a negative opinion that spent a hundred hours studying it. I don't think you're out on a limb there. I just think the world's full of people that haven't spent ten hours studying it. And yet if I walked up to you in 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 manufacture food using electricity instead of steam power or mechanical power.' Okay. How many people would stop and study it? And how many would think they would master it and figure it out with one hour of consideration? Would you know how to wire Hershey, Pennsylvania or a meat packing plant or a ship with electricity in a hundred hours? A thousand hours? How many hours does it take to figure it out? And what are the consequences of not figuring it out? I think the consequences are: over 30 years, you go out of business. Right?

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 if you're buying it with leverage, or with a mark-to-market loan that could cause you to get forced liquidated. So if you had a million dollars sitting around, you just buy Bitcoin and hold it. Can you borrow ten billion? Can you borrow ten million dollars to buy Bitcoin? I wouldn't buy it at 20x leverage or 10x leverage or even 5x leverage, because the significance of prices: you look at the volatility and you ask, 'What's the likelihood that it will trade down 50% and I'll get a margin call and get force liquidated?' If you have margin debt, you can theoretically get a margin call. If you have long-dated debt—if you have a seven year loan, we have a seven year loan and we bought five hundred million dollars of Bitcoin at $36,000 a coin. What's the odds it'll be $36,000 a coin in seven years? I'm not so concerned about it. So I think the way to think of it is: here's my model for Bitcoin. Bitcoin's price is going up because of inflation. Stock-to-flow says 14%, right? We know that. In the absence of everything else, if you had complete adoption, if eight billion people had Bitcoin, and the U.S. dollar was the world currency and we inflated it 14% a year, then you would think Bitcoin would go up 14% every year as the currency kept getting inflated. So the price of the dominant monetary network or dominant monetary asset goes up by inflation. And the second dynamic is adoption. There's a rip: if there's a hundred billion dollars of demand for Bitcoin, then it's going to go up faster than 14% 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 1% adoption to 2% adoption, you could imagine that the price could double just because the adoption doubled, even with no inflation. Right? Correct. And then the third driver is utility. This is common sense. Have you ever sent Bitcoin to anybody else on the main chain and wanted to send 37 bucks, and it takes you an hour with a fee? And then when Cash App came out, you could just send it by a hashtag. Or you get Lightning, the proprietary way called Layer 3, or the Layer 2 Lightning ways. I got 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. Did it not make you think that Bitcoin is more valuable? Bitcoin's utility explodes if I can move the money at the speed of light on Layer 2 or Layer 3, and if I can do a billion transactions a day. Or let's take El Salvador: three million people download a wallet and they start doing remittances. Is there demand for Bitcoin? Sure there is. So as the technical utility increases... and by the way, the technical utility drives and feeds back into the adoption, because there's three million people in El Salvador that now have 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 100 million people with what's low utility—I buy it, I hold it for 100 years, that's low velocity—100 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 the adoption's not just user count. If you're building the model, you would say: how much money? People talk about Bitcoin and network effects and Metcalfe's law. But if you're thinking a bit deeper about it, you're thinking Newton's law of gravity applies. If you bring a hundred billion dollars to the network and you're one person, that's more important than if you brought a dollar to the network and you're one person. So you have to do a dollar-weighted assessment of adoption. And you would almost say the value of it is a function of the total amount of capital plus the velocity—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 up. 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—holding it is one thing, leasing, 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 create a trust that's good for the rest of your life and the life of your firstborn child for the next thousand years, and it's an app and I just fund it with two 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. I can create insurance policies, I can create trust funds. What if I gave you 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 a non-maintaining car. It's like I hand you something with an endowment. Right? So as that happens, as you get more money flowing on the network, 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 as I said, it's the language of money. What's that mean? It's like English. How long's it been around? A long time. It's like base 10 math. Here's the thing about it that people don't get: Bitcoin 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 2 math and base format. 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. And that's the part that people don't get. So when I say it's going up forever, I'm saying: will the technology get better? Obviously. Will adoption increase? Well, I guess you could say it gets pegged out when adoption is eight billion people. When everybody's adopted it, technology keeps advancing, inflation continues in whatever other currencies exist. And at some point theoretically, if all the other weak currencies failed—you think we go from 130 currencies to 100 to 30 to 12 to 10, maybe one day there's the dollar and the CNY, you're down to two, and then maybe we decide to throw away the dollar and the CNY, we get enlightened and we just use Satoshi's. Yeah, and you get perfect Austrian economics hard money. Maybe it doesn't matter to me if we do or we don't. But let's say we did. Well then it goes up with the productivity of the civilization. If the civilization has 5% productivity growth, and everybody's adopted the same money, then you've got 5% growth. And until that, you're going to have faster than the productivity growth because you're going to get these rips, these accelerations from technology and adoption and fiat inflation. In the frame of reference—right, it's useful to see the frame of reference—is your frame of reference the peso, is it the bolivar, is it the U.S. dollar? And in that frame of reference, the price is going to adjust.

I think for a person, you just say how much money do I want to store for the next decade or maybe hold for life? How much long-duration property? If I said you're going to invest something for the next 30 years and give it to your grandchildren, hold it in the family endowment—I would put that amount of money in Bitcoin. 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 Doge versus Shiba 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. And I think that all personal money falls into those three categories: it's either an investment, a speculation, or an endowment/savings account. For a business, that's different. Some businesses are traders. If you're a trader and you think you can out-trade someone else, you better be thinking about it 60 hours a week, you better have proprietary computers and proprietary models and know the markets and the arbitrages. Then you could trade. Citadel trades, Renaissance trades, other people trade, Goldman Sachs trades. So I think they can be traders. And then also, when you get into business, businesses have other options. 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 businesses have different financing capabilities than people do. And then your business has strategic assets. If you're Fidelity 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 into the mobile app. If you build phones or devices, you can build it into the device. One thing I think with the business is clear: you just should be laser-like focused, and you should think that when the dust settles, I need to be the best in the world at what I do. For example, it wouldn't be a good idea for me to go into business competing with Fidelity—they have 11 trillion in assets. I'm not going to launch a Bitcoin investment fund. I'm not going to go into business against Square or PayPal either just because I think it's a good idea. So businesses need to be laser-like focused on competing and growing in a creative fashion for their shareholders. And also, businesses have shareholders to manage and shareholder relations. So there's that phrase: 'If we want to go far, we need to go together.' So for a business, it's very important of shareholder alignment. Would you rather have $10 billion of capital and get a 10% return, or no capital and get a 30% return? A business has to keep their capital aligned. So a lot of times they'll do things that are either optimized for their shareholders or optimized for their other constituencies. And businesses have regulatory nexus: there are certain things that I can't do if I'm a bank in China or if I'm a bank in the U.S. So businesses have compliance issues, and individuals don't. So that's how you think about that.

Look, I'm running the business just like any CEO is running the business. If you were to ask Jeff Bezos, 'What are you thinking about on days when Amazon stock is down?', he would say, 'I'm not thinking about it. I'm thinking about fixing the business, running the business, and the stock will take care of itself.' And that's what I think. I'm looking out for seven years. I'm saying, 'How do we educate more people on Bitcoin? What's my next deal that I'm going to do?' If my stock is down, I'm going to issue debt. If my stock is up, maybe I can do a convertible. 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 can't control. And so you just wait. You got to figure that in seven years, the market will sort itself out. In seven months, it likely will sort itself out. And if you want to drive yourself insane, then you zoom in. If I zoom in close enough, if I just look at 0.001% of your face for 18 milliseconds, I bet I can find some protozoa bacteria crawling around somewhere, and it'll freak me out. Right? If I want to drive yourself to apoplectic fits by inducing this anxiety. So the way I look at volatility is actually the truth is I just say this: volatility is the price you pay to get 10x the performance of the S&P. If it wasn't volatile, then would I have been able to borrow $2.2 billion at 1% interest and buy $7.5 billion worth of it starting with $250 million in capital? I like the fact it's hard. I like the fact it's scary. I like the fact it's volatile. What you really want—this is what you 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, there's a pot of gold at the end. And there's only two seats, and there's ten people. And only two of you get on. So the two of you guys, you're like, 'Oh, there's a pot of gold at the end? Part of Bitcoin at the end?' Yeah. You're like, 'Okay, well, we'll sign up for the bumpy ride. What else we got to do?' And everybody else is 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 a Jeep in 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: 'When every bank can hold 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's going to buy trillions of dollars of Bitcoin. The price is going to the moon. You're not going to afford the Bitcoin.' When I make it a smooth passage—you're going to wait until there's a train or a plane that flies across the country, or you're going to get in a wagon and go west, young man. So I'm like—the joke, of course, is it's volatility, but it keeps going up. People like, 'Well, how else do you want it to go up?' Right? I mean, it's going up with volatility. So I think 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 it transfers wealth away from people that are afraid of volatility. It's not really afraid of volatility. I mean, Amazon was volatile. A lot of people made a lot of money on Amazon. A lot of people made a lot of money even venture capitalists accept 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 much less understood. And I think probably the Sharpe ratios would actually bear that out, because we looked at volatility and adjusted yield.

I really think that for the next decade, the screaming home run architecture is digital currency as the U.S. 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 100 million companies have their accounting systems wired for dollars. And I think they want to use the store of value. I think if you had a hundred dollars and 99 are invested in Bitcoin and one dollar is invested in the USD, you have 99% of the benefit. In fact, it's not even that. You don't have to give up anything. If you have a million dollars, you put a million dollars into Bitcoin and you borrow a hundred thousand dollars in USD as a stablecoin, and then you pay your bill in the USD while the Bitcoin appreciates. So the net balance sheet ratio is 100% Bitcoin, but it doesn't make the currency go away. MicroStrategy has more than 100% of its balance sheet in Bitcoin, but we still use the currency. So what I think will happen: if you really want Bitcoin adoption to take off, you don't want to squeeze out the stablecoins. I think that the USD stablecoin is actually going to drive the explosion in Bitcoin. The use case of stablecoins up until now has been crypto exchanges settling offshore—they're settling crypto exchanges. We didn't use stablecoins at MicroStrategy for anything. We don't use stablecoins to buy Bitcoin. So what you want is you want eight billion people to use a stablecoin to buy coffee. And you also want Amazon and General Electric and Apple to remit cross-border treasuries in stablecoin. And why would you do that? Because you can move money at the speed of light on Saturday afternoon for free. Right now, MicroStrategy can't move money cross-border at the speed of light for free. Would we use a stablecoin to move USD? Yeah. Would we move Bitcoin? Well, we might flash it into Bitcoin for a second, move it, flash it back into USD. Strike and Jack Mallers, we might do that. But I actually think that what the world wants—not just the world, every consumer in South America, Africa would love to have dollars in their wallet. They know that now. Everybody knows they want dollars in their wallet. So the U.S. dollar could spread to six billion people, it would spread to eight billion people. The Chinese didn't block it. It'll spread to 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, spreading like a virus. Every government knows they want to control their currency. The strong governments will—the U.S., the Chinese, the EU will. The weak governments won't. Afghanistan, Venezuela, places with hyperinflation, Zimbabwe—they will lose their currency privileges because they're weak. And who will they lose them to? To the dollar. So what I think is happening is you're just going to see an explosion in the dollar, an explosion in Bitcoin, an explosion in demand for money moving over Lightning rails. If you could move stablecoin over Lightning rails, that would accelerate the growth of Lightning. The killer application I want on my phone is a Lightning wallet with USD stablecoin and then Bitcoin, and to be able to move either of them at the speed of light in a programmatic fashion. And I think they both win. Who loses? The dollar must lose so Bitcoin can win? No, who loses is weak assets and weak currencies. Can you think of a weaker asset than Bitcoin? Every other investment asset—especially gold, silver, commodities, land, stocks, weak value stocks, and big tech stocks—they're all weaker assets. So you see money flow from there—there's $500 trillion of them, by the way. We have $500 trillion in weak assets. If you got the $10 trillion from gold, we'd be up by a factor of 10. So I think weak assets flow to the strong asset. And then weak currencies—how many currencies in the world are weaker than the dollar? Name one 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, a lot are pegged to the dollar; 130 floating currencies. They all can be replaced with the dollar. So who wins? Western banks, western technology companies, western hardware devices, the western world, the United States, western Europe. Who wins? Everything embraces Bitcoin. Who loses? The nation of gold. I mean, you want to declare a war on something? Declare a war on gold. They don't have an army, they don't have an air force, there's no politicians running for office of President of Gold. There's no city-state, no country. No one is crying thinking that their way of life will come to an end if gold got demonetized. So if I had 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 Saylor. You have all the stats—it's been demonetized for the past decade. 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. You can't mortgage your gold, you can't lien your gold, it's hard to rent your gold or license it or develop it further. Gold is not big tech. You can't put gold on an iPhone. So ultimately, what you have is two things that should succeed and grow: the U.S. dollar—if you live in the United States and you believe in western values and freedom and justice and western law and the progressive movement, you want the U.S. dollar to grow—and instead of saying the dollar is a problem, just point out that if you live in Africa and Asia, you would give your left arm to trade in dollars. So the dollar should expand on Lightning rails, and Bitcoin should expand, and they go together, and we all win. There's no—I mean, we all win. The world's a better place. Every company, everybody wins. 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 have to destroy the banks, 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 eliminate PayPal. 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. Declare war on the rock. The rock has been losing for a while now. And after you're finished declaring war on the rock, declare war on dead property, dead money. Low velocity. 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 if 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 we all go and we win together.' The world will rebuild itself. I would prefer that it rebuild itself in a peaceful, constructive, cheerful fashion, as opposed to someone's got to lose so I could win. I don't think everybody can win. If we invent electricity and we invent math and we invent fire, isn't it highly likely the entire human race is better off because of math, fire, and electricity? We can all win together. So that's the way I see that.

Because the most... I'd start by saying the human condition is elevated via the channeling of energy. Every great advance was a new form of energy: metallic energy in the form of steel, electrical energy, or chemical energy. And Bitcoin is the next evolution of that. So the first reason is it's compelling and critical to the evolution of the human race. The second observation is every successful investment idea in the 21st century was a digital transformation: digital transformation of music, digital transformation of entertainment, digital transformation of books, digital communications. Bitcoin is the digital transformation of everything else—everything that didn't get transformed in the first 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, move it at the speed of light, program it, and eliminate the friction that is applied to that energy when it takes another form. Economically, energy is capital. We use the phrase 'capital.' If you've got 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. So if I capitalize everything and I stored it in 20th century instruments, I would store it in equity securities and bonds and titles to property. In 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 buy it? Because it's half of everything. It is the platform, the foundation upon which we build the 21st century economy. If you want to fix everything in the world, if I could eliminate the friction, move everything at the speed of light, make it immortal, oscillate it at 60 megahertz or faster, execute a million transactions a second, and make it infinitely intelligent, wouldn't you think that would be a good idea? That's the future of capitalism.

I think that every single month that's gone by, I've just been more impressed with the community ethos. If you look at our press release when we first bought Bitcoin, we said why we bought it. One of the lines we put in the press release was, 'We were persuaded by the community ethos, by the community itself, that this is digital gold and it's harder and it's smarter and it's stronger and it's faster than gold.' And I think that came out of all my research before we actually made that announcement. And the way you figure out the community's passionate is you do your research and you study all the influencers, you look at all the podcasts, you read all the books. And you couldn't come to any conclusion other than the asset is differentiated based on the community ethos. I even tweeted this—I made this point and I guess I elaborated right now. I said, 'The character of the owners determines the destiny of the asset.' The character of the people that own something: if you own Joe Random Dogecoin and you're owning it to flip it on Saturday night depending upon which way a football game goes, that's the destiny of the asset—it's going to be short-term because the people are short-term. Whenever you buy anything, you got to ask yourself the question: what's the character and what's the intent and what's 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, you'll eventually sell it to someone else who swears that New York is the apex city. People that love New York, their opinion is there is no other city on Earth where 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. If you were to say, 'Have you ever considered moving to another city?', they recoil in horror. New York is like the Rome of 100 AD: there's Rome and then there's barbarians. So that's the character of the asset owner. What's the character of people that own Bitcoin? If everybody bought it because they intend to hold it forever, isn't that the kind of asset you want? If I told you people bought it because they liked the monogram, the dog—how many dog coins are there? 48 or something. If you bought the 47th dog coin, then the 49th dog coin is eventually going to demonetize you. So I think that's been very clear from the beginning. Bitcoin had the immaculate conception. I mean, you can't recreate this again. How do you have an open-source asset that was never pre-mined, that was never ICO'd, that no one thought would be that until it became that? So I think my conviction grows with time, but it's pretty evident.

It's going up forever.

Thank you.