Michael Saylor Fires Back After Strategy Sold Bitcoin

If I said, I'm going to punch you in the face, would you rather have the company buy $200,000 of Bitcoin a year and sell 10,000 of Bitcoin a year, or buy no Bitcoin a year, sell no Bitcoin a year? They're not Bitcoin maximalists. They're really just Twitter trolls that are in the business of posting viral content. If you want to grow Bitcoin, what you want to do is attract $10 trillion from the credit markets and then buy Bitcoin with it. The people all around the world want a bank account that pays them 8% in francs. Yeah. What are they getting now? Nothing.

I've been in the community in the business about six years. There have been five brutal drawdowns about once every year. There's a drawdown, some worse than others, but it's not uncommon. So I don't get disillusioned by the fact that it's volatile and we have pullbacks. It's really to be expected. What's exciting this year is you see Bitcoin has never been stronger. The Bitcoin identity as the world's digital capital network, the dominant digital monetary network of the world. I think that's clear. Bitcoin dominance has been growing. If you look at Bitcoin's capital or market cap compared to the market cap of all crypto assets, not including stablecoins, it probably fell to 40% in 2021, and it has been marching up toward about 68 to 70% over five years. So Bitcoin itself is alive and healthy. It's never been more embraced. Accounting treatments, tax treatments, banking support, institutional support is greater than ever. So that's the first thing that's exciting. The second thing that's exciting is the formation of the digital credit market. Digital credit was nonexistent 12 months ago, and it has gone from nothing to more than $11 billion as an asset class. So something that's growing $1 billion a month or more is an interesting thing. And so one of the killer apps of Bitcoin is digital credit in the form of STRK and SATA digital credits. Probably it's the most liquid preferred stocks in the world. Our STRK has become the biggest preferred stock in the world. It's not even a year old, and they're trading more intensely than any other preferred stock in the world. So this has completely revitalized the preferred stock asset class. And we've created a new asset class for digital credit. There's 25,000 dividend bearing stocks. There's one that pays dividends twice a month. There's one that pays dividends every day. So these are very innovative products in the history of the capital markets. And they're bringing billions of dollars of capital into the Bitcoin ecosystem. So that's number two. Very interesting. And then number three, when we solve the problem of digital credit, we cracked the code on digital money or stablecoins backed by Bitcoin that pay yield. And so what you see right now is innovators are starting to work on yield coins in the crypto economy. The two most famous are Saturn and Apex. And Saturn has created maybe the first Bitcoin backed stablecoin. Now a lot of people dreamed about this, but no one could go directly from raw Bitcoin to a token pegged to the dollar. You can't strip a 40 vol asset to a zero vol asset in one step. What we found is that if we take two steps, if we actually go from 40 vol to 5 vol, which is sort of where digital credit is, you can go from five vol to zero vol. What does that mean? That means the market is open to create digital money products that have zero volatility pegged to the euro, the dollar, the yen, the Swiss franc, the great British pound that pay you 8% yield, maybe tax deferred 8% yield. So, you know, does the crypto market want a stablecoin that pays 8% yield? By the way, people all around the world want a bank account that pays them 8% in francs. Yeah. What are they getting now? Nothing. Nothing. Do people want 8%? They want bank accounts in Japan to pay 8% in yen, or 8% in euros in Germany, or 8% in London in pounds, or 8% in dollars in New York. Yeah. What are they getting right now? The money markets pay three and a half, after tax, 2%. So these things are anywhere from 2 to 4 times better. So, you know, what am I excited about? I'm excited about the creation of digital money that can be used as a medium of exchange, a store of value, a unit of account. But it's not the Austrian economist definition of money. They would say Bitcoin is money or gold is money, but it's the conventional tradfi, Keynesian definition of money, which is the dollars in your bank account with stable NAV and zero volatility to a fiat currency. The yield, that's a money market. So there's $300 trillion of credit. There's 30, 40, $50 trillion in these money markets. They're all getting almost nothing. We can pay two, three, four X as much. And so what do I see? I see Bitcoin as the digital transformation of capital. I see STRK is the digital transformation of credit. And I see these yield coins or other types of funds, like companies like Saturn are working on, is the digital transformation of money markets or digital money. And that's a multi-trillion dollar opportunity. And so it couldn't be clearer to me that this is going to be revolutionary for the banking business, the money management business, for equity investors, for credit markets, for capital markets in general. And ultimately, if you want to grow Bitcoin, what you want to do is attract $10 trillion from the credit markets and then buy Bitcoin with it. And the way that you're going to do that is with digital credit and digital money type instruments.

No, I actually think Bitcoin is one. I think that Bitcoin is one economically, technically, ethically, and is being globally embraced. The only thing that's frustrating to me maybe is that it's not always perceived by mainstream tradfi investors. They don't understand it yet. Mainstream media doesn't understand it. And then there's just a lot of dysfunctional squabbling back and forth on X or Twitter between various crypto and Bitcoin believers arguing over what I think are second and third order issues. And I think that we would be better off in the community if we just focused upon growing the industry by a factor of 100 because generally all of the arguments in the Bitcoin community are between people that 99% agree with each other that pick the last 1%, and then they fight over some third order issue that really won't matter to either of them in a decade.

Yeah, I think that's an example of what happens when you've won. The reason we're talking about quantum computers is because there's nothing else that threatens Bitcoin. Okay? So everything that people talked about, well there's political risk. The government will ban it or no one will want to buy it or companies won't ever use it, or the accounting is wrong or the tax is bad, or maybe it'll fail, or maybe it's misengineered, or the block sizes are too small, the block sizes are too big or it doesn't have enough smart contract functionality, right. The amount of FUD is off the hook. And every one of those, oh, it uses too much energy. It uses computers. The Chinese will take over it. The Chinese make too much of it. The Chinese banned it. They don't make enough of it. Right. There's like 20 types of FUD. They all kind of fail. So after there's nothing to worry about, we invented an imaginary problem to worry about. Imagine a computer that no one's ever built that it's not obvious we can build. Let's imagine that perhaps we make a scientific breakthrough and we manage to create a quantum computer. And let's imagine that it cracks our current cryptography. And let's imagine that no one reacts or addresses it, or upgrades. Then let's imagine bad things happening. It's a hypothetical problem that people imagine so that they can generate engagement on X. The only reason it gets traction is A. There are no real problems, and B we're in a bear market. And so normally the Bitcoin community, the crypto community at large, it's like hundreds of millions of people all on the same team. And the price is like the scoreboard. And when the price is high, everybody's happy. And the price is low, it's like all the blood sugars crash and it's like they lost yesterday and everybody's in a bad mood. And so in the middle of a bear market, people are in a bad mood. They want to fight about something.

I think that it's tricky. The summer is difficult because it's the AI summer where you've got $500 billion of capital getting sucked into AI deals from Anthropic, OpenAI, SpaceX, Google, etc. And so that's creating a temporary market location. I think that when we get past those deals and we come out the back end, I think we'll see a nice rotation of capital back into Bitcoin. It will recover, and I would think we'll recover by the end of the year. Right now we're just kind of in the middle of an unpleasant drawdown. New highs by the end of this year? I think we could. I think we should definitely see a recovery by the end of the year. I don't know if we'll get the new high within six months, but I would think over the next 12 months we'll make a new high.