EXCLUSIVE: Michael Saylor Masterclass On Bitcoin

What happens is the US dollar replaces all the weak currencies and it grows in strength. 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, analog dollars and the 20th-century banking system is the reserve currency of the world, but it's an awful, inefficient system. Yeah! 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 someone to a friend of yours in Paris on a Tuesday? I dare you. The point 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, whatever rails, any other crypto. Interesting question, but what we can't debate, which is 100% certain, is that everybody wants to be able to move money at the speed of light and program it on a computer chip on a Saturday afternoon. Sometimes we get in this confrontational state where people think it's Bitcoin versus the Fed, or Bitcoin versus the dollar. It's not. We can all win. It's a win-win. It's in the best interest of the dollar to move at the speed of light and be programmable. And there are a hundred million businesses that want to do business in the dollar. And I am the controlling shareholder of MicroStrategy. I founded the company. 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 use satoshis and pay everybody in satoshis, 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. 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, the value is to get Bitcoin onto the balance sheet as a store of value, protect shareholder value that's sitting there, and continue to operate your businesses. And my understanding of what MicroStrategy is doing is you have articulated and highlighted two separate strategies: we have a software business that we're going to continue to try to grow, drive cash flow, and serve our customers from a business intelligence standpoint; and then we have a treasury strategy, which is we're going to use Bitcoin to protect our purchasing power and our assets that are actually sitting on the balance sheet. Those two strategies combined make up the business. And obviously, the market has found it incredibly attractive given what the stock price has done over the last year or so.

If you're Apple Computer, you've got two strategies you can pursue to get in the digital economy. One strategy is you just buy $50 billion of Bitcoin, and three people can do it. If the three people did it, then your stock becomes a Bitcoin derivative. Apple stock becomes a Bitcoin derivative, and if Bitcoin moves up 100% a year, you're generating $50 billion a year of shareholder value. Three people, $50 billion shareholder value. 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. 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. Both of those are rational. What's not rational is to require that all your customers pay you in Bitcoin and stop taking dollars. You can control what you do with your balance sheet, and you can control what your strategy is, but implementing it on your customers or rewiring all your backend accounting systems is unnecessary. It's not the right way. Coming back to my view of the world, I think we want to find the path of least resistance to fix everything. 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. It becomes a derivative of Bitcoin. So I'm not against bonds. I'm not the guy saying we shouldn't have bonds. We should have bonds. If the junk bond index is 4% and you can issue a Bitcoin-backed bond at 6%, it's good for the people that have trillions of dollars locked up in bonds. It's good for Bitcoin. It's good for everybody in the middle. We can 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. 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 it and you buy Bitcoin. 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. People worry that I have seven or eight billion dollars of Bitcoin. I don't have any more power than anybody else. 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. Don't mess it up. So I think I'm not threatened if a government buys Bitcoin. It wouldn't be bad for Bitcoin. 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 that it's money of the people, money for the people. The combination of the fact that it's permissionless and 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. Bitcoin mining is like the first line of defense of your immune system. It's what makes you healthy. The Bitcoin mining industry is a $22 billion a year industry right now. That means the protocol is creating a $22 billion subsidy for Bitcoin entrepreneurs to go out into the world and find supportive political jurisdictions—$22 billion per year. When you think about that, the miners themselves have to raise capital, but you see the Bitcoin miners are ripping today in the market. All their stocks are up. They've been very successful. You can take a Bitcoin miner public. You're not going to take a proof-of-stake validator public. 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. I think what you're seeing here is lots of jurisdictions can see the benefit of Bitcoin either as sound money. All the holders are a political constituency. I guess we're going to get close to the point where we're going to flip 50% of the electorate. There's going to be a Bitcoiner in Congress, there already are. There are going to be Bitcoiners in the Senate, there already are. Eventually, a Bitcoiner will be president. 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. 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 right now. Name another brand that's worth $1.2 trillion. It's the greatest brand in the world, 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, owning land was maybe the most popular, and Bitcoin is that digital property. How do I buy all these other things in Africa or Asia or anywhere? It's a very egalitarian asset, and that makes it politically advantageous. What politician would say, 'I don't want you to own your own house, and I don't want you to have economic freedom?' The left and the right can both agree on that. 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. Anybody on earth in any jurisdiction can create their own franchise of the bank. Every crypto exchange in every country on earth, when they're selling you Bitcoin or exchanging Bitcoin, they're creating a franchise bank of Bitcoin where they're marketing it. Bitcoin is spreading through two incredibly powerful franchises: the Bitcoin exchangers, who are the Bitcoin banks, and it's open and permissionless, so you don't have to get a license from the FDIC to have a bank in Egypt that deals in Bitcoin. And it's spreading through the Bitcoin miners, the security providers. The security network operators and the bankers are spreading like wildfire everywhere. Examples: Square Cash App is a Bitcoin bank, PayPal is a Bitcoin bank, Coinbase is a Bitcoin bank, Binance is a Bitcoin bank. When you look at Marathon and Riot and all these Bitcoin miners, they're the other side of the network. I think 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. It was a benefit to the United States when China banned Bitcoin. China cracking down on Bitcoin mining was a gift handed to the West. I've said it before, I think it's worth a trillion dollars. You can see it in the hash rate statistics. At some point, Bitcoin mining is the most lucrative use of energy in the world. That's hands down, very provable and verifiable. It's the best use of intermittent energy and the best use of sustainable energy. When you look at it that way, you think, shouldn't we expect an avalanche more of political support? The answer is yes. And why is it stable? It's stable because the Bitcoin miners and the Bitcoin holders are going to go wherever the politicians support them, and they're going to bring their capital and pay taxes, large sums of taxes. The right way to think about Bitcoin is that Bitcoin is creating an opportunity: an opportunity for your family to save money for a hundred years, an opportunity to fix your company. MicroStrategy stock is hitting $800. It's an opportunity for your shareholders, for your taxpayers, for your constituents. It's an opportunity in the media business. Nobody wants to talk about anything but Bitcoin. Everyone wants to talk about Bitcoin. It's an opportunity for Twitter, for every mobile app. What I think people don't recognize, and you and I have talked about this before, is that it's the only thing from a strategic standpoint that if you're an individual, you can plug in your personal balance sheet. You can start to run your own node, use this technology. If you're a corporation or a financial institution, you can plug your business into the network in a multitude of ways: build services that facilitate other people to use it, or mine to support the network, or simply buy the asset and hold it on your balance sheet. It's also true of nation states, foundations, endowments, pension funds. When you plug into the network, you're hiring tens of millions, if not hundreds of millions, of people around the world that are all now working aligned with you to further your business. I talk all the time about whether you're a restaurant—we've seen examples of many restaurants who have done this—all the way up to large pension funds or nation states. All of a sudden, the cyber hornets online begin to rally around you, push you forward, say, 'Hey, we will support you because you are like-minded, you are also helping us move this forward.' But you also get the support of every single miner in the world. They'll say, 'We will protect your economic wealth for you.' And you get the Lightning network, which will help people route these transactions. It's a very unique thing where you're essentially hiring so many people and so much economic value, but all you do is just plug in. You don't have to go meet these people. You don't even know who they are. It's an excellent political strategy, an excellent marketing strategy, an excellent shareholder relations strategy, an excellent business strategy. I guess there are two thoughts I have here. One: properly understood, I believe Bitcoin is digital energy. It is pure energy. It's not digital gold—that's put a billion dollars of money in a vault and let it sit there for a decade, and you can't do anything with it. It's not even digital property—digital property is a billion dollars of a digital hotel that I can teleport 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 into room minutes, recompose this pure energy hotel, 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, you see it hasn't eliminated capitalism; it's simply the $500 trillion digital energy basis of capitalism. It makes sense that you would use it as the foundation to build your family, your company, your country, your city, your application, your device. You can put it into everything. Once you've done that, 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 are a lot of rich families that have a lot of messed-up problems. You can put it on the balance sheet of your company. If I have seven or eight billion dollars on my balance sheet, that doesn't mean I don't have to get up and go to work, make the software work, 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. The same is true with your city. It's half the solution. The other half of the solution is you need rational policies at the municipal, state, and government levels. When you think about it like that, you realize that it makes sense, and it's going to grow. What was the second part of your question again?

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 you're benefiting from the rest of the network. You can't afford to lose laser-like focus on your family, company, or country. 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. It doesn't solve that problem. I think we boil down to a simple idea: 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 want to be a good husband, you can't have six wives. You want to be a good retailer, you better know who your customer is. You still compete against every retailer. Your operating business, you've 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, energizing the network. 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. Practically speaking, the Romans were good at killing people. It's not easy to kill people. 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 or a thousand meters away, and a navy. You see that over and over again. Steel trumps iron, iron trumps bronze, bronze trumps stone. If you pick up a sharp rock, you beat the other guy. If you had iron, you beat the guys with bronze. If you had steel, you beat the guys with iron. You ever seen steel forged? People don't think about this. Walk into a steel mill. What do you think is going on? They're channeling immense energy—fire, heat, electric rolled steel—massive energy into metallic form. Air power is potential energy. You get up 50,000 feet, you drop someone on someone's head. Remember the Gulf War, when Norman Schwarzkopf showed videos of laser-guided bombs? Something in the clouds dropped a bomb that managed to hit a three-by-three space from 50,000 feet up, through the wind. The channeling of energy through time and space—being better at channeling—explains why every team wins in sports. That's why Tom Brady wins. 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. If you can do that, you can win. 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. 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. Until you figure it out... If I said to you, 'What is digital energy?' Digital energy is I'm going to put $100 billion into this container, 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. 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, not information. These are not nearly as good. It's a thousand times better than the thing it's replacing. A lot of people 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 controlled the seas. Or how about nuclear power? What could nuclear power do for you? You think you weren't channeling energy? You're channeling energy. 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. There are examples of people that shoot their own foot off in the history of war and civilization. But ultimately, what history is telling us is that the team that is most coordinated, that channels energy, always wins. Bitcoin is a good bet just because it's digital energy. 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 asset in your cloud and you become a $10 trillion bank. Whether they do it or they don't do it, the world is full of examples of empires toppling 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. 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 100 hours studying it. I think the world is full of people that haven't spent 10 hours studying it. Yet if I walked up to you in 1900 and said, 'I got electricity. I want you to put it in your building, into your carriage, into your ship. You manufacture food—I want you to use electricity instead of steam power or mechanical power.' How many people would stop and study it? 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.

I think the only thing you've got to do is figure out how much of it you can buy. 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 $10 billion? Can you borrow $10 million to buy Bitcoin? I wouldn't buy it at 20x leverage, or 10x leverage, or even 5x leverage, because you look at the volatility and ask, 'What's the likelihood that it will trade down 50% and I'll get a margin call and get forced 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 bought $500 million 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. I think the way to think of it is: here's my model for Bitcoin. Bitcoin's price is going up because of inflation. Say 14% per year. We know that in the absence of everything else, if you had complete adoption, if eight billion people had Bitcoin and the US 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. The second dynamic is adoption. If there's a $100 billion 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. If you went from 1% adoption to 2% adoption, you could imagine the price could double just because adoption doubled, even with no inflation. Then the third driver is utility. This is common sense: ever send Bitcoin to anybody else on the main chain when you want to send $37 and it takes you an hour with a fee? Then Cash App came out and said you could just send it by a hashtag. Or you get Lightning—I've 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 money at the speed of light on Layer 2 or Layer 3, and if I can do a billion transactions a day. Or take El Salvador: three million people download a wallet and they start doing remittances. Is there demand for Bitcoin? Sure there is. As technical utility increases—and by the way, technical utility drives and feeds back into adoption—there are 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. If you look at a world going from 100 million people with low utility (buy it, hold it for 100 years, low velocity), 100 million adoption, 200 million, and I move it every year, 400 million, 800 million, 1.6 billion—as user count increases, that drives things. But adoption isn't just user count. If you're building a model, you would say, 'How much money?' People talk about Metcalfe's law. If you're looking at it in a cursory way, you say Metcalfe's law applies. But if you're thinking a bit deeper, you think Newton's law is a pie. Astrophysics applies. If you bring $100 billion to the network and you're one person, that's more important than if you brought a dollar and you're one person. You have to do a dollar-weighted assessment of adoption. 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, what's the utility of the money? 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, lending it out for yield is another, putting a lien on it, locking it up for five years, creating a trust that's good for the rest of your life and the life of your firstborn child for the next thousand years funded with two Bitcoin, and you can't ever sell the Bitcoin but you can live off the yield for the next thousand years—it's an application. I can create insurance policies, 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. As that happens, as you get more money flowing on the network, more people, more utility, the price goes up. Does it go up forever? Why? Because as I said, it's the language of money. What does that mean? It's like English. How long has that been around? A long time. It's like base-10 math. People don't get this part. Bitcoin is math, but it's a type of math. The Bitcoin protocol is a protocol for money. 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, base-32 math, base-2 math, 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. That's the part that people don't get. When I say it's going up forever, I'm saying: will the technology get better? Obviously. Will adoption increase? 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. 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, get enlightened, and just use satoshis. You get perfect Austrian economics, hard money, perfect thing. Maybe it doesn't matter to me if we do or we don't. But let's say we did. 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. Until then, you're going to have faster than productivity growth because you're going to get these rips, these accelerations from technology, adoption, and fiat inflation in the frame of reference. It's useful to see the frame of reference. Is your frame of reference the peso, the bolivar, the US dollar? 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 Shib 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. All personal money falls into those three categories: it's either an investment, a speculation, or an endowment or savings account. For a business, that's different. Some businesses are traders. If you're a trader, if you think you can out-trade someone else, you're a business. You better be thinking about it 60 hours a week. You better have proprietary computers, proprietary models, know the markets and the arbitrages, then you could trade. Citadel trades, Renaissance trades, Goldman Sachs trades. So they can be traders. Then also, businesses have other options. Maybe they can raise capital, issue equity, issue debt. They're publicly traded. I have an army of lawyers and accountants so I can do that. You don't as a family. Businesses have different financing capabilities than people. 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 a 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. Also, businesses have shareholders to manage and shareholder relations. There's that phrase: 'If we want to go far, we need to go together.' So for a business, it's very important to have 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 its capital aligned. So a lot of times, they'll do things that are either optimized for their shareholders or optimized for their other constituencies. Businesses have regulatory nexus. There are certain things I can't do if I'm a bank in China or a bank in the US. Businesses have compliance issues, and individuals don't. So that's how you think about that.

This will be our recruiting. Bitcoin's a monetary union.

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. If I can control it, I'm going to do it. Short-term volatility, you can't control, so you just wait. You've got to figure that in seven years the market will sort itself out. In seven months, it likely will sort itself out. 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. You're driving yourself to apoplectic fits by inducing this anxiety. The way I look at volatility is actually the truth: it's a benefit. 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 that it's hard. I like the fact that it's scary. I like the fact that 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. I'm taking you on a bumpy ride down the road. I'm going to bounce you this way and that way. In five years, there's a pot of gold at the end, and there are only two seats, and there are 10 people. Only two of you get on. So the two of you are like, 'Oh, there's a pot of gold at the end. Part of Bitcoin at the end.' You're like, 'Okay, well, we'll sign up for the bumpy ride. What else have we got to do?' And everybody else is fat, dumb, and happy. 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 the desert, 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, then every company is going to borrow hundreds of billions and trillions of dollars against their Bitcoin. Every bank is 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. The joke, of course, is it's volatility, but it keeps going up. People say, 'Well, how else do you want it to go up?' It's going up with volatility. So I think it's a benefit because volatility pays off everybody that does the research and has any conviction. 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 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 US dollar on top of digital asset as BTC. 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. If you had $100 and $99 are invested in Bitcoin and $1 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 $100,000 in USD, a stablecoin, and then you pay your bills in the USD while the Bitcoin appreciates. 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 is 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. We didn't use stablecoins at MicroStrategy for anything. We don't use stablecoins to buy Bitcoin. What you want is for eight billion people to use a stablecoin to buy coffee, and you also want Amazon, General Electric, and Apple to remit cross-border treasuries in stablecoin. 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 borders at the speed of light for free. Would we move USD by a stablecoin? Yeah. Would we move Bitcoin? Well, we might flash it into Bitcoin for a second, move it, and flash it back into USD. 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 would also love—everybody knows that now. Everybody knows they want dollars in their wallet. So the US dollar could spread to six billion people, to eight billion people. The Chinese didn't block it. It'll spread to all eight billion people. They don't all know they want to hold their life savings in Bitcoin, but that's growing at a massive rate. It's spreading like a virus. Every government knows they want to control their currency. The strong governments will: the US will, the Chinese will, the EU will. The weak governments won't: Afghanistan, Venezuela, Zimbabwe, places with hyperinflation, 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 Bitcoin, and to be able to move either of them at the speed of light in a programmatic fashion. I think they both win. Who loses? There's too much of the 'dollar must lose so Bitcoin can win.' No. Who loses? 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, big tech stocks—they're all weaker assets. There's $500 trillion of them. If you got the $10 trillion from gold, we'd be up by a factor of 10. So weak assets flow to the strong asset. Weak currencies—how many currencies in the world are weaker than the dollar? Name one fiat currency stronger than the dollar. None. They're all weaker. The CNY is weaker. Every African currency, every Asian currency. So 180 nominal currencies, a lot are pegged to the dollar, 130 floating currencies. They all can be replaced with the dollar. 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. Declare war on gold. They don't have an army, they don't have an air force. There are no politicians running for office of president of gold. No city, state, country. No one is crying thinking that their way of life will come to an end if gold gets 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 my part. You have all the stats; it's been demonetized for the past decade. It doesn't have a country, an army, doesn't collect taxes. Not a single person on earth is going to lie down in front of a tank to defend the nation of gold. And yet gold is the enemy because gold is a dumb rock sitting there. You can't mortgage your gold, you can't lever up your gold, it's hard to rent or license or develop further. Gold is not big tech. You can't put gold on an iPhone. So ultimately, there are two things that should succeed and grow: the US dollar—if you live in the United States and you believe in Western values, freedom, justice, Western law, and the progressive movement, you want the US dollar to grow. Instead of saying the dollar is a problem, 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. We all win. The world's a better place. Every company, everybody wins. If you're going to compete with Square Cash App, 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, topple a government, crush a currency, stop a regulator, or eliminate PayPal. You don't have to compete with all of them. You can buy Bitcoin. If 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. After you're finished declaring war on the rock, declare war on dead property, dead money. 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. If you start thinking that way, you think, 'I just want to take my monetary energy, put it into digital energy, and then 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. 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 can win. If we invent electricity, math, and fire, isn't it highly likely the entire human race is better off? I think we can all win together. So that's the way I see that.

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, chemical energy. Bitcoin is the next evolution of that. So the first reason is it's compelling and critical to the events of the human race. The second observation is every successful investment idea in the 21st century was a digital transformation: digital transformation of music, entertainment, books, communications. Bitcoin is the digital transformation of everything else—everything that didn't get transformed in the first chapter of the mobile wave. So now we have the digital transformation of gold, of property, of energy. For the first time in history, 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. If I capitalize everything and store it in 20th century instruments, I would store it in equity securities, bonds, 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's 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 and we said why we bought it, one of the lines we put in the press release was 'persuaded by the community ethos, by the community itself, that this is digital gold and it's harder, smarter, stronger, and faster than gold.' I think that came out of all my research before we actually made that announcement. The way you figure out the community is passionate is you do your research, 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 that the asset is differentiated based on the community ethos. I even tweeted this point: the character of the owners determines the destiny of the asset. If you own Joe Random Yo-Yo Coin and you're owning it to flip it on Saturday night depending on which way a football game goes, the destiny of the asset is short-term because the people are short-term. Whenever you buy anything, you've got to ask yourself, 'What's the character, what's the intent, what's the strategy or belief system of the people that are buying the thing 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 who 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 say, 'Have you ever considered moving to another city?' they recoil in horror. 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, there are 48 dog coins. If you bought the 47th dog coin, the 49th is eventually going to demonetize you. Bitcoin had the immaculate conception. You can't recreate this. How do you have an open-sourced asset that was never pre-mined, never ICO'd, that no one thought would be that until it became that? My conviction grows with time. It's pretty evident.

It's going up forever.

Thank you.