Why MicroStrategy Bought $40 Billion Worth of Bitcoin — ft. Michael Saylor

Scott and Ed open the show by discussing the resignation of Intel’s CEO, Trump’s tariff threat to the BRICS nations, and a Delaware judge’s decision to reaffirm her ruling against Elon Musk’s $50 billion pay package. Then Michael Saylor, the founder and executive chairman of MicroStrategy, joins the show to discuss why MicroStrategy went all in on Bitcoin and how the company is securitizing the cryptocurrency. He explains why MicroStrategy pivoted from a business intelligence firm to a Bitcoin treasury company. Finally, he addresses the risk of that strategy, and why he’s confident in Bitcoin’s ability to stay interesting. Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:30Speaker 01

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• 1:00Speaker 02

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior light beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:29Scott Galloway?

  Today's number, $6.2 million. That's how much a crypto entrepreneur paid at a Sotheby's auction for a banana taped to a wall. Ed, what did the banana say to the vibrator?

• 1:41Ed Elson?

  What?

• 1:42Scott Galloway?

  Why are you shaking? She's gonna eat me.

• 1:55Scott Galloway?

  How are you, Ed? It's time for banter.

• 1:57Ed Elson?

  I'm doing pretty well. How are you? Where are you? I have never seen this background for you before.

• 2:02Scott Galloway?

  I'm in the guest room in our rental in Bellsize Park, which is a suburb of London, which we are moving out of back into our real home in Marl-A-Mon.

• 2:11Ed Elson?

  Okay.

• 2:12Scott Galloway?

  Which I'm hoping will lift my mood from a two to a three because I'll be near Marl-A-Mon High Street and I'll get to walk and go to Granger's and go get my coffee and go to Ted's and get cleaned up. But Caroline Shagrin, the producer on our other podcast, said that my rooms looked very, very sad.

• 2:28Ed Elson?

  It does look a bit sad. It's very, it's very plain. Yeah. I feel like you kind of like that aesthetic, though, sort of no, no decorations, sort of muted colors. That's sort of your vibe, right?

• 2:39Scott Galloway?

  Yeah, I like severely depressed Northern European architect. That's the look I'm going for, but.

• 2:44Ed Elson?

  Why are you renting? What's going on? Are you renovating? What's going on?

• 2:47Scott Galloway?

  Because, bitch, you're not making enough money.

• 2:48Ed Elson?

  No, but why are you?

• 2:50Scott Galloway?

  Not enough downloads.

• 2:51Ed Elson?

  Why aren't you at your Malibu place?

• 2:53Scott Galloway?

  We, uh, so bought it about, I think I bought it about two and a half, three years ago, and we've been renovating. By the way, just so you know, renovating, it always comes in under budget and on time. It's just such a really pleasurable experience. Um, and plus, the British economy has just boomed, so I'm sure I'm gonna make it just a shit ton of money. Now, we like buying homes and fixing them up and enjoy furniture and renovations, and it's a good way to make money, mostly in a booming real estate market. You know, you start to believe that it's you and you have some great aesthetic, but anyways, we're moving back and I'm super excited. And it's across the park because everything's about the dogs now. But do you know Marlon Bone? How knowledgeable are you on London?

• 3:34Ed Elson?

  Yeah, I know Malibu.

• 3:35Scott Galloway?

  You like it?

• 3:36Ed Elson?

  I, I, yeah, I like Malibu. It's sort of the, um, it's sort of become the new, the new sexy borough in London, I would say.

• 3:46Scott Galloway?

  Yeah, that's because, uh, El Señor Dogson is, uh, that's because his doghouse is there right now. Yeah, I like it a lot. I didn't, I didn't pick it. Jesus, this is fascinating fucking banter. Get to the headlines. Uh, it's the chemistry. It's the chemistry that makes this pod. That's right. We're like Joe and Mika if they weren't having sex.

• 4:08Ed Elson?

  Yeah, exactly. Let's get to the headlines.

• 4:15Ed Elson?

  Intel CEO Pat Gelsinger resigned after the board expressed doubts about his ability to turn around the company. The stock rose more than 5% when the news broke, but then it ended the day down 0.5%. President-elect Trump has threatened the BRICS nations with 100% tariffs unless they commit to the US dollar as their reserve currency. Trump is demanding they abandon efforts to create an alternative currency and pledge not to back any other currency. The dollar strengthened on that news. And finally, you may remember that back in June, we discussed Tesla's shareholder vote on Elon Musk's $50 billion pay package. Well, here's an update on that story. While

• 4:58Ed Elson?

  the shareholders did vote in favor of the package for the second time, a Delaware judge upheld her decision to strike it down. So Scott, your thoughts, starting with Pat Gelsinger's resignation as CEO of Intel?

• 5:12Scott Galloway?

  CEOs get unfairly compensated up and down, but after four years, after, I think, revenue was down 30%, absolutely deserves to be fired. And this would be an interesting time to maybe looking at taking the company private. Their largest shareholders, Vanguard with 9%, BlackRock at 8%, and State Street at 4.5%. So one of the complaints people have about our economy is it's so concentrated. Here you have essentially a small group of shareholders that kind of controlled the company or can block it. If 21.5% decided to vote together, one way or the other, they kind of control it because the way it works in a takeover or a take private is it's like an election. And that is the shares show

• 5:56Scott Galloway?

  up and they're supposed to have one vote unless it's a two-class voting structure, which I don't think this is. And 20% doesn't show up because it's under some mattress or it's in a custodial relationship and, you know, people just don't show up or fill out the form and vote. So about 80% shows up. So to win, you need 40%. And if you already have 21% of the bag, that means you just need to get about 18.5% of the remaining 60 to win, which means you're probably going to win. So essentially... These three shareholders control any sort of take private with Intel. I'd be curious what kind of premium someone would need to come up with, but I love this as a take private. Mr. Gelsinger is going to be fine.

• 6:38Scott Galloway?

  I'm sure he had some sort of golden parachute or made really good money to rise to the CEO position at Intel, and he's a very talented guy. So he's going to be, he's going to be just fine. This is a great brand, great relationships. I like this company a lot. I'm actually thinking about buying some shares in it. You have any thoughts?

• 6:57Ed Elson?

  Well, he's done a really terrible job just by the numbers and we can go through them here. I mean, last month, Intel reported a $17 billion loss, which is their largest quarterly loss in the company's history. A few months before that, he suspended the dividend for the first time since 1992. He's cut 15% of the workforce or 130,000 employees. And since he's taken over as CEO, Intel has lost three fifths of its value, which is just pretty remarkable. And in that same time, the semiconductor industry as a whole, which Intel is a part of, if we look at the semiconductor index, it has almost doubled. So yeah, it's, it's time.

• 7:40Ed Elson?

  One data point that I found kind of interesting here is that Gelsinger is the 119th American public company CEO to be pushed out of the company this year. And that is an all time record. So 119 CEOs ousted in 2024. That's up 3X from 2017. From the time that this has been recorded, this is the biggest year for CEOs being pushed out. And my question to you is, why do you think that's happening?

• 8:07Scott Galloway?

  A lot of this is simply the fatalities, if you will, of CEOs or CEOs being ousted. It's timing because coming into the pandemic with $7 trillion in stimulus, it was a pretty good time to be a CEO. The stock market went crazy and it's hard to fire a CEO or you don't want to fire a CEO when your stock, their stock is up because everybody's making money. So what you had is this unnatural sugar high and some of the underlying revenues or the underlying businesses couldn't support these unnatural artificial sugar high of stock prices. The stocks have come down. And when shareholders and board members know somebody or an investor in another company that's like booming, they're like, this fucking sucks. And how do people take out their anger? It's pretty simple. They vote them out of

• 8:51Scott Galloway?

  office. So it's not surprising that you're seeing record turnover. I think it's a good thing. I think we need more churn. And I'm especially, I'm especially, and this isn't going to get me on any more boards. I think there needs to be a pretty harsh review of CEOs because CEOs are traditionally the fraternity or the sorority rush chairman. They're usually really likable people and they're usually very smart at becoming friends with the board members. And I purposely don't play golf with them. I don't hang out with them. I'm like, I don't want to be your friend. I want to be objective and sober and be a fiduciary for shareholders. And on a rate, every year, I said, we need to do a review of the CEO. Because these, these guys, and it's almost those guys, make so much fucking money. And they have so much impact on all the other stakeholders that you're really, you're kind

• 9:36Scott Galloway?

  of, you only really have two jobs as a, as a board member. When, if and when to sell the company and if and when in kind of who you hire and fire the CEO. That's kind of really your two things. Now, the chair of the audit committee is there to make sure that nothing funny goes on. But those are really the only two things that the board members should do. And I've always taken myself off of boards after four years because you can't help but be weaponized when you're on a board for longer than four years by the CEO.

• 10:02Ed Elson?

  Let's move on to Trump and this threat, basically, against the BRICS nations that he is going to put in 100% tariff on goods that they import. And just to clarify, what are the BRICS nations? It technically stands for Brazil, Russia, India, China, and South Africa. It now also includes Iran, Egypt, Ethiopia, and the UAE. And it's sort of just, it's a, it's a coalition of, of nations who have talked in the past about potentially creating their own currency because They are so dependent on the US dollar. And I think what Trump is really alluding to is a

• 10:42Ed Elson?

  statement that President Lula of Brazil made last year, where he pitched creating a new reserve currency for all of the BRICS nations, a BRICS currency. And the thing that I think Trump is why I'm a little confused by this, the thing he's not really recognizing is that no one really took that proposal seriously at all. I mean, most of the other BRICS leaders played it down. I mean, Putin obviously would love for a BRICS currency because he hates the fact that the US has this sanction power over Russia. But, you know, most of the leaders were like, no, and the markets barely reacted. So it is a little strange that he's getting very

• 11:23Ed Elson?

  riled up about this issue specifically. But perhaps you'll see you see something else.

• 11:30Scott Galloway?

  What are we? We're only about 5% of the population, but we're what we're almost two thirds, we're 58% of global reserve currency. Now, why is that important? Basically, to transact in dollars, you have to come through a US institution, or you have to come through one of our networks, and we get to track the flows of power. We know where money is going, where it's coming. We can more easily impose sanctions. We can stop dollars from being transferred. So and also, when you're doing business in dollars, you're kind of subject to our decisions around interest rates. The dollar is really important. So he has that right. But it's not as if it's under threat. And I would argue that no one likes to be

• 12:14Scott Galloway?

  threatened. And it's sort of, I have found, generally speaking, when you threaten people, especially powerful people, they're more inclined to do what it is you don't want them to do.

• 12:25Ed Elson?

  Yeah, it's like, don't, don't push this button. I didn't even know that button existed.

• 12:29Scott Galloway?

  Yeah, if you do this, I'm going to do that. It's just sort of like, The dollar is doing really well on its own.

• 12:35Ed Elson?

  Right.

• 12:35Scott Galloway?

  And when you, when you try and tell China the second biggest economy, India, I don't know, whatever it is, the fourth or the fifth, Brazil, I don't know where Brazil is, but together, these, these are a pretty big group. It feels to me, all you're doing is creating a reason for them to like go back to the drawing board and actually create another currency. So I don't, I just don't get this. I think this is a dumb move. I think it's all bluster, unnecessary bluster.

• 13:01Ed Elson?

  To your point, the big inconsistency here, what is, if there is a threat to the dollar, I don't think there really is, but if there is one, is it the BRICS? Is it the euro? Is it the yuan? Probably not. The biggest threat, if there is one, is Bitcoin. You know, that is the currency that has been touted as the new global currency. The whole thing is predicated on issues of rising inflation and spiraling debt and ultimately the potential collapse of the dollar. That's sort of the whole point. I mean, inherent to Bitcoin is an assumption that the dollar cannot hold. And so to protect yourself against that collapse, you buy Bitcoin instead. So the entire premise of Bitcoin is very anti-dollar.

• 13:45Ed Elson?

  And if Trump really cares about this issue of de-dollarization, and to be clear, I think he probably should, then he should really be taking another look at his position on Bitcoin. Because if anything is threatening the dollar right now, or at least trying to threaten the dollar, I think it's that.

• 14:00Scott Galloway?

  I mean, there's some weird things about a fiat currency, and Michael will talk about this. Every fiat currency in history has ultimately failed. Because the short-term political pressure to feed your people and give them back more than you're getting in the short term and print money and, and give into a populist movement and create huge deficits that ultimately become no longer sustainable or result in runaway inflation. And that basically the currency, you get the Weimar Republic and the currency becomes, you know, kind of useless. Every fiat currency has failed. And that's one of the arguments around Bitcoin. They claim that once we get to 21 million coins being mined, we stop. The, the currency trade wars, we're punching well above our weight class. And I don't know.

• 14:43Scott Galloway?

  Do you have any data around whether that 58% number has gone up or down recently?

• 14:47Ed Elson?

  Well, I don't have dates in front of me, but what I can tell you is that 60% is actually, I mean, a lot of people say it's come down. Uh, you know, it used to be around 75% way, way back in sort of like the, the early 1900s. But it's also come up from the eighties. It was around 50% in the eighties. It's now around 60% USD as a percentage of global currency reserves. So my issue with that whole argument is people say, you know, the dollar's losing power. It's no longer the world's reserve currency. It's down from 75%. It's like, well, it's also, it's also up from 50%.

• 15:26Ed Elson?

  Let's move on to Elon and this compensation package that was struck down by Chancellor Kathleen McCormick. We've been discussing this story for a long time now. Uh, I actually made a prediction about this back in June.

• 15:43Ed Elson?

  I think what I can say with certainty is that whether or not it's yes or no, this vote is basically meaningless because here's what will happen if the vote is approved. It'll go back to the Delaware Court of Chancery. It'll go back to Chancellor McCormick, who will open up that briefing. And she's going to be like, hold on, I adjudicated this case before. Actually, I looked at this case basically two months ago. I made my decision very clear. The answer is no. And I feel like what Tesla is forgetting is that if you read her opinion, she actually didn't care whether the shareholders were fully informed or not.

• 16:24Ed Elson?

  Granted, she said they probably weren't, but it had actually no bearing on her actual decision. You know, she believed that the package was inequitable. And that as a court of equity, she also believed that she had the power to rescind it. And that was it. And now here we are again, and we've got the same case on her desk. So nothing's going to change here.

• 16:46Scott Galloway?

  You not only got that right, I think I got it wrong. I think I disagreed with you and you're like, listen, listen, you old sad man. What I don't. I'm mixed on this. I think that I don't think any individual, I'm going to say very Bernie Sanders here. I just don't think any individual should be worth a third of a trillion dollars. I don't see, I don't see how that's healthy. You know, power corrupts and absolute power absolutely corrupts. And I would argue that Musk is a case study in absolute corruption. Having said that, I think the way you solve this is through tax policy, not by limiting compensation. And I do think of the shareholders as the owners of an asset, the company, and the owners of this company get to decide what they pay the managers. And it strikes me that the owners

• 17:29Scott Galloway?

  have decided here to pay the manager a hundred plus billion dollars, which she is claiming, my understanding is now, is she saying there was faulty information in the communications to the shareholders before the vote.

• 17:40Ed Elson?

  I think this is important to clarify here. That was a piece of the case. She said, I don't think that the voters were fully informed on what was happening. But that wasn't the main conclusion. Her main conclusion was that $56 billion just made no sense.

• 17:55Scott Galloway?

  That's unfair.

• 17:55Ed Elson?

  Whether or not the shareholders believed it. And that's the part that I think Tesla just, I think they didn't even read the opinion, because that was my point, that it's not about, they thought, okay, we'll re-vote and we'll prove to you that the shareholders were informed. Her point is, I don't care whether they were informed or not. This just doesn't make sense.

• 18:16Scott Galloway?

  The word I find is a lack of veracity or

• 18:23Scott Galloway?

  usage in a capitalist society

• 18:27Scott Galloway?

  as it relates to compensation is fair. And her, you know, I don't know if this is her argument, but basically, an argument might be, he's not an entrepreneur, he doesn't own 50% of the company, doesn't control it. He's a, he's a, he's management. And there is some, there should be some reasonable kind of fairness or equitability test. But that's for me where I run into trouble. And that is, if the owners of the company have approved this, What's the line in fair? Let me send you, come over, I'm going to give you this compensation of a bunch of CEOs and then come over and we'll smoke cigarettes and eat ice cream and talk about the meaning of the word fair.

• 19:03Ed Elson?

  I mean, just to slightly steel man her argument, or I'll just say her argument, which is that he was pressuring the board and the board was a board of sycophants. And that's definitely true. And ultimately, the board decided to give him a compensation package, the likes of which no one has ever seen before, you know? And, and they said that the reason they're doing it is because they need to properly incentivize him. And her argument was, you don't need to properly incentivize this guy. He was already incented. So it is my opinion as a judge in not a court of law, but a court of equity, as, as my uncle

• 19:45Ed Elson?

  told us on this podcast, it is my job to, to, to discern what is equitable to shareholders. And even if they said, yes, we're okay with this, I do not believe that it is an equitable compensation package. And I think the, the thing that people are struggling with is should the judge of the Delaware Court of Chancery have that power to determine what is fair and what isn't fair?

• 20:13Scott Galloway?

  And there's that word again. And in capitalism, the owner of the asset or the majority of the assets get to nominate directors who get to decide correctly or incorrectly the compensation of the CEO. And the moment someone weighs in and starts using like words like fair or unfair and overrides the decisions of the people voted in by the owners of the company to make these decisions, in my view, you have government overreach. Having said that, a key component of a healthy capitalist society is that we have an equitable, fair taxation system to redistribute capital back into the middle class, which is not a naturally occurring organism. It's the greatest innovation in history, but it requires investment to ensure that there aren't.

• 20:55Scott Galloway?

  You know, the one out of three veterans aren't homeless to ensure the people who do struggle with opiates, single parents, Pell Grants, the Navy, all these wonderful things that we need to pay huge dividends, investing in DARPA and the internet, which all these huge companies have made billions from not acknowledging, or trillions from, that it was middle-class taxpayers that paid for this shit. You need a progressive tax system, and now we no longer do. So what would be my suggestion? This isn't about Elon's compensation of 120 billion. It's about the following. I believe anyone who makes over a billion dollars should pay 60, 70, 80% alternative minimum tax. Because at the end of the day, what do you want? Why do we have all of this shit?

• 21:37Scott Galloway?

  Why do we have capitalism, the tax structure, governance, the Delaware Court? You want to create a society where people feel happy and rewarded and healthy. So I believe the equity and the fairness part comes in around taxation. But if you start using the word "fair" and "compensation," come over and I'm going to tell you about the CEOs I deal with and you tell me what is fair or not fair. It just, that's an impossible fucking argument.

• 22:01Ed Elson?

  Just a prediction has come to me. I feel like this brings up very, very big questions about our legal system and how our legal system should work. I think what we're going to see now is, I mean, one, we're going to see an appeal. I think we'll maybe see some pretty serious lawsuits. I would bet this makes its way up to the Supreme Court, and I would bet that we see a Supreme Court decision or a Supreme Court lawsuit with SCOTUS making a decision on these sort of questions. But this is one of those situations where you can begin to make a pretty decent argument that the way our system is set up gives government a little too much power.

• 22:43Scott Galloway?

  Yeah, but the mechanism here is, I don't think, it's not like the traditional court system. This is-

• 22:49Ed Elson?

  But then they'll take, then they'll take it to the traditional court system. If they don't, I mean, he's going to get the money. He will find a way.

• 22:56Scott Galloway?

  You think eventually, okay, I think that's a good bet.

• 22:58Ed Elson?

  He has to.

• 22:59Scott Galloway?

  But just the mechanism here is I believe they can appeal it once to the Delaware Supreme Court. I don't think this specific case won't end up in the Supreme Court. He would have to, I guess, sue the Delaware Court?

• 23:12Ed Elson?

  Yes, he'll file a new suit.

• 23:15Ed Elson?

  I think that is what will happen. He'll file a legal suit, not with the Court of Equity, but the Court of Law. And I would bet that this makes its way up to the Supreme Court.

• 23:26Scott Galloway?

  Also, I think the way around this, actually, Ed, is I don't, I think the board could figure out a way. Shareholders have said, we're down with 100-plus billion-dollar compensation. I think the board can figure out a way to compensate him differently that will avoid the Delaware Court. I think there's a rational argument, and I don't know if you've picked up on this, but I'm not a huge fan of Elon Musk, but there's a rational argument that if you went to Tim Cook right now and said, okay, we're at 3 trillion. If you can grow Apple to 20 trillion, we'll give you a trillion dollars. I think the shareholders of Apple would say, oh, that's fucking insane, a trillion dollars, but sure, take that deal. If you can, if you can increase our stock price six or sevenfold, we'll give you a trillion dollars.

• 24:10Scott Galloway?

  And that's kind of what Musk and the board said to shareholders. I just feel it's alien to be supporting more money for Elon Musk, but I don't think, I think they got it wrong here. I think boards are allowed to make stupid decisions as long as they're approved by the shareholders, which they largely have been here. And I agree with you, I think ultimately he ends up getting his money.

• 24:31Ed Elson?

  We'll be right back after the break for our conversation with Michael Saylor. If you're enjoying the show so far, hit follow and leave us a review on Prof G Markets.

• 25:19Speaker 01

  Energía baja, falta de concentración, nebla mental. You might be dehydrated. Gatorade Zero Powders han sido diseñados científicamente para ayudarte a mejorar el balance de hidratación en el cuerpo. Hechos con la mezcla número uno de electrolitos, sin colores ni sabores artificiales. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Signos de dehidratación leve y moderada. Consulta a tu médico si los síndomas persisten.

• 25:49Speaker 02

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior light beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 26:24Ed Elson?

  Welcome back. Here's our conversation with Michael Saylor, the founder and executive chairman of MicroStrategy. Michael, thank you so much for joining us on Prof G Markets.

• 26:34Speaker 05

  Yeah, happy to be here.

• 26:37Ed Elson?

  You've been everywhere recently. I mean, you're all over my news feed. And I just want to give sort of the Michael Saylor story in 2024 very quickly. So you're the founder and chairman of MicroStrategy, which was originally a business intelligence firm, but over the past few years you've shifted it into this Bitcoin treasury company. So MicroStrategy now earns nearly $40 billion worth of Bitcoin. That's roughly 2% of the total global Bitcoin supply. And it also makes MicroStrategy the largest corporate holder of Bitcoin in the world. And in the past year, as Bitcoin's price has risen, so too has MicroStrategy.

• 27:18Ed Elson?

  So MicroStrategy stock is up 600% over the past year. It's just remarkable. So I'll start with this and we'll get into it. But what has drawn you to Bitcoin, Michael? And what was sort of the impetus for this very radical pivot at MicroStrategy towards Bitcoin?

• 27:38Speaker 05

  I think in the middle of 2000, in the summer of 2000, what drew us to Bitcoin was desperation and frustration. So initially, we had 500 million in cash. It was worthless, like it was generating 0% interest. The company wasn't growing. We were under lockdowns competing against Microsoft. So, you know, the only thing that we had in our world that was a bright spot was we had 500 million in cash and we thought maybe it was worth something. But when Jerome Powell said it's worthless for the next four years, we lost that, you know. So we had to do something. Our initial, you know, foray into Bitcoin was defensive. It was just frustration defense. It's either that or sell the company.

• 28:22Speaker 05

  So if you're not going to sell the company, you can die slowly, you can die quickly, or you can do a transformational acquisition. You can take a risk. And that was our transformational acquisition. What if you could buy a $500 million company growing 60% a year, which looks like its own digital monopoly? And you could bolt it on to a company that's growing not, you know, 0 to 5% a year, that's not a monopoly. So we did that. Then Bitcoin surged and we could opportunistically raise money via the convertible bond market. And we raised 650 million at 75 basis points. And then we raised a billion paying 0% coupon. And that point, I would say that stage is opportunistic.

• 29:07Speaker 05

  Like someone wants to give you billions of dollars of free money to actually invest in your business. Why wouldn't you? We got on the roller coaster and went up and down. It surged, it crashed, it surged, it crashed. And I think by the beginning of 2024, it became strategic. And we realized like, hey, we're just doing this because we've got an operating company and we can do it. And between 2021 and 2024, we raised about $10 billion of capital. So we started with 500 million, we raised another nine and a half to 10 billion more. And now, and now the question is, well, what's going to happen with crypto and what's going to happen with Bitcoin?

• 29:51Speaker 05

  You got the ETFs approved in January. I mean, 2024 is like year zero of institutional adoption. So the ETFs are approved in January, everybody wrote us off and said, well, MicroStrategy is unnecessary now. What they didn't realize is the ETFs are like overnight deposits. Like you put money into BlackRock, but you can take it out of BlackRock the next day. MicroStrategy, that 40 billion, that's our money. That's permanent. You're not, you can't take it out. We have 40 billion of permanent capital. And so what we realized is our real great strategic, our strategic franchise here is we can securitize Bitcoin.

• 30:32Speaker 05

  So I can issue fixed income instruments, bonds, especially bonds and fixed income preferred stocks or, or high volatility equity. And those are all products the capital market wants. They want Bitcoin-backed securities. They either want three X to trade, or they want one third of the risk and one third of the volatility to hold in a portfolio. So we, we announced October 30th, that we were going to basically raise 21 billion of equity and debt. And that was well received by our shareholders. We just kind of said, we're gonna, we're going to be the leader in the industry. If you want to invest in a company like ours, we're the company.

• 31:16Speaker 05

  And then a week later, we just had a red sweep and November 5th was, was pro crypto Congress, pro crypto Senate, pro crypto White House. Bitcoin surged, our stock surged. And in, and I guess I boil it down to, it took us four years to get 10 billion. But by the way, it took me 30 years to get 500 million. It took me four years to get the next 10 billion. It took us four weeks to raise 13 billion more. And that's because the product you're selling is capital. I mean, you're selling a security. If a rich person looks at the iPhone, how many do you want? One. You want one Tesla, one iPhone.

• 31:57Speaker 05

  But if I offer you a security that gives you twice the performance of the S and P, how many of them do you want? Like all until you hit your risk rail. So now I would say we're Bitcoin Treasury Company, right? Our operation is we take crude crypto capital Bitcoin that's a commodity. And then we sell you an equity, which is like 2X Bitcoin. And then we get to 2X by actually selling bonds and selling fixed income instruments that are half X or half of what we're doing. And we strip the performance and the risk off the bottom of the capital structure.

• 32:37Speaker 05

  We put it on to the top and that way all the degenerate traders get what they want. And all of the risk adverse investors get what they want. Right? And we're just the institutional gateway sitting in the middle.

• 32:52Ed Elson?

  It sounds like the way that you're describing this stock now. I mean, MicroStrategy was a software company. The way you have described it, it sounds like MicroStrategy is a financial product. And the way that you describe that you are securitizing Bitcoin, which I would assume you see as maybe a commodity. But it sounds like the business that MicroStrategy is in now is it is selling a financial product.

• 33:20Speaker 05

  We're a Treasury Company. Like we're not a retail bank. We don't have retail deposits. What we do is we issue securities. We borrow billions of dollars from the bond market at 0% interest. And we lend it to the crypto economy at 60% interest. You see, I bought, I raised money, I raised billions by issuing equity to the equity capital markets and I invest it in Bitcoin. And the difference, the difference between them is a spread. You know, if I issue a billion dollars of equity, I'm capturing a 65% spread.

• 34:04Speaker 05

  We make $650 million on the arbitrage in one day, in one day. And then when I do the bond market, it's an 80% spread. So what we're doing is we're taking cheap capital from the traditional capital markets, of which there's 300 trillion of it, right? There's a lot of money in the capital markets. We're funneling that capital into the crypto economy, into the decentralized economy. It's like I'm lending it to the nation of Bitcoin, but there's no counterparty, right? Because there's no company, there's no individual, but I'm getting back 60% return each year. And so as long as I can borrow the money for less, if you can borrow money for less than

• 34:46Speaker 05

  the S and P return, and if you can loan it out for more than the S and P return, you can rinse and repeat that trade ad infinitum, because there's infinite money that's getting less than the S and P that wants more.

• 34:57Ed Elson?

  A lot of that is predicated on the fact that you are borrowing money at 0% interest, which is very unusual. Could you take us through for our listeners how that is possible?

• 35:10Speaker 05

  Okay, here's the big idea. The S and P volatility is the VIX. It's about 15. The return of the S and P for the past four years is about 15% annually. So think of the, the cost of capital for every traditional investor is 15, 15, 15 vol, 15 ARR. Bitcoin is 60 ARR, 60 vol, four times the VIX, four times the S and P. It's been that way. For a decade. It's been that way for the past four years. Okay, if you're a convertible arbitrator, there's an entire convertible bond market.

• 35:51Speaker 05

  What they do is they buy your bond and they sell your equity and they extract the premium. For that, there's a $340 billion market that does that. For that trade to work, they need your vol to be 45 or more. So you need to be three or four X the S and P. And of course, MicroStrategy's got a vol of 100 to 150. And that's because we lever Bitcoin, which is a vol of 60. So if I take 60 and I double it, I'm 120. So we have extremely high volatility. What else do you need? Liquidity. What else do you need? Durability, right? Game stops, interesting, but it's not durable.

• 36:32Speaker 05

  You see, sometimes there are meme stocks that are very liquid and volatile, but only for a week. What if I could, volatility is like fire. I'm starting a fire, I'm burning the fire for a long time. So. The way we borrow money for zero is we're selling a convertible bond and, and the imputed interest rate of the bond, of course, is not zero. The arbitrators are getting 20, 30, 40% risk-free yield. They're betting nothing and getting. I mean, they might buy a $50 million bond, make $10 million in a few minutes, risk-free. Why wouldn't you? Like, so we're tapping that market because we're, we have a volatile, liquid stock that's transparent.

• 37:14Speaker 05

  But, and it doesn't require vol, it doesn't require a zero coupon for this to work. We borrowed money at 6%. If you borrow money at 6% and invest it at 60%, you're still scraping 90% of the game. I'm still making 54% yield on whatever I borrowed. So it works at 6%, it works at 12%, it works at 15%. It just happens that a very easy pool of capital is convertible bond capital where you can borrow the money at zero and you can do it in size. Can I make one more point, which our, our bonds are the most. Are the most lucrative bonds sold in the last decade, right? I mean, the bonds all doubled and tripled.

• 37:57Speaker 05

  No one ever triples their money on a bond normally. But the other point is, if a conventional company borrows a billion dollars in the convertible bond market, and they go and buy a bill, and they build a building, or they invest in a product, or they fund an operation. It's a five-year investment cycle. And it's, and it's not clear how it will turn out. So after five years of developing a billion dollars of Chicago real estate, you go back to the capital market, borrow another billion, and you got to do it in San Francisco. Another five years goes by. But what we're doing is building a digital building. I borrow a billion dollars, I buy Bitcoin, I announce it two days later. It's immediately profitable because I'm generating a yield to my common stock shareholders.

• 38:41Speaker 05

  So imagine I could borrow a billion, build a digital building in five days, announce that I made money on it, and borrow another billion. I can do that every week. And that's exactly what's happening in this market. We're basically accelerating the investment cycle from, from five years to one week.

• 39:03Speaker 05

  Bitcoin is the unique radical actor here, because Bitcoin is the first product that's a commodity. That's a legal definition, an asset without an issuer. And it's economically a scarcity. That is a common sense definition. It's a commodity that you could only make 21 million of for the next billion years. So there is no legal commodity that's also a scarcity other than Bitcoin. And if you don't have a commodity that's a scarcity, you can't do this with 100% of your capital in a public company. Yeah, well, you can't do this with a security. Like, I couldn't do this trade with Nvidia stock. Even though it's a great company, Nvidia's stock is a security.

• 39:46Speaker 05

  So I could never own 100% of my liquid capital or have it invested in Nvidia. So if you wanted to do this before Bitcoin, you had to do it with gold, soybeans, oil, or real estate. And they all underperform the S and P, and they all have less vol than the S and P. So if your hurdle rate is 1515, and you're showing me real estate, which is 1010. The trade doesn't work. And so what we're doing is totally rational and simple. It's the simplest thing imaginable. If you accept the premise that Bitcoin is a real asset, that it is a commodity, and then it's 21 million, right?

• 40:28Speaker 05

  And once you, once you get that idea, everything else follows naturally. And until you get that idea, you just think it's crazy magic.

• 40:38Scott Galloway?

  So, Michael, it's always good to see you. And I should point out, the first time we had you on the pod, you off mic said, Scott, just put some of your assets in this, trust me on this. And I think Bitcoin was like at 8,000 bucks. And I'm like, I'm gonna wait till it goes down to 4,000. So if, if I understand this correctly, it's sort of this incredibly deft capital markets arbitrage, where you're able to issue zero coupon bonds, where no, no cash flow leaves your balance sheet. You don't have to pay interest on this. So you get to borrow money, not for free, but cash flow free. No cash flow comes off your balance sheet. And because of Bitcoin's acceleration and the vol you talked about,

• 41:19Scott Galloway?

  you're able to issue to convert the price that the, the bonds convert at, at a fairly high price. So you've essentially are engaging in this kind of arbitrage, where people think your company has the credibility in the space. You have the ability to borrow against this. But there has to be underlying cash flows to support the claim that those bondholders might have should Bitcoin go decline substantially in price. So is that security built on just a pure belief in Bitcoin? Or are the underlying cash flows from your core business important to that?

• 41:56Speaker 05

  The performance of the underlying asset is such that the bonds never get paid back, other than they just get, they get equitized. And if you look at my situation right now, I have about $40 billion of Bitcoin. I have about $7 billion of bonds. 4.2 of them are already equity. I mean, they're already effectively equity because they're trading not just above the strike price, they're trading above the call price, which is 130% of the strike price. So we could, you know, generally sometime in the future, just call them all for equity and equitize them all. So there's about $3 billion of a convertible bond on a $40 billion structure, which is

• 42:37Speaker 05

  zero coupon, which there's some theoretical risk that there might be more dilutive than than the minimum strike. But the other point to make is these are no recourse unsecured notes. There's no lien, there's no claim, there's no EBITDA covenants. I think we pay like 30, 30 million, 30 to 35 million in interest on 7 billion in debt, Scott, a year. But I don't even have to generate the cash flow for the 30 million. I could actually sell equity in order to pay the 30 million and we have, we have raised 10.5, we've been generating a billion dollars of equity a week. I mean, a billion dollars of income and equity a week.

• 43:21Speaker 05

  So the real magic of this is you need an asset which is going to outperform the S and P, that's also going to stay more volatile than the S and P. And then you need a company, a public company that's 100% Bitcoin. And when you sell securities backed by Bitcoin, you need to buy the Bitcoin with it. And, and because you're actually feeding back the capital back into the system, it's like a triple amplifier because it's driving up your assets, it's driving up your volatility, and it's driving up the price of Bitcoin.

• 43:58Scott Galloway?

  My understanding is there's no such thing as risk free return. And I'm just trying to paint out a doomsday or a downside scenario here. Bitcoin, as you referenced, is highly volatile. A year ago was 70% lower than it is now. Five years ago was 90 or 95% lower. Volatility means it goes way up, it goes way down. Bitcoin goes to $5,000 and the underlying value of your Bitcoin holdings no longer represents the claim or the assets it once did.

• 44:30Scott Galloway?

  Your stock goes way down. It is way below the strike. You have to issue massive amounts of dilutive share price. The stock crashes and you're not able to issue more debt. Isn't that the downside scenario? There may be more upside here, but there is a, there is a doomsday, right?

• 44:49Speaker 05

  Well, the best way to say it is the risk that you're accepting is Bitcoin extinction risk.

• 44:55Speaker 05

  Like if Bitcoin goes to zero tomorrow, the entire business is a Bitcoin extinction risk. So if you think there's a X percent chance of Bitcoin extinction, then probably you don't put 100% of your portfolio into my stock or into my bond, right?

• 45:13Scott Galloway?

  But what if it's 10,000? What if it goes to 10,000? What happens?

• 45:16Speaker 05

  Yeah.

• 45:16Scott Galloway?

  So I'm sure your bankers have modeled this out.

• 45:18Speaker 05

  The answer is Bitcoin goes to 10,000. The bonds are going to pay off at par. You know, you might not get three extra money on the bonds, but you're going to get your money back because the company has enough assets and enough equity that will just equitize the bonds and it'll be dilutive to the common stock.

• 45:37Scott Galloway?

  Just press pause there. The business intelligence side of the business creates enough cash flow to support the bonds, even if Bitcoin declines dramatically.

• 45:45Speaker 05

  No, the point is you don't need cash. The bonds are free. I mean, you don't need cash flow to pay the interest. If you're talking about the principal, the principal of the bonds converts to equity. Right? You're basically paying out equity. So the risk, the risk, if you assume Bitcoin goes down 90% is to the equity. It's the MSTR, right? They're the ones that are taking the risk. The bonds are going to pay off. And, and so, look Scott, the point is if you've got, if you put 100% of all your wealth into our bonds or, you know, or, or into our equity and a Bitcoin goes to zero, then you will lose money.

• 46:27Scott Galloway?

  And you're not suggesting anyone does that?

• 46:28Speaker 05

  Yeah. And then if, if you ask the question, well, how does MicroStrategy look at it? My answer is.

• 46:36Speaker 05

  I'm selling the volatility. So for example, if if I sell a billion dollar bond, I'm capturing an 80% spread upfront. So I'm making 800 million dollars in Bitcoin. If Bitcoin crashes by 80%, then I I was neutral, right? So if Bitcoin went to 20,000 tomorrow, you could say, ha, you know, you didn't make any money on that. But if Bitcoin doesn't crash 80%, I made 800 million. Now, if Bitcoin goes down 20 or 30 or 40%, Bitcoin's volatile. My stock is twice as volatile. I'm going to refinance it and sell the volatility and the theoretical value of having a billion dollars of volatile asset

• 47:21Speaker 05

  is like 100 million a year. Like, like, for example, all I have to do is hold the billion dollars and then sell the vol and we probably make another 500 million to a billion dollars, even if Bitcoin doesn't go up, even if it goes down. So, right? So so it's it's a no brainer for us as a corporation because we're getting the float and we're getting the volatility. And then we can equitize or refinance the volatility between now and when it comes due. If you want me to say, what's the doomsday scenario? Well, it's it's it's the same scenario you have, Scott, which is if you walk out your door and you get hit by a truck or a meteor, you're dead.

• 48:04Speaker 05

  So it is possible you could get hit by a meteorite and then you're dead. And it is possible for an extinction level event to happen, a Bitcoin, a meteor. And if it does, everything is definitely levered to that. But if it happens, it needs to happen quickly, immediately. Like, for example, if Bitcoin, if Bitcoin goes to zero tomorrow forever.

• 48:30Speaker 05

  Incontrovertibly, right? That's not good for our business. But if Bitcoin simply trades down and stays volatile, if Bitcoin was cut in half and stayed as volatile, well, there's a lot of people that will want to buy micro strategy stock and micro strategy bonds and they'll want to buy. If Bitcoin was 50,000, there would be a massive demand for people, for a convertible bond struck at 50,000, for people to ride the upside and avoid the downside of that, and we would sell that one, you see? So, our business kind of works, no matter what happens, as long as Bitcoin continues to be interesting, volatile, etc.

• 49:09Ed Elson?

  Stay with us.

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• 51:00Ed Elson?

  We're back with Profty Markets. I just want to rewind to something you said earlier. You said, you know, it's great for us if the price of Bitcoin goes up. But the thing that more importantly you said is that this all hinges on Bitcoin remaining interesting. The idea that people are interested by this asset and want to be exposed to it in some way. And I think that is the statement that I understand your position on. But I don't, I'm not fully bought in because I think that that statement is quite a speculative statement.

• 51:41Ed Elson?

  To say, you know, with the level of conviction that you have, that this asset will remain interesting. And then to build this giant trade off of that premise. And I think that that's what some people would have, would take issue with is like, well, why is this thing going to remain interesting? You know, what, we can talk about the volatility. We can talk about the financial dynamics and the technicals of Bitcoin. But why do I care about Bitcoin? What's, what's actually interesting about it, other than the price going up?

• 52:14Speaker 05

  It's a good question. But I actually think that if you want to spend a few hours or studying it or researching it, you'll find that it is the most interesting thing in the world. I mean, I don't even think it's, I don't even think it's debatable. I don't think there is a second most interesting thing. The most interesting financial asset, the most interesting asset in the world, by far.

• 52:37Ed Elson?

  So why is it so interesting to you personally? From a personal level, when you learned about Bitcoin and started studying.

• 52:42Speaker 05

  Wasn't the more important question, why is it interesting to everybody else on the earth? Right? There's 650 million crypto people. It's the center of the, of 650 million crypto people. There's 1500 crypto exchanges you can trade it on. Any company on earth can trade with any other company with Bitcoin. It's the, on Saturday afternoon, if you wanted a billion dollars of credit.

• 53:08Speaker 05

  It's the only place to get a billion dollars of credit. If you wanted to, if you wanted to panic sell or take a billion dollars short position because of an Israeli missile crisis, it's the only thing you can sell a billion dollars of. And on Sunday morning, if you want to reverse the trade, it's the only way to reverse the trade, right? Nvidia is not trading on Saturday. I mean, think about the, by the way, Bitcoin is the seventh biggest asset in the world by market cap. It's two trillion. But think about the ones above it. Microsoft, Apple, right? Nvidia? These are, these are not, these are not useful or interesting to most of the world.

• 53:50Speaker 05

  No Chinese company is going to capitalize on Nvidia's stock. Gold's at the top. You can't move 10 billion dollars of gold from New York to Tokyo or short it or go long. So literally what I do is turn it around to you and say, if you don't think it's the most interesting, tell me what asset in the world is more interesting right now to more people, because I don't think you can name one.

• 54:14Ed Elson?

  Well, I, I think, I, I think it's interesting because of all of the conversations that it sparked and the way that it's become very political and it's, it, it really brings out the emotions of, of everyone involved, either positive or negative. But the things that you mentioned there about why it's interesting, like, again, a lot of it has to do, I mean, you mentioned the fact that it trades on weekends, which, which other assets don't, but the idea that it is-

• 54:41Speaker 05

  Ed, Ed, come on. First of all, the number one performing stock in the S and P 500, mine.

• 54:47Ed Elson?

  Yeah.

• 54:48Speaker 05

  We're up 30x. That's three times more than Nvidia. That's interesting. How about the number one options market in the S and P 500? Mine. We have the most intense options, like 130% of market cap. The most profitable convertible bond, the number one convertible bonds in the marketplace, Micro Strategies, right? It's interesting because people are making money off of it. Everybody in the, two trillion dollars of- Market cap or of wealth has been created in forty eight months for hundreds of millions of people. It's changing every minute of the day.

• 55:27Ed Elson?

  But in that sense, isn't what's interesting that the price is going up? Because you said, you know, it's nice when the price goes up. But what I'm also hearing is the interesting part is the price going up. The fact that it has become such a valuable asset class. And I guess my point would be if there comes a time when the the price starts going down, suddenly it's not so interesting anymore. And then I I feel that it could all all of that fire that you described can sort of poof a lot more quickly.

• 55:57Speaker 05

  By the way, it was pretty interesting when it went down, too. It's it's I I give you the crypto winner. It's it's interesting because it's useful. It's useful because it's the hardest money in the history of the human race. Right? It's interesting and useful because it represents property rights and monetary security or economic security for eight billion people. That's it's interesting in the same way that electricity and clean water and steel and airplanes and fire and nuclear power are interesting because it's the single biggest way to improve your your

• 56:39Speaker 05

  quality of life, right? And otherwise, it's interesting because it is a global, real time. It's it's changing all the time, every second. It's literally changing. Now, think about think about all the other financial assets. Conventional wisdom says I create diversified portfolios of bundles of twentieth century things like one hundred and eighty seven real estate apartments or a bundle of preferred stocks or a bundle of corporate bonds. They have no volatility because they're engineered literally to be uninteresting. They're literally engineered so that on Saturday afternoon,

• 57:23Speaker 05

  there is nothing that could happen that would change their value to you. So you see that the the fact that Bitcoin is engineered so that it it does change value, someone is doing something. That's actually what creates all the volatility. The vol but but let me make one more point. Do you know the call rate? If you if you hold a dollar or hold a million dollars and you're wanting to hold it for 30 days, you're getting sofer, the 30 day sofer, are you getting about 4.8% interest? If you actually hold a million dollars of the S and P index and you sell the call 30 days out at the market, you're getting like 15% interest.

• 58:08Speaker 05

  If you're holding a million dollars of Bitcoin, IBIT, and you sell the 30 day call, you're getting 100% interest. And when you're holding a million of MicroStrategy and you sell the call, you're getting 220% interest. So when I say interesting, I'm using the classic sense, people are financially invested in it, and therefore, when it changes, there's hundreds of millions of people that all of a sudden feel it up or down. I'm also pointing out, you can literally generate more interest on this thing, and so, and there are more ways to actually make money on it.

• 58:50Speaker 05

  And that's why the tickers on CNBC, CNBC is not showing you things that aren't interesting. They're not showing you the soybean price every day. They're not showing you, they're not going to show you the price of a diversified portfolio of real estate assets that are that are maturely and scientifically constructed, because the construction of the portfolio was to make it boring. And Bitcoin is, and by, when you make it boring, you strip the performance out of it. And so the point is, let's come back to fire. Volatility is fire. If you're a normie, you run away from fire.

• 59:31Speaker 05

  If you're Henry Ford, you put the fire into an engine, you put it in a horseless carriage, and you create an automobile, and now people can go. And then you put it into a plane and a train.

• 59:42Speaker 02

  That's good.

• 59:43Speaker 05

  So engineers are putting volatile, you know, you're a nuclear reactor in the spaceship. It's scary, in the submarine. But Bitcoin is, is like the financial fuel. These things are crypto reactors. It's a technically better way to do this, and it's the volatility that's actually the motor that's driving the portfolio or the treasury forward.

• 1:00:12Scott Galloway?

  If you were advising administration, as far as I know you are, there's a tension between, so Trump's threatening the BRIC Nation, saying, if you de-dollarize and the dollar's no longer the default currency, I'm going to raise tariffs because there's an advantage to being the reserve currency. We control 58% of reserves are in the dollar. We get to see flows, we get to have more teeth in our sanctions. And if Bitcoin goes to a million dollars, 21 trillion dollar asset class, it's hard for me to see how it wouldn't at least bring reserve currency percentage from the dollar way down. How would you be advising the government to think about the advantages of dollar as reserve currency versus Bitcoin increasing in value and subsequently

• 1:00:56Scott Galloway?

  playing a larger role and perhaps replacing the dollar as a reserve currency?

• 1:01:01Speaker 05

  There's some simple, straightforward things that are good for the United States and probably good for the world, too. First of all, just to observe that money decomposes into currency and capital. Currency is the medium of exchange that we use to price everything in the world. The US dollar is definitely the reserve currency. The US dollar is also used as reserve capital, but in the form of treasury bills. Bitcoin is capital, Bitcoin is not currency. Gold has been used as capital, it's not currency anymore. The very simple thing that the US ought to do is they ought to sell the gold and buy Bitcoin with it and buy 20% of the Bitcoin network.

• 1:01:46Speaker 05

  It's very simple, just swap the gold for Bitcoin. If anybody actually swaps out their treasury bills for Bitcoin, then the US is going to own it all. It's kind of like just getting Alaska or the Louisiana Purchase for free. They could, they could pretty much have 20% of the network for free overnight, just with a swap. They could even print the money, you know? I mean, they, they could buy it for next to nothing. The only alternative to the treasury bill for anybody is Bitcoin. And so just buy, do that, and Bitcoin becomes the world reserve capital network, and the US will own both sides of the equation. They'll own the currency and the capital. But the second observation is...

• 1:02:30Speaker 05

  The US ought to just standardize stablecoin legislation and let people issue digital currency backed by US treasuries like Tether, like Circle. If the United States created a digital assets framework and they just let corporations and banks issue digital currency, and you just say, "If you want to issue digital currency, you have to back it with US dollar equivalents," which means T-bills, right? And a US custodian. If they did that, the digital currency market would grow from 150 billion to 10 trillion, and that would create $10 trillion worth of demand for US Treasury assets.

• 1:03:15Speaker 05

  What will happen is we'll collapse every other currency in the world, Scott. We'll collapse the ruble, the CNY, everything in South America, everything in Africa, even the euro. 99% of the demand for stablecoin in Europe is the dollar, not the euro. So if the US really wants to make sure that the dollar remains the reserve currency, the real crippling defect right now is it's not easy to send digital dollars at the speed of light on a mobile phone, and people want to do it. So they ought to actually normalize that. And if they want to make sure that the United States owns the capital of the world, they

• 1:03:58Speaker 05

  just ought to buy 20% or 30% of Bitcoin. They'll have it all. And then when the Chinese and the Russians dump all their real estate and all their gold, and if they dump their Treasury bills or whatever they dump, they'll buy Bitcoin. The price of Bitcoin will go through the roof. The US will make $80 trillion.

• 1:04:16Scott Galloway?

  So just as we wrap up here, Michael, I want to pivot to something a little bit more existential or personal. I've known you for the better part of 20 years. We're about the exact same age. What's left for you? You're obviously economically secure. You've obviously built a company that's performed, as you said, best performing stock in the S&P.

• 1:04:38Scott Galloway?

  In five years or 10 years from now, you look back and think, okay, that's a box I wanted to check that I hadn't checked. What's left for you? What are you hoping to accomplish over the next decade?

• 1:04:47Speaker 05

  Well, you know, Scott, in 2020, I was very frustrated and a bit depressed. I don't think I was alone. A lot of people were frustrated and depressed during that time period. And I was, you know, my company was worth $600 million enterprise value, and I'd worked 30 years, and I could not break through against the Microsoft, you know, juggernaut. And I couldn't figure out how to grow it. And after 10 years of trying, I figured, maybe I should just retire and go gracefully off and just, and call it a day. And I think, as I said, I discovered Bitcoin out of frustration and desperation. And first, it was just something

• 1:05:32Speaker 05

  to do. And then I realized it was a good technology. I went from, I'll buy it because I don't have a choice to do anything else, to, I'm an investor. And I started thinking, Bitcoin is like Facebook for money, or it's like, it's like a dominant digital monetary network. And I started becoming a tech believer in it. But then I emerged as a maximalist, Scott, which is, you know, you wrote your book about the four. And at the end of the book, you know, you basically are a little bit jaded. You're like, these guys got too much power, and they abuse their power, and the world's not a better place for that. That's because they're companies. And if Bitcoin was a company, if it was a big digital

• 1:06:12Speaker 05

  banking network, it probably also gets corrupted. What I realized is Bitcoin is a decentralized protocol. It's a commodity. It's ethically superior to a company. It's ethically superior to these big tech companies, because it represents a protocol of economic empowerment for 8 billion people and everybody on earth, regardless of your views. And so I basically went from opportunist to investor to maximalist. And now I'm of the opinion that

• 1:06:46Speaker 05

  The human race moves forward through clean energy, clean food, clean money. And, and human misery was our water was dirty, our food was dirty, we didn't have energy. We, we had dirty clothes, we had doctors with dirty hands and dirty instruments and the like. And we had dirty money. And for the last 500,000 years, all of our economics have been broken and their human misery has taken place because copper tokens and giant stone coins and glass beads and silver coins and gold, none of these things were perfect capital assets.

• 1:07:27Speaker 05

  They were never, they were never a settlement network and, and they were never a non-deflationary asset. Bitcoin represents clean money. It represents economic energy and economic empowerment. So my mission at this point is I would just like to spread it to 8 billion people. I actually think you could, Bitcoin is hope. I think you can fix a company, fix a country, fix a family. It, it won't solve the other problems. It doesn't cure cancer and it doesn't make you a good basketball player and it doesn't, it doesn't, uh, you know, resolve political differences and religious differences. I'm not, I, I get that.

• 1:08:09Speaker 05

  What it does is it gives people a working economic fluid that doesn't drain 10% of their economic energy per year out, you know, out the back door. And so I'm a big advocate for, uh, digital capital in the same way that 150 years ago, maybe I could get really excited about spreading electricity to the world. But I'm, you know, if you found fire, you would want people to know about fire. And, you know, Henry Ford, as I said, he, he put, he put the fire in an engine and he gave us wings. He let us fly. And, and so the world's a better place with the automobile or the plane or aluminum or

• 1:08:51Speaker 05

  steel or computers or AI or whatever it is. I just think the world's a better place with digital capital or, or clean store of value money. You could say it, it's a, um, a fair and equitable way for us to settle our differences.

• 1:09:12Speaker 05

  And there's something nice about that.

• 1:09:15Scott Galloway?

  Michael Saylor is the founder and executive chairman of MicroStrategy, a publicly traded business intelligence firm and holder of Bitcoin. He's also the founder of Alarm.com, named investor on 48-plus patents and author of the book The Mobile Way. He founded the Saylor Academy, a nonprofit that has provided free education to more than 2 million students. He holds dual degrees from MIT in aerospace engineering and history of science. I've known you for 20 years, Michael. One of the things I think this space has unfortunately suffered from is a lack of, like, I don't know, thoughtful, nice people. And whether people disagree with you or not on this specific asset class, I've known you for 20 years, you've never not been willing to meet with me, provide me advice. People don't

• 1:09:58Scott Galloway?

  know this about you. You are a nice, generous person, and that's good for the asset class because I think it's lacked that. Really appreciate your time and congrats on all your success.

• 1:10:08Speaker 05

  Thanks, Michael. Yeah, thanks for having me. Always a delight to talk.

• 1:10:22Scott Galloway?

  So Ed, what do you think?

• 1:10:24Ed Elson?

  What do you think?

• 1:10:28Ed Elson?

  I think you got worried a little bit that we were getting a bit too combative at the end there.

• 1:10:34Scott Galloway?

  No? Maybe, just because I appreciate, I appreciate you wanting to keep it real and the pushback. I have a bias towards Michael because I know him personally and I like him. He's like, he's a generally a good, decent man. And the thing I like about what he's bringing to this conversation, you know, he's definitely a cheerleader. There's definitely a lot of rah rah there. But at the same time, he will also say, he's not going to tell anyone to put all their money in this. He doesn't tell them to do that. He tells them to be a little bit more measured.

• 1:11:03Ed Elson?

  He's told people to mortgage their houses and use the money to buy Bitcoin.

• 1:11:07Scott Galloway?

  Oh, there's that.

• 1:11:10Ed Elson?

  I like him for a lot of reasons. To me, that's not one of them.

• 1:11:16Scott Galloway?

  Well, let me, let me go to the optimistic tone then.

• 1:11:20Scott Galloway?

  If you compare him against the other figures in, in this asset class, one, he's not in jail. And two, he doesn't go on Twitter and start insulting and attacking people who don't support his narrative. And early in my business career, not early, early in my reinvention of my business career, I would go down to his place and I would outline my business and he would like, like a fucking AI before AI go, these are the three problems with your business. This is what you should focus on. Do you want to have lunch now? You know, he just, he would summarize my business in about 30 seconds and tell me what I should be doing.

• 1:11:56Ed Elson?

  Like, I, I, I really enjoyed that conversation with him and I do respect him. I don't think that he gave me a great answer to the value of Bitcoin and what makes it interesting beyond the fact that the price goes up.

• 1:12:11Scott Galloway?

  I share a lot of your skepticism about the asset class. It's always made me, quite frankly, it's just always made me uncomfortable. I've never been able to wrap my head around it. I think there's a lot of negative externalities to a currency that doesn't, I mean, there's positive externalities about no government oversight or a lot about not being able to track its flows and bad actors that might be able to transact. I mean, I guess.

• 1:12:34Ed Elson?

  Yeah. If the US lost its ability to do that, we'd be so fucked in so many ways we can imagine.

• 1:12:41Scott Galloway?

  So I'm like you. I share, I share some of that skepticism. The reason, the reason I really respect Michael is that if the institutional market had said, this guy's fucking crazy and fled the stock and the stock crashed and he'd been fired, he would have gone down as like this cautionary CEO tale, right? That what happens when your CEO loses their shit, literally? And 499, I think of the S and P 500 CEOs, maybe 498, if you include Musk, would take that kind of risk reputationally.

• 1:13:15Scott Galloway?

  And he took it.

• 1:13:16Ed Elson?

  Yeah, he certainly has balls of steel and he certainly, as you mentioned, he loves risk and he loves volatility. I mean, we spent the first 20 minutes talking about how the most volatile asset class in the world is Bitcoin and that's what makes it so great.

• 1:13:33Scott Galloway?

  Hits fire. You can either run from it or put it in a car. That was good. That was good. I'm gonna use that.

• 1:13:39Ed Elson?

  It's great.

• 1:13:41Scott Galloway?

  That was good.

• 1:13:41Ed Elson?

  I just, I can see, you know, he's a maverick and he's addicted to that. And he, as you said, he said he was depressed and didn't know what to do when his company was stuck at a valuation of $600 million.

• 1:13:59Scott Galloway?

  Stuck, stuck at 600 million.

• 1:14:02Ed Elson?

  What do I do now? I have to do something.

• 1:14:04Scott Galloway?

  And here I am in this sad, here I am in this sad room where it gets dark at 4:30 talking to you. But he was stuck.

• 1:14:10Ed Elson?

  That's right. So he ran into the entire eternal fire that is Bitcoin. Do you have any ending advice for us, Scott? After all that?

• 1:14:19Scott Galloway?

  I'm a big believer in diversification and, and I, you know, I can see this going to a million. I can also see this going to a thousand. I think it's probably more likely it goes to a million than a thousand, but it's definitely a legitimate asset class now. I would just say, if you're under the age of 30, don't put more than, in my view, 20 or 25% of your, you know, net worth in any one asset. And if you're over the age of, you know, 40 or 45, don't put more than 10%. And a lot of people who are very wealthy will tell me that that's being lame and that, you know, Bill Ackman says that, you know, diversification is a lack of conviction. My attitude is get rich slowly.

• 1:15:03Scott Galloway?

  And when you get there, it's going to be very rewarding and along the way, it's fun and it has less heartburn and anxiety.

• 1:15:10Ed Elson?

  This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss, Mia Silverio is our research lead, Jessica Lang is our research associate, Drew Burris is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. If you liked what you heard, give us a follow and join us for a fresh take on markets on Monday.