MicroStrategy's Michael Saylor: Bitcoin To $13M? MicroStrategy's $4B Bitcoin Bet | PBD Podcast | Ep. 508

Patrick Bet-David is joined by MicroStrategy's Michael Saylor. Michael Saylor is a prominent American entrepreneur and executive known for his role as the co-founder and executive chairman of MicroStrategy, a publicly traded business intelligence company. Saylor gained widespread recognition in the cryptocurrency world for his company's significant investments in Bitcoin. As of November 10, 2024, MicroStrategy holds approximately 279,420 bitcoins, acquired at a total cost of around $11.9 billion, averaging $42,692 per bitcoin. With Bitcoin's price recently surpassing $90,000, the market value of these holdings exceeds $25 billion. 💻 PBD'S "NO MATTER WHAT" WEBINAR: https://bit.ly/4hVTkPK 🎄 PURCHASE THE VT CHRISTMAS COLLECTION: ⁠⁠⁠⁠https://bit.ly/4hDCt3S⁠⁠⁠ https://bit.ly/4hDCt3S?utm_source=youtube&utm_medium=product_shelf 📰 VTNEWS. AI: ⁠⁠⁠⁠https://bit.ly/3Zn2Moj⁠⁠⁠ https://bit.ly/3Zn2Moj 👕 VT POLO SHIRTS: ⁠⁠⁠https://bit.ly/3Y4Npig⁠⁠⁠ https://bit.ly/3Y4Npig?utm_source=youtube&utm_medium=product_shelf 🎙️ FOLLOW THE PODCAST ON SPOTIFY: ⁠⁠⁠https://bit.ly/3ze3RUM⁠⁠⁠ https://bit.ly/3ze3RUM 🎙️ FOLLOW THE PODCAST ON ITUNES: ⁠⁠⁠https://bit.ly/47iOGGx⁠⁠⁠ https://bit.ly/47iOGGx 🎙️ FOLLOW THE PODCAST ON ALL PLATFORMS: ⁠⁠⁠https://bit.ly/4e0FgCe⁠⁠⁠ https://bit.ly/4e0FgCe 📱 CONNECT ON MINNECT: ⁠⁠⁠https://bit.ly/3MGK5EE⁠⁠⁠ https://bit.ly/3MGK5EE 👔 BET-DAVID CONSULTING: ⁠⁠⁠https://bit.ly/4d5nYlU⁠⁠⁠ https://bit.ly/4d5nYlU 🎓 VALUETAINMENT UNIVERSITY: ⁠⁠⁠https://bit.ly/3XC8L7k⁠⁠⁠ https://bit.ly/3XC8L7k 📺 JOIN THE CHANNEL: ⁠⁠⁠⁠https://bit.ly/3XjSSRK⁠⁠⁠ https://bit.ly/3XjSSRK 💬 TEXT US: Text “PODCAST” to 310-340-1132 to get the latest updates in real-time! SUBSCRIBE TO:⁠⁠⁠‪@VALUETAINMENT‬⁠⁠⁠ https://www.youtube.com/@VALUETAINMENT ⁠⁠⁠‪@vtsoscast‬⁠⁠⁠ https://www.youtube.com/@vtsoscast ⁠⁠⁠‪@ValuetainmentComedy‬⁠⁠⁠ https://www.youtube.com/@ValuetainmentComedy ⁠⁠⁠‪@bizdocpodcast‬⁠⁠⁠ https://www.youtube.com/@bizdocpodcast ⁠⁠⁠‪@theunusualsuspectspodcast‬⁠⁠⁠ https://www.youtube.com/@theunusualsuspectspodcast ABOUT US:Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.

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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• 0:31Speaker 01

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• 1:25Patrick Bet-David?

  All right, folks. So I got a question for you. I got a question for you. What's the biggest purchase you made today? I'm curious. What did you buy today? Did you buy, maybe we went to lunch? You bought something at Chipotle? Maybe you bought a car today, right? Maybe you bought a house today? My guest today bought $4.6 billion of Bitcoin today. Okay, and that's Michael Saylor with MicroStrategy. Now, here's a kicker before we get into it. We've had him on, I think this is the fourth time, Michael, you've been on. Let's go to the first time we had him on, Rob, with the picture of how many signatures was on the wall? We barely had any signatures on the wall, right? This is Michael coming on the first time. We're talking about Bitcoin. Every time he leaves, you know, everybody here would buy Bitcoin or two. It's like, man, I gotta buy something here.

• 2:08Patrick Bet-David?

  First time on, you came was May, March 1st of 2022. At the time, the valuation of MicroStrategy's stock was $41 a share. Then you came back December 5th of 2022. That's nine months later. The stock value dropped 50% from $41 to 2069. Then you came back on May 9th of 2023. The stock went up a little bit to $28. The stock today is valued at, if you can pull it up, Rob, $370, give or take, as of right now. And I think the last M net worth was around a billion dollars or so.

• 2:51Patrick Bet-David?

  Today net worth, just in these last months I talked about, folks, went from that billion, billion and a half to roughly $9 billion. Michael, it's great to have you back on the podcast.

• 2:59Speaker 03

  Thanks for having me.

• 3:00Patrick Bet-David?

  I'm counting your money. I hope you don't mind it. I'm counting the money that I got here.

• 3:04Speaker 03

  I like the trend. If I just keep coming back, the stock will keep going up.

• 3:08Patrick Bet-David?

  I like it. I like it. I like it. So, right off the bat, today Bitcoins 90,000, 91,000. Did you already have it planned that you're gonna make the investment today? Was the purchase already scheduled? Was it a pre-scheduled thing? Or was it now? The market doesn't know. Let's make the announcement. We're buying this.

• 3:24Speaker 03

  You know, on October 30th, we announced our 2121 plan. So, $21 billion worth of equity we're gonna raise and $21 billion we're gonna raise in fixed income securities. And we filed this shelf registration to sell the 21 billion in equity in at the market offerings. So then the next week, we had the election, a lot of activity, the red sweep. And then that Monday, Monday a week ago from today, we announced we'd actually bought $2 billion of Bitcoin. So that was like a $2 billion week. And it's like 27,000 Bitcoin or something. But then another week went by.

• 4:08Speaker 03

  So the announcement this morning was from last week's activity. So that's five days in the marketplace. So we did about $2 billion the first week and we did $4.6 billion the second week.

• 4:24Patrick Bet-David?

  This is the biggest ever, biggest purchase you've ever made?

• 4:25Speaker 03

  Yeah, I think it's the biggest Bitcoin purchase ever. Yeah.

• 4:29Patrick Bet-David?

  Yeah, because I see this year, August 2020, you made a quarter of a billion. September 2021, 75. December 2020, you bought 50 million. February 2021, you bought a billion. November 11, 2024. Last week, 2 billion, and then today, 4.6 billion.

• 4:45Speaker 03

  Yeah, so 6.6 billion since we had our quarterly results, so. Well, you know, I think it's like 41, 42 times we bought Bitcoin.

• 4:53Patrick Bet-David?

  Mm-hmm.

• 4:54Speaker 03

  In that range, so ever since August of 2020, we keep buying, we don't sell. It's a very simple strategy. Bitcoin is Manhattan in cyberspace. I just want to keep buying Manhattan in cyberspace. I have this theory that one day, 8 billion people want to put their money in Manhattan in cyberspace. And of course, the more we bought, the more transparent we are, the more the capital markets get behind us. So now, if you're an investor on Wall Street and you're looking for the company that's going to buy up cyberspace, then you're buying MicroStrategy stock. And some people like Bitcoin, so they buy Bitcoin, you know. Every day of my life, I tell people to buy Bitcoin. Some people want more Bitcoin, right?

• 5:37Speaker 03

  The joke I have is the only thing better than Bitcoin is more Bitcoin. So we borrowed 4.2 billion dollars at 82 basis points, and we bought Bitcoin with it. So for the people that like Bitcoin, they buy it, but people that really like it want to borrow a lot of money and buy more. And then there's another group of investors, the convertible bond investors. And how do you buy Bitcoin at the all-time high and get the upside but don't have the downside? So you buy the bonds, and it turns out that our bonds have outperformed Bitcoin, but they're bonds. And so that blows people's minds that we can actually sell you a bond. They don't just outperform all the other bonds. Some of these bonds are, I mean, they're trading 200-plus against 100 basis, so they're up 100%. So they outperform all the bonds, but they also outperform the Bitcoin.

• 6:22Speaker 03

  And that's because we've created a public company with a tiered capital structure, and we've got a lot of permanent capital. Then we've got the senior bonds and the capital structure. And then the equity, you know, generates a BTC yield, and so a lot of Bitcoin max. Pile into the equity and that gives us a premium and we're able to use the premium from the equity in order to create very accretive capital markets transactions with the bonds and the rest of the

• 6:50Patrick Bet-David?

  Now, the question is like when you went from, you know, forty-one to thirty to twenty dollars and the markets reacting to you. Michael Saylor was wrong. He he he made a mistake. Look what's gonna happen to all his investors money. Biggest mistake. He's gonna get a margin call. He's about to lose it all, right? Did you ever get a margin call? Did that ever happen?

• 7:11Speaker 03

  No.

• 7:12Patrick Bet-David?

  Nothing. Were you ever close to a margin call?

• 7:14Speaker 03

  No.

• 7:14Patrick Bet-David?

  Not even close?

• 7:15Speaker 03

  No.

• 7:15Patrick Bet-David?

  Why weren't you close to a margin call?

• 7:18Speaker 03

  Well, we just weren't. I mean, like, most of our debt is convertible debt. It's not margin and call. I mean, you can't call it. It's unsecured. No recourse.

• 7:26Patrick Bet-David?

  I got it.

• 7:27Speaker 03

  Like, so we borrow a billion dollars for five years for zero percent interest. There's no margin call possible.

• 7:33Patrick Bet-David?

  Who gives you a billion dollars for five years at zero percent? Is that when money was cheap?

• 7:38Speaker 03

  Convertible. Actually, they still do. We just we borrowed a billion dollars two months ago at eighty-two basis points. And so the way it works is we're selling convertible bonds. And the convertible bonds have a bond component and then they have an option component, like a call option. And so the convertible arbitrators and the options traders, they like the volatility in the stock. You know, one thing you might not know is is we have the most volatile stock in the S and P five hundred. So if you took all five hundred stocks in the S and P five hundred, you said, which is the most volatile? Like, we're like a hundred vol. The S and P, the VIX is like fifteen. You know, most of the mag mag seven stocks, they would be like twenty, twenty-five vol.

• 8:22Speaker 03

  Bitcoin is fifty, so it's like three to four times the volatility of the S and P index. MicroStrategy, we lever the Bitcoin, so we get two X that. So we get to a hundred. And conventional investors are afraid of volatility. They're, you know, they fear it. They're like, I can't handle the volatility. But volatility is like RPM in an engine. It's like spinning at 100 RPM instead of 10 RPM. So if you plug volatility in the Black Scholes equation, the options are a lot more valuable if you have volatility. So when I'm selling a convertible bond, it's got an option attached to it. So, so if you're an investor, you want to buy a convertible bond from a company with

• 9:04Speaker 03

  large volatility, large liquidity and durability, right? You want to know the company's going to keep going. But if you think about liquidity, that's like energy. So like, maybe I spin, I spin that little Merry Christmas hat, you know, at 50 RPM. It's a little kid's toy or a little balsa wood propeller on your kid's toy. But if I take a baseball bat and I spin it at 100 RPM, it's a weapon. But if I take a 20-ton flywheel and I spin it at 100 RPM, it's a, it's a turbine. Like I can, I can move a ship. And so we have, well, now we have $30 billion worth of capital.

• 9:43Speaker 03

  And when we're spending it at 100 vol, that's a huge opportunity for options traders. So there's a massive options market, a massive amount of liquidity, a massive amount of volatility. And so the convertible arbitrage guys, let me say it differently. If you have 100 vol, you can generate 100% interest just by selling the upside. Like, so people, there are funds like MSTY. All they do is just sell the calls. They just, they just sell the volatility and they generate like 180% dividend yield. So who, who loans us the money? People that want that volatility because the volatility is worth a lot more than getting paid 12% interest.

• 10:25Patrick Bet-David?

  So who is, who is giving you the money? Who's it coming from? What is a typical investor looks like?

• 10:32Speaker 03

  Well, it depends. For the equity, it's Bitcoin maximalist and that people that believe in Bitcoin that want to outperform Bitcoin. It's also institutional investors that like Bitcoin, but they can't buy Bitcoin because of their charter. They can only buy an operating company. Many investors have large pools of capital and they're not allowed to buy the commodity. They have to buy a company.

• 10:56Patrick Bet-David?

  So the question when a lot of people ask and says, "Why would you give your money to MicroStrategy to invest? So why not just go do your stuff and buy Bitcoin?" This is because some can't do that, right?

• 11:06Speaker 03

  Well, there's a lot of answers to that. One is, can you borrow a billion dollars for free for five years with no recourse and unsecured?

• 11:15Speaker 03

  Probably not, right? Individuals can't borrow money for free for a long period of time. It's difficult. Companies can. So one reason why is because we can borrow $4.2 billion unsecured for a long period of time and pay less than 1% interest. So when you're investing with us, you're not just getting the Bitcoin. You're getting the access to the company that has the cheapest cost of capital. We probably have the cheapest cost of capital in the entire market. Like, if you look at every S&P company, if you look at every company in the market, who else can borrow billions of dollars for less than 1% interest? So one thing they want is they want our financial power. But then if you go to Europe, like in the UK, I think it's impossible.

• 12:00Speaker 03

  It's illegal for a UK investor to buy Bitcoin. They can't. Like, the regs don't allow them to buy it.

• 12:07Patrick Bet-David?

  Anywhere.

• 12:08Speaker 03

  In the UK, they can't buy it. And they're like retirement fund. They have retirement plans and 401Ks. So a lot of times there are regulations that prohibit investors from buying Bitcoin, but they can buy companies. We're a company, so they can buy our stock. So if you had money locked up in your retirement plan and you loved Bitcoin, but you can't buy the Bitcoin, you can't even buy the ETF. You can buy MicroStrategy. There are a lot of pools of capital that they... They could buy us. And there's another example, which is, you know, there's been no options market on Bitcoin ETFs, and you can't margin it, so you can't borrow against them.

• 12:49Speaker 03

  But with MicroStrategy, we have very healthy options. We have an $80 billion open interest in our options market. That's extreme. Like, the options market in our stock is 20x bigger than the options market in Beto, which is the only Bitcoin ETF that had options. So sometimes people want to use those for leverage. And then the last point is, you can't borrow against those ETFs. But if you had $1 million of Apple stock, you could borrow against it. It's so for plus 100 basis points. If you have $1 million of MicroStrategy stock, you can borrow against it. If you have $1 million worth of IBIT or BTC, you can't.

• 13:28Patrick Bet-David?

  What percentage of MicroStrategy stock is in Bitcoin? Is it 100%? Or what's the percentage of it?

• 13:34Speaker 03

  Well, one, all of our-

• 13:36Patrick Bet-David?

  Not the technology. I know the technology, but of the investments you guys make, what percentage is Bitcoin?

• 13:41Speaker 03

  We have $30 billion of Bitcoin, and we have $60 million of cash.

• 13:49Patrick Bet-David?

  I got it. I got it. So 99%.

• 13:52Speaker 03

  99 point something.

• 13:53Patrick Bet-David?

  Sure. That makes sense.

• 13:55Speaker 03

  All of our liquid assets are Bitcoin. We're a very pure play, and we don't diversify, and we don't hedge. Sometimes people say, "Well, why don't you diversify, or why don't you hedge?" And the answer is, because everybody that buys our stock doesn't want us to hedge. Everyone, the people that short my stock, they want me to be long. The people that are long want me to be long Bitcoin. You can diversify using our stock. If you want to be 5% exposed to Bitcoin, you can either buy 5%, you can put 5%, if you had 100 million bucks and you wanted 5% Bitcoin, you could buy $5 billion of IBIT. Or you could buy less, you could buy two or three million dollars of MicroStrategy, because we're like 2X Bitcoin.

• 14:39Speaker 03

  So, and if you want to be 98% something else, that's your decision.

• 14:43Patrick Bet-David?

  I wonder, I wonder who shorted you guys? I'm looking at Carisdale Capital, a hedge fund that has shorted MicroStrategy, right? Who else? Anybody else that's known that shorted you guys, that was against you?

• 14:56Speaker 03

  Well, first of all, I think there's like 35 or 40 billion dollars of put interest, short interest in the options market. A lot, and there's probably billion, 10 billion dollars of short equity. But they fall into two categories. Some people don't like crypto, or they don't like Bitcoin, actually. So that's one reason. They might short it because they don't like the asset class, and they just short it naked. Another group of people might be macro traders, and maybe they're shorting it to hedge another bullish play, or because they think there's going to be a negative macro event, and Bitcoin is a macro asset. So if you want to take a negative short macro play, like when there's a missile scare,

• 15:41Speaker 03

  the Iran-Israeli missile crisis, and people think there's going to be war in the Middle East, Bitcoin trades down. And so if you, you know, on Saturday night or something, or if you think something like that, you might want to take a short macro view. And because you can't short Bitcoin with leverage, but you can short MicroStrategy with, you know, with these options. So if you wanted just a macro handle, you might do it. And then the third class are these arbitragers that think that they want to short MicroStrategy and go long Bitcoin, because they're going to bet that the premium we trade against is going to compress, and that was the Carisdale trade.

• 16:19Patrick Bet-David?

  I got it. And I'm looking at an article that says, "Over the next three years, you're planning on buying another 42 billion dollars of Bitcoin."

• 16:25Speaker 03

  Yeah.

• 16:26Patrick Bet-David?

  So you can't get enough of this?

• 16:28Speaker 03

  No, I mean, look, I think Bitcoin was, you know, it was a 90 billion dollar asset class in March of 2000, when I was first looking at it. And then by August, it was about $180 billion asset class. And right now, four years later, it's $1.8 trillion asset class. And I think it's going to 18 trillion, then 180 trillion, then it's going to go beyond that. So I think it's a very simple thing. I think Bitcoin is going to grow from 0.1% of the money in the world to 7% of the money in the world over the next 21 years. And of course, you should just go long and keep buying it.

• 17:06Patrick Bet-David?

  0.1% to, you said 7%?

• 17:09Speaker 03

  Yeah, it'll go from like 1.8 trillion to $240 trillion, and it'll go up 29% a year ARR. That is my base case.

• 17:19Patrick Bet-David?

  And I've heard you say that in 21 years, it's going to be at $13 million?

• 17:23Speaker 03

  That takes it to 13 million a coin.

• 17:25Patrick Bet-David?

  13 million a coin?

• 17:26Speaker 03

  13 million a coin.

• 17:27Patrick Bet-David?

  At 29%?

• 17:28Speaker 03

  Every Bitcoin you don't buy is going to cost you $13 million, my friend.

• 17:33Patrick Bet-David?

  Every Bitcoin. So let me ask this question.

• 17:36Speaker 03

  Your four Bitcoin Ferrari is going to be a $55 million thing.

• 17:43Patrick Bet-David?

  Let me ask this question. So right now, what's MicroStrategy worth today? What's the number? 74 billion? Whatever the number was, right? Can you look up MicroStrategy market cap? I'm just curious. Okay, $73 billion today. If you're saying 0.1% today, it's going to go to 7%. That's 700X, right? So if it's 90,000 today, if I do 13 million divided by 90,000, you're expecting to 144X MicroStrategy in 21 years.

• 18:20Patrick Bet-David?

  If I do 144 times 73 billion, you're estimating to be a $10.5 trillion company in 21 years. Is that correct? Give or take?

• 18:32Speaker 03

  Yeah, I guess with that math, yeah.

• 18:35Speaker 03

  Bitcoin goes from 90,000 to 13 million, so multiply 13 divided by 90,000 and it gets you to a big number.

• 18:43Patrick Bet-David?

  You were given it.

• 18:44Speaker 03

  You know, but Elon's forecasting 30 trillion, so we're still chasing after the robots that sell flying cars.

• 18:50Patrick Bet-David?

  So the 30 trillion he's forecasting is what? That's not Bitcoin, that's just what he's forecasting.

• 18:54Speaker 03

  Oh, for Tesla.

• 18:55Patrick Bet-David?

  For Tesla.

• 18:56Speaker 03

  For Tesla.

• 18:56Patrick Bet-David?

  And that's what he's saying he's going to be at in 21 years.

• 18:59Speaker 03

  That's what I heard. And I don't, actually, I think he's going to go faster. I don't think he said 21 years. Mine is a long-range forecast, I don't know what timeframe.

• 19:06Patrick Bet-David?

  How's your relationship with them, with Elon?

• 19:08Speaker 03

  We all love Elon.

• 19:10Patrick Bet-David?

  Okay, so, but you're also a super psycho competitor as well. I don't think you're a guy that's sitting on the sidelines just wanting to be, you're also a very competitive guy.

• 19:19Speaker 03

  I stay in my lane. He does rockets and satellites and cars and robots, I'm going to stay in my lane, I'm just about Bitcoin.

• 19:25Patrick Bet-David?

  So let me ask this, when somebody sits there and you're like, okay, I'm going to build a company, right?

• 19:30Speaker 03

  Yeah.

• 19:31Patrick Bet-David?

  If you build a company and you're going to take the money, you're going to say, I'm going to reinvest it in whatever I operate, okay? And what I operate, I can foresee growing it, pick a number, 100% a year, okay? Even if you grow a company 100%, let's just say your first year you do, whatever, million bucks, okay? Second year you do 2 million, 4, 8, 16 million, 32 million, 64 million, 128 million, 256 million, half a billion, 1 billion, 2 billion, 4 billion, 8 billion, 16 billion, 32 billion, 64 billion, 128 billion, 250 billion, half a billion, 1 trillion.

• 20:14Patrick Bet-David?

  Let's look at this, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21. If a person started a business today that did a million dollars this year and they grew at 100% the next 20 years? Even in 20 years, when you're a 10 and a half trillion dollar company, they're just going to be a trillion dollar company. So you're seeing this as, rather than operating a company, we're going to be better off just knowing what's going to happen to Bitcoin, because Bitcoin's going to be the next Manhattan.

• 20:46Speaker 03

  Basically, what I'm saying is that the 29% ARR is the risk-free cost of capital in the crypto economy. And the way you get to that number is Bitcoin's been going up about 55 or 60% a year for the past four years. It's been going up a little bit faster before that. But right now Bitcoin's appreciating 60% a year. The S and P index, which is the conventional cost of capital, is more like 14, 15% a year. So you've got like a 4X difference. The mainstream economy is plus 15 points, Bitcoin is 60. They're going to converge. Bitcoin is, as Bitcoin gets to the size of the S and P,

• 21:27Speaker 03

  when it's 100 trillion or 200 trillion and it's close to the S and P, it's going to be 1.5X the performance of the S and P and 1.5X the vol. The VIX, which is the S and P volatility, is about 15. The ARR is about 15. Bitcoin's like 60, 60. I mean, and you can figure it out from the law of large numbers. When Bitcoin's 100 trillion dollar asset class, it's not going to be as volatile. And of course, at some point, companies in the S and P are all going to hold Bitcoin. And so like, if MicroStrategy gets in the S and P and Tesla owns Bitcoin and other companies, you know, if Microsoft starts buying Bitcoin, pretty soon the performance of Bitcoin is going to goose up,

• 22:10Speaker 03

  is going to improve the performance of the S and P. And then Bitcoin's going to converge. Bitcoin's always going to be more volatile, because it's 24/7 365. And it's always going to be higher performance, because it doesn't have the risk factors of property or companies and the like.

• 22:28Patrick Bet-David?

  I think this is what you showed, right? You were showing this presentation.

• 22:31Speaker 03

  Yeah, that's the chart.

• 22:32Patrick Bet-David?

  Bonds, gold in the last four years, 6%. Real estate, 10%, S and P 15%.

• 22:36Speaker 03

  You know, that's a very useful chart. You can pretty much understand the world if you Focus on that, which is if you capitalize on bonds, you're minus 5%. That's why all the banks are struggling and that's why operating companies can't accumulate capital. Because what that's telling you is that if you're using bonds as capital, it's toxic. It's sucking 5% of your life out of you. And look at the cost of capital, 15%. So here, if you use bonds, you're minus 20% versus the S and P. That means that it's an awful way to build shareholder value. If I asked you, do you want to hold $100 billion of cash in bonds and you're Apple or Microsoft? The answer is no, because it's minus 20%.

• 23:21Speaker 03

  You might as well just give it back to the shareholders, they put it in the S and P index. But now, look at the other side. Bitcoin is 4X that. So if I said you could put $100 billion into bonds, or $100 billion into the S and P, or $100 billion into Bitcoin, which of the three charts do you want? It's pretty obvious, you take the 60%. So what MicroStrategy did is we capitalized on Bitcoin, which is 60%, and then we levered it up with cheap convertible debt and equity raises, and we got to 120%. And that's how we ran 30X. That's why we outperformed Nvidia, like we're 2 or 3X Nvidia over this time period, because we're actually capitalized.

• 24:06Speaker 03

  Now, coming back to the idea of growth. Look, the best, the big idea here is there's $450 trillion of money invested in bonds, invested in real estate, invested in equity by wealthy individuals, families, and institutions, and it's just for a long-term store of value. People that are wealthy just want to stay wealthy. People just want to keep their money. So they're buying these store of value assets from the 20th century, and those store of value assets, they kind of bleed 3% energy because of famine, and hurricane, and war, and inflation, and competition, and obsolescence, and accident, and ports, and unions, and fill

• 24:51Speaker 03

  in the blank with all the things that caused your investment not to work. That's 3% of $450 trillion. That's like 10 to 15 trillion dollars of entropy, of chaos, every year.

• 25:05Speaker 03

  So the big idea is Bitcoin is just here. The money is just running from the 20th century to the 21st century. It's moving from physical space to cyberspace. It's moving from the finance space to the digital economy, the analog to the digital. What we're saying is sometimes the most lucrative thing you can do is do nothing. That is to say, I'll give you an example. You have a billion dollars, you're in Africa, and I tell you, you can go and invest in anything in Africa, you're gonna hold it for 30 years. I'll give you a thousand guys to analyze everything. Or you can buy a billion dollars of Bitcoin. And you're like, well, the billion dollars of Bitcoin is doing nothing. I'm like, yeah, you're keeping the billion dollars forever, and you're doing nothing.

• 25:50Speaker 03

  The billion dollars invested in Africa is I'm taking Egyptian risk. I'm taking South Afri-- I'm taking Zambia, Central Africa risk. I'm taking Nigeria risk. I'm taking risk on that ranch. So, most of the time, people have to take risks, and then they gotta worry about it. Bitcoin is risk stripped away from the capital. And inflation stripped away from the capital. So when I evaluate any investment, my view is, okay, well, is it gonna give me a risk-free 29% ARR? By the way, coming back to that, it's like 60% ARR collapsing down to like 20% over 21 years, and the average works out to 29%.

• 26:33Speaker 03

  And the assumption is the dollar supply keeps growing at 7, 8, 9%. And then you get an additional gain because we invent robots and AI and flying cars. And so, the actual S and P index is growing because the US prints more dollars. But it's also growing because we invent obscenely cool, useful things, like the iPhone or like electric cars. So, the future is good, but at the end of the day, Bitcoin's future is just pure digital capital. And I look at it as, why don't I just keep buying something going up 29%?

• 27:13Speaker 03

  All I gotta do is borrow the money or raise the money at a cost of capital less than 29%. Over 21 years, and I, you know, and it's, it makes sense for us because we're a pure play, right? People want us to do that. I mean, the people that are short, they want us to be pure play. The people that are long want us to-

• 27:33Patrick Bet-David?

  That makes sense. It's very honest relationship both ways. The guys that want you to fail, they want you to think long-term because they want you to fail long-term. So, you're patient about it. So, they're gonna make money off you. But the guys that are also pro you, they also want you to be long-term, that you're patient with it. And I get that part.

• 27:47Speaker 03

  Yeah.

• 27:47Patrick Bet-David?

  Uh, I guess the question, and the part that you explained, which was very simple, was, this is something anybody can do. It's duplicatable. I'm not sharing anything with you that's complicated. Rob, can you go to that one slide that you, uh, he shared about Manhattan, which I think's the best one? If you can go to the one with Manhattan where you're breaking down the, um, the different ones that he had. It's right there. Yeah. This is the one. 1626 Manhattan. Can you zoom in a little bit, Rob, so I can see it? You know, uh, what was it? 60 guilders?

• 28:17Speaker 03

  What I'm saying is, if you have a chance to buy Manhattan for 60 guilders in 1626, you should buy it. But what I, what I would say, which is deeper, is you could buy Manhattan real estate every decade for 300 years and always pay more than the previous guy paid, and it would still be a good idea. And that's because it's the greatest city in North America. Everybody wants to do business there. There's a limited amount of land. It's on a, it's a perfect rock, limited amount of land. So, there's never a bad time to buy Manhattan-

• 28:50Patrick Bet-David?

  But even if you look at this though, Louisiana, we bought it for 15 million. Uh, APR 6.3, payoff 12 trillion. California, 1848 for 18 million, 7.78 trillion. Alaska for 7.2 million in 1867. It's a trillion, 7.8, uh, 7.8. You're saying Bitcoin's gonna be 240 trillion in 21 years?

• 29:12Speaker 03

  Yeah.

• 29:14Patrick Bet-David?

  Yeah, just very easily, the way you say this, it's not a big deal to you.

• 29:18Speaker 03

  I mean, the takeaway from that slide is the key to getting rich is by scarce desirable property, pay for it with fiat, I mean, how much does a gilde work today? Like, pay for it with money you printed, borrow the money, but, you know, we borrowed the money to pay for Alaska. I mean, the country was broke in 1867, we just fought the Civil War, but what did we do? This guy Seward had the vision to print a 7.2 million dollar check, pay off the Russians. And so, number one thing, buy the property. Number two thing, hold it for a long time, right? I mean, because it might not feel like much, but when you're compounding over 100 years

• 30:00Speaker 03

  or 200 years, and so, so what all those four have in common? Well, they're all something you would want to hold for more than 100 years. And so, what is Bitcoin? Bitcoin is the next frontier. We've already gone as far west as we can go, now we have to go to cyberspace. I mean, eventually we'll go to outer space, but, you know, we're waiting for upgrades and propulsion to go to Mars and the asteroids, but between now and then, you go to cyberspace. And the real point is Chinese billionaires, Russian billionaires, African billionaires, South American billionaires, every company on the planet would rather have their money in the US, but they can't get it to the US. So, where else can I put it? I can put it into the city of Bitcoin.

• 30:43Speaker 03

  I buy Bitcoin, I sell Africa, I sell Venezuela, I sell Russia, I sell Siberia, I sell China, I buy Bitcoin. Bitcoin is digital capital, everybody wants it, everybody knows about it, no one can steal it from you. And, and what's the use case? Well, the use case is to get rich or stay rich, which is like half of everything. Right, the great irony is people can't figure out what it's good for. It's like, for the last 10,000 years, people have been trying to figure out how to get money and keep it. What it's good for is the wealth that allows you to power your family, your country, your company.

• 31:20Patrick Bet-David?

  Yeah, I saw in an article where you were suggesting Apple should buy 100 billion dollars in Bitcoin. You said, "Bill Gates, call me if you want to make the next trillion," meaning buy Bitcoin. And then, when I saw a number that just recently came out, is that Berkshire Hathaway, if I'm not mistaken, they're sitting on 325 billion dollars of cash. 325 billion dollars of cash where they're sitting at. If you, right there, yeah, 325 billion dollars of cash. Are any of these guys in communication with you? Have you spoken to Bill Gates, or Warren Buffett, or Tim Cook, any of them?

• 31:53Speaker 03

  Well, I mean, I speak to anybody about this in confidence, but that I never disclose what I say, or that I spoke to them. But I do speak to a lot of mega billionaires and public companies about it. And I make a few points on this. One, that 320 billion, that is destroying 32 billion dollars a year. They are destroying 3 billion dollars a month in capital, because they're generating a 3% after-tax yield at best, and the cost of capital is 15%. So take 12% negative real yield on that. That is the cost. Multiply 325 billion times 12%, that's what the shareholders are paying right now for that.

• 32:38Speaker 03

  The second point I make is, if you look at Microsoft, for example, 98.5% of the equity value of Microsoft is based on forward expectations of quarterly earnings. And 1.5% of the value of Microsoft is based upon tangible liquid assets. And another way to say it is, Microsoft is 144 times levered to their quarterly earnings. If they earn 3 billion a quarter, or X billion, whatever the number is a quarter. More than that, I guess, but you multiply it by 144x, right?

• 33:17Speaker 03

  And if they miss by a billion, it's 144 billion where you move. And the reason why operating companies are like that is because the SEC 33 Act and the SEC 40 Act required that operating companies hold no more than 40% of their liquid assets and securities. So normally, that's used Treasury bills. And Treasury bills, as we just showed on that chart, are toxic. It's toxic capital. It's poison. You might as well just inject poison into your veins, right? You're bleeding 10% of your capital a year. So they don't keep the capital.

• 33:55Speaker 03

  And Bitcoin is a major revolution because, starting in 2025, you can account for Bitcoin on fair value basis, which means that Bitcoin is just as good as Treasury bills. And it's a commodity, so you can have 100% of your balance sheet in Bitcoin. And what that means is Microsoft, if they just stopped divvying out their cash flow and stopped buying back their stock, and they convert it to a Bitcoin buy, and you crank in like a conservative, like a 21% assumption, like half their cash flow in Bitcoin, you make a trillion dollars over 10 years.

• 34:36Speaker 03

  You know, you put all your cash into Bitcoin, you make 2 to 4 trillion dollars for the shareholders.

• 34:42Patrick Bet-David?

  If Berkshire did that?

• 34:44Speaker 03

  No, if Microsoft did it.

• 34:46Patrick Bet-David?

  If Microsoft did.

• 34:47Speaker 03

  If Berkshire did it, they would make more, right? I mean, they've got, if they flipped that, you know, put $300 billion into Bitcoin and grow 21%, you're generating $60 billion a year of investment income.

• 34:59Patrick Bet-David?

  Michael, how much do you cold call? Like, meaning, how much do clients call you versus you out call them? Are you also prospecting?

• 35:07Speaker 03

  People contact me.

• 35:08Patrick Bet-David?

  Okay.

• 35:09Speaker 03

  Like, I'm not out there, like, I'm not out there trying to get in the doors to pitch this. I just do it as a public service. I mean, my day job is I focus on micro strategy. Our capital markets activity and you know, we're going to do an equity or a debt raise or something. And then my my copious free time, I advocate and educate on Bitcoin. And then as a result of that, you know, I've got 3.7 million followers. So I get a lot of people, a lot of inbound people. I talk to people like similar scientific, you know, where where the CEO calls me and says, I want to talk about what you did, explain it.

• 35:49Speaker 03

  Or and I'll get inbound calls from people that want to be on a Bitcoin standard and I'll explain what we did and how we did it. And sometimes I'll brief the board of directors or the officers and directors, but.

• 36:00Patrick Bet-David?

  How often are those calls, prime ministers or presidents of countries?

• 36:04Speaker 03

  Sometimes it's politicians, it's sometimes it's governors, sometimes it's senators, sometimes it's congressmen, sometimes it's.

• 36:11Patrick Bet-David?

  Billionaires and.

• 36:12Speaker 03

  Lot of, you know.

• 36:13Patrick Bet-David?

  I guess I guess what I'm asking a question is like, I wonder if if you would be, you know, open to the idea or would it even be that way? Because I think in this space, if you were to call somebody at Berkshire and say, guys, can I come? Can we spend an hour together? Can we get 30 minutes together to talk to you about this, you know, to see what that would look like? I wonder what that conversation would look like with you and Buffett, if you sat across from each other.

• 36:37Speaker 03

  You know, I'd be willing to bet you that if I had an hour alone with Buffett in a calm environment. I'd walk out and he would say, this Bitcoin thing's a pretty good idea. Charlie would have liked it. We're going to buy some.

• 36:49Patrick Bet-David?

  Have you made the cold call?

• 36:51Speaker 03

  I have not.

• 36:51Patrick Bet-David?

  Why not?

• 36:52Speaker 03

  Because Bitcoin's on a need to know basis and people have to need, they have to feel like they need to understand it. Like they've got a problem in order to have an open mind. And if they don't, if they don't acknowledge they have a problem, they don't have an open mind and they take a conventional view toward the world. It's like. The people with a with a strong corporate view and a healthy company and a strong conviction in their company, they don't have an open mind to a profound paradigm shift. They don't they don't want to embrace that idea.

• 37:25Patrick Bet-David?

  Maybe the call to Buffett could be seen as a public service and you want to be a public servant. So if you were to make that public service phone call and you guys sat down and spoke and you went to Omaha and all of a sudden he comes out and says, you know, we've made a decision to buy 100 billion hours of Bitcoin after my conversation with Michael Saylor. I think that's a public service.

• 37:43Speaker 03

  I will say for the record, I'm happy to go visit anybody that has 100 billion dollars of cash that's sitting and burning 10 billion dollars of shareholder value a year. I will go visit you and and I will I will provide you with all of the information you need in order to be convinced that you should flip to the Bitcoin standard.

• 38:03Patrick Bet-David?

  He's got 325 billion of it. But by the way, when I looked at the numbers with you guys, you got roughly what is it 331,000 if I'm not mistaken? Is that how many it is? 331,200 Bitcoins, right?

• 38:14Speaker 03

  Yeah, as of this morning.

• 38:15Patrick Bet-David?

  And I saw that BlackRock, their Bitcoin trust, the iBit, iShare has roughly 471,328 as of November 15, which is 2.2%.

• 38:26Speaker 03

  Yeah, they're ahead of us. I'm jealous.

• 38:28Patrick Bet-David?

  So but here's the question I'm asking. If they have 471, which is roughly 2.2% of all Bitcoin, you got 331, which is roughly 1.5% of all Bitcoin, right? Neither one of you guys are selling. So 4% is gone. Okay, of the 21 million shares, many times you'll hear that 3 million of it, people are not going to get access to, right? Whatever reason, 18 and a half million, give or take. So let's just say 18 million. So there's another 3 million gone there. So you have yours, they have theirs. So let's just say 317 million. And then you've also brought up the idea. I think the US government right now, if I'm not mistaken, holds 183,000 Bitcoins at $12 billion, right? If I'm not mistaken.

• 39:13Patrick Bet-David?

  183 Bitcoin, uh, 1,000 Bitcoins at $12 billion. I think you've proposed to President to buy a, uh, a, a million shares of Bitcoin, a million Bitcoins, which would be roughly 90 billion. And if they wanted to go to the highest level, if they were to buy 6 million of it, which would be roughly half a trillion dollars. At that point, if that happens, and others typically, it's a buy and hold, uh, a situation. If it gets to a point that most of it is locked up, what happens to the store value?

• 39:43Speaker 03

  Can you put up the slide with the, with the Bitcoin Strategic Reserve and the, and the different plans there that's in that presentation? So, I mean, first of all, it's Senator Lummis, Cynthia Lummis has put forth the proposal that the United States established a strategic Bitcoin Reserve, and it's a, it's a brilliant, uh, a brilliant idea that she's presented, uh, to the Senate. And, uh, I have a slide in my presentation at the very end that actually shows it.

• 40:10Patrick Bet-David?

  Oh, we don't have that one. Just so you know, we don't have that one.

• 40:12Speaker 03

  Okay, well, well, um, then I'll just describe it verbally. So that, the geopolitical logic here is simple. It's go where all the money is going to go and buy it first. And so if you knew that everybody was going to move to Manhattan and you could buy 20% of Manhattan in 1650, it would be a good idea. But maybe more to the point, the British came to the New World and they grabbed the New World, and that's what created the British Empire. So, the United States runs the world's reserve currency, but Bitcoin is emerging as the world's reserve capital network. If you just want to keep your money forever. And, and everybody in the world loves that idea. I'd like to just keep my money forever.

• 40:56Speaker 03

  So, the smartest thing for the US to do... Is to buy up as much of that as they can. So you buy a million coin, that's 5% of the network. Buy 4 million coin, you got 20% of the network. Why not buy 20, 25, 30% of the network? Buy... If you buy the network, you can buy it for money, which is effectively free. In fact, you could just sell the gold, swap it to Bitcoin, and then as Bitcoin becomes a 200, 300, 400 trillion dollar asset, right? You're sitting on a anywhere from 40 to 80 trillion dollar gain. And so, the logic of this is pretty clear.

• 41:37Speaker 03

  First of all, all the foreign capital in the world is going to be drawn into the Bitcoin network. So if the United States owns it, then that's like the same as the money coming to the US. You're just drawing capital from Russia, from China, from Africa, from South America. It's going to come to the US on the Bitcoin network if the US owns it. The second logic is all the capital from the 20th century is stampeding into the 21st century. So, all the money that was invested in crappy bonds and decaying real estate and warehouses falling down and companies that are going out of business, all that money's going to go into the Bitcoin network. So you own the 21st century. And, you know, the third idea here is,

• 42:20Speaker 03

  right now, a lot of people use US sovereign debt as their capital asset, which as I just pointed out, is minus 5%. Every business person knows it's not as good as the S&P index. So if people start to swap out the Treasury bonds and they start to buy Bitcoin with it, then you would want to own the Bitcoin, because that way you don't have to worry about people replacing the US Treasury asset with a Bitcoin asset, because the US owns Bitcoin too. So this defends the US reserve currency status. It defends US economic leadership. It attracts capital from our enemies. It attracts foreign capital. And it actually lays in place a peaceful, equitable solution

• 43:04Speaker 03

  to working out our differences with everybody in the world that a business person would appreciate. And, uh, so yeah, like if you could buy Manhattan for free with 60 Gilders or some glass beads or something, and you knew that it was the best port in North America, and one day, all of Europe's going to come and do business in North America, it would be the best investment going.

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• 44:28Patrick Bet-David?

  Yeah, I mean, if, if, again, if, have, are you in communication with Trump? Do you guys speak often or no?

• 44:37Speaker 03

  You know, like, I couldn't tell you if I did.

• 44:40Patrick Bet-David?

  I'm not even talking about.

• 44:41Speaker 03

  You know, like, I talk, I talk to a lot of people in confidence about this, but maybe more to the point, I'm very public. I mean, the, the, you know, the presentation at Bitcoin Nashville that I had, had like a million views. And the presentations I've uploaded, the keynote I put up last week is like half a million views online. So everybody in the industry knows what I think.

• 45:04Patrick Bet-David?

  That's a difference because there is that. And then there is the conversation where, you know, if there's a relationship for somebody to be in someone's ear. For example, you know, Musk is in there. They're doing things together, right? So what is that organization that they build? It's called DOGE, right? Department of Governmental Efficiency, if I'm not mistaken, something like that, right? So how did that come about? Well, it's probably because Musk is in Trump's ear. And Trump is always looking for smart people around them that are giving ideas. I'm asking a question because I'm. wondering if somebody like you is in his in his ear.

• 45:40Speaker 03

  Well, he's got a lot of smart people around him and I'm talking to all those people.

• 45:43Patrick Bet-David?

  Okay, so then in other words, the answer is directly or indirectly, yes, is kind of what it looks like.

• 45:49Speaker 03

  I would say that.

• 45:50Patrick Bet-David?

  Okay, I like that. I'll take that. I mean, you know, whatever the audience, however, the audience wants to process it. Uh, they can. In regards to when you see companies like BlackRock, them getting into it, yourself, you getting into it. Um, you know, when BlackRock got into it, it was a market shift was it was it was almost like a level of validation. Where the market is like, wait a minute, who got into it? A critic? Somebody that wasn't for it? They're flipping? They're not buying? Yeah, you know, we were wrong about it and we're doing this, right? How many of these stories that are public, again, I'm not talking private stories. How many of these stories are public, Michael, that people who were fully against it are not coming around and saying, no, we have to add this to our, you know, to our portfolio?

• 46:33Speaker 03

  I I mean, I think Larry Fink of BlackRock is by far the most compelling spokesperson for the Bitcoin movement and he and he is, he kind of epitomizes the intellectual journey, which is a successful financier. First hears about it and hears about all the negative things and and good financiers, they go through the checklist of what are the hundred risk factors? Right? Because if you're really good at finance, you can tick off all 100 risk factors. So you do the check, you think about it. And you think, well, you know, kind of scary. I'm going to hold off on it for a bit and you're skeptical. I was skeptical in 2013.

• 47:11Speaker 03

  He was skeptical, but at some point, if you're around it enough, if there's a need, if you have a need to know, maybe you get pushed and you realize I need to open my mind and I need to embrace a new idea, find a new idea for growth. Maybe it's defensive, maybe it's a growth initiative. And then sometimes when a critical mass of people that you respect begin to speak with you about it, then you open your mind and and then you take the position that this is actually a new profound revolutionary thing. It's digital capital. I misunderstood it before. I was wrong. I see a place for it in the world. I, you know, we have this saying, which is everybody's against Bitcoin before they're for it.

• 47:55Speaker 03

  Every, everybody is against Bitcoin before they're for it. And so, yeah, it's not, it's not unique. Uh, it's pretty common. It's like one hour to denier. You know, after, after 10 hours, you know, you're a trader. It's like, well, it's an asset. I'll buy it cheap and sell it when it's too expensive. After, you know, a hundred hours, you know, you, you start to move to be more of an investor. Like, you know, maybe this is a good investment, like, like Apple or Facebook. And after a thousand hours, you're a maximalist. You're like, actually, this is an ethical good, this is freedom and economic and property rights to eight billion people. This is a chance for 400 million companies to capitalize on an asset which isn't toxic.

• 48:38Speaker 03

  That wouldn't it be great if you could just buy something and get richer forever without taking risk? Pretty profound idea. And so I, I think it's-

• 48:47Patrick Bet-David?

  You'd have to buy in and you'd have to be patient. And those are two things that are very hard because the American people, the investor flips very quickly and they change their mind very quickly. And that's why the buy and hold concept, remember back in the days, the mutual fund by American Funds Investment Company Act, whatever the, of 1934? I don't know if you remember that. And it would say, you know, if you were with us since the fund started, just type in Investment Company Act of 1934. If you would have started with us since 1934, you know, we would have been at, you know, 12.5%.

• 49:20Speaker 03

  Right.

• 49:21Patrick Bet-David?

  And it would say, but if you missed the top five best days, you're at 8%. If you missed the top 20 best days, what, remember that whole thing?

• 49:26Speaker 03

  Yeah, I do.

• 49:27Patrick Bet-David?

  That's the challenge, right? The buy and hold discipline.

• 49:29Speaker 03

  You can't trade it.

• 49:30Patrick Bet-David?

  How do you teach that? Michael, how do you teach the discipline of buy and hold? Do you think there must be conviction for somebody to fully bind to the buy and hold?

• 49:38Speaker 03

  Every day for the past four and a half years, I get up and I say, buy Bitcoin. And then you do not sell your Bitcoin. Right, very simple mantras. And by the way, and I don't recommend anything else. There's a hundred thousand other investment ideas where it might be appropriate to sell them at some point. That's why I don't talk about them. I just talk about Bitcoin and I say, if you're going to buy it, be prepared to hold it more than four years. The, you know, the short period is four years, the mid-period is 10 years, the right period is forever. Buy it so you can give it to your grandchildren, so your family will be rich in 250 years. That's what I would say about Bitcoin. And, uh-

• 50:19Speaker 03

  You know, Patrick, when you look at generations, you know, when you're in your twenties, you know, you have a lot of time on your hands and you want respect and you want prosperity. You want to make it in life. I need to make money so I can buy a house, have a family, buy a car, do whatever I want. And so you take your time and you invest it in making money. That's why the millennials, the Gen Z's, they get crypto, they get Bitcoin, because they have 100 hours or 200 hours or 1,000 hours. Now, when you get in your 60s or 70, 80s, how many people, you know, past the age of 55, spend 100 hours studying a profoundly new investment idea to figure out?

• 50:59Patrick Bet-David?

  Very rarely.

• 51:00Speaker 03

  It's because you've already made it. You already got a family. If you're gonna have kids and a family and a house and a whatever, you've already done it. And you did it by exercising your trade, because you are good at something and you're confident, and that's your worldview, like Warren Buffett's worldview, etc. So I don't blame people, it's just, when you're successful at the end of your life, you know, you know what made you successful, you don't have a need to know. When you're at the beginning of your life, you're not successful, you've got no respect, you've got no future, you've got no... You better find something new, right? That's why Led Zeppelin, you know, they picked up electric guitars and they played rock and roll, because Beethoven and

• 51:43Speaker 03

  Mozart had already done the other thing. Too late for that. New thing, right? The new people get the new thing. And so occasionally, you find a 30, 40, 50, 60-year-old who will embrace the new idea, but it's like, what is it? You have to be profoundly, you know, intellectually curious. Larry Fink is, that's why BlackRock is gonna make a fortune on this. Or you have to be desperate, frustrated, nothing to lose. I mean, the truth is, I'd characterize myself that way in 2020. It's like, the stock is like $6 a share enterprise value. The company's enterprise value is $6 a share, and my choice is sell the company

• 52:28Speaker 03

  and retire. Or take a risk and open my mind. And I remember I'm sitting at my poolside next to my friend Eric Weiss. And it's March and the lockdowns hit and interest rates go to zero and, you know, and the stock market's crashing. And, you know, and all hell is breaking loose. And I say, so tell me about that Bitcoin thing again.

• 52:50Speaker 03

  It's like, so that's what you'll find that when, you know, you look at people and they're one or the other, but it takes a while for a paradigm shift, you know, you got to really need it or want it. And that's why it's an exponential process.

• 53:04Patrick Bet-David?

  So you're sitting there in 2020 and he said, tell me about that Bitcoin again with Eric Weiss.

• 53:08Speaker 03

  Yeah.

• 53:09Patrick Bet-David?

  And then from the moment he told you, what was your step process of researching? Was it an all nighter till four o'clock in the morning? You sat up, you're like, I can't believe this is what's going on. Were you calling friends? Were you doing research? What were you? What was your process?

• 53:23Speaker 03

  I said, give me the five most, the top influencers on the internet on Bitcoin. He gave me a list of people that I went and I watched all their YouTube podcasts. Then I went and I read all their books. I read the Bitcoin standard. I read Andreas Antonopoulos's books on Bitcoin. I watched the debates, you know, between Eric Voorhees and Peter Schiff on Bitcoin. And once I got through all that and I had done a deep think, then, then I started going in execution mode. How do I get an account? How do I buy this stuff? KYC me, set me up. And then after that, it's like massive education with my company too.

• 54:04Speaker 03

  And partly it was a personal track. What am I going to do? And partly is what am I going to take my company? And that became, that became, I sent a text message to all the officers of the company and all the, and all the directors. I said, I want you to watch three, these three videos on YouTube. And I want you to read this paper about Bitcoin, you know? John Pfeffer wrote a paper, an institutional investor's view of Bitcoin. I said, read this stuff and then we're going to talk. And so after they read it, I had a one-on-one with each one of them. And it was like, it was like basically doing the rounds, every officer of the company, every director of the company. And gradually we formed a consensus, we, you know, we formed teams, we started to power forward.

• 54:47Patrick Bet-David?

  And then you presented it to the clients. Hey, here's what we're thinking about doing. This is the direction we're going. Is that what the next move was?

• 54:53Speaker 03

  You know, it takes from March all the way to August of, uh, August 10th of 2020. And on August 10th of 2020, what we did is we said, hey, uh, we're buying 250 million of Bitcoin, but we're also going to buy back 250 million dollars of our stock in a tender offer. The stock was like 120, this is like 12 dollars post split. And we offered a, you know, a premium. We said, well, you can tender your shares if you don't like the Bitcoin strategy. And so that took 20 days. So the way that we actually rotated the shareholder base and got the shareholders on board with the Bitcoin strategy was we said, we're doing this. We know it's risky. We know some of you may not like it.

• 55:35Speaker 03

  We'll buy you out at a premium if you don't want to go along for the ride. After 20 days, only about 60 million dollars got tendered. So we had 175 million dollars of cash left. And so we went from 250 to 425 million in Bitcoin. Then the stock rallied, generated a lot more cash from stock option issuance. We bought another 50 million dollars of Bitcoin. And pretty soon we're off to the races and the strategy is working. And all of our investors were on the board. They, they wanted to be invested in a company on a Bitcoin strategy more than they wanted to be invested in a company that was going to continue with a conventional, low-growth approach.

• 56:14Patrick Bet-David?

  Let me ask you, how, uh, how big of a victory was when you talk about the red wave when Trump won? And how different would the climate be today? Bitcoin right now is at what 90, 91,000, 92,000, 89,000, whatever the number is? How 90,711, 711? How different would it have been if it was a Kamala victory?

• 56:35Speaker 03

  I think if you look at, um, the difference between a red wave and a blue wave. Uh, I'll take the blue wave first. If it had been a blue wave, Bitcoin would grind up plus twenty, twenty, twenty-five percent, thirty percent against resistance, and the rest of the digital assets industry would degrade down twenty percent.

• 56:58Patrick Bet-David?

  Okay.

• 56:59Speaker 03

  Like, every digital exchange is digital tokens, digital securities, digital currencies, they would degrade and Bitcoin would grind up. And there would be that tension that you see right now for the last four years, where Bitcoin is grudgingly accepted, you know, under protest, but, and the other ones are, are being attacked all the time. But I think the red wave was the, the headwind becomes a tailwind. Bitcoin surges up, not plus twenty, but maybe plus fifty or plus sixty. I think, you know, we go, we go from that to this. And then the digital assets industry goes from degrading down to surging up, you know, it, it goes from minus twenty to now it's coming back. Now, there's a little bit more

• 57:42Speaker 03

  uncertainty with digital assets because we got to wait till next year to figure out what the framework will be. But basically, the polarity got switched from negatively polarized on the entire digital assets economy to positive with the red wave. And I think you just got to have a much more bullish view toward growth and prosperity and innovation in the next four years than you would have had in a blue wave.

• 58:06Patrick Bet-David?

  Okay. So what do you think is going to be by the end of Trump? Give or take? High or low? If you're saying in by, in twenty-one years, it'll be thirteen million, you're saying it'll be at a hundred thousand by the end of the year. What do you think it'll be by twenty twenty-eight?

• 58:16Speaker 03

  You know, I got, I got a Bitcoin twenty-four model that's actually published on GitHub. You can Google it, and if you Google it, you can download it, and then you can crank in your assumptions and see our base case assumptions. And I think my base case assumptions, and it, and it actually spits out the price of Bitcoin every year. And to tell you the truth, I don't have the top of my, off the top of my head, I don't have the exact number for the end of twenty-eight. But I could tell you, basically, the model says it's like fifty-five growth to fifty-two to fifty.

• 58:46Patrick Bet-David?

  Percentage.

• 58:46Speaker 03

  A year.

• 58:47Patrick Bet-David?

  Got it.

• 58:47Speaker 03

  So it's like fifty to forty-five percent growth a year for the next four. Four years and that's like doubling every 18 months or less than 18 months in that range.

• 58:56Patrick Bet-David?

  I got it. I got it. So roughly 350 is, you know, if we were to say 300 to 400,000 dollars, that's about the number.

• 59:03Speaker 03

  I, I wouldn't be surprised.

• 59:04Patrick Bet-David?

  You wouldn't be surprised if it's a number like that. But because you're long-term, you really don't care what it is. You're, you're, you're playing 21 years. You're not playing four years.

• 59:12Speaker 03

  No, I'm like, I'm in it forever.

• 59:14Patrick Bet-David?

  And all your clients, how do you sell them on being in it forever? How do you sell them? If you're talking to me on the phone, I'm like, Michael, you want me to do what?

• 59:22Speaker 03

  You mean my customers or my investors?

• 59:24Patrick Bet-David?

  Customers.

• 59:25Speaker 03

  Yeah, well, the, the, the customers of the software company, they're getting MicroStrategy software. They're delighted with the software.

• 59:32Patrick Bet-David?

  Let me rephrase that. Investors.

• 59:33Speaker 03

  Investors.

• 59:34Patrick Bet-David?

  Yeah.

• 59:35Speaker 03

  Okay, well, the investors are investing in the company because they want more Bitcoin. They don't want Bitcoin performance. They want to invest in a stock that can outperform Bitcoin. So we are a Bitcoin treasury company and the way to think about us is if you just want straight Bitcoin exposure, you buy iBit from BlackRock and, and that's like overnight deposits. I'm putting, I'm buying, you know, a million dollars of Bitcoin and if Bitcoin goes up 50% a year, I'm getting 50% a year and I'm getting the downside and the upside. MicroStrategy will sell you bonds. We're basically the leading issuer Bitcoin-backed bonds in the market. So what if you wanted the upside of Bitcoin without the downside?

• 1:00:20Speaker 03

  I, you know, I want like 75% of the upside, but, but no downside or, or something like that. You buy the convertible bond and so a lot of investors of ours are bondholders and what they want is low-risk, low-volatility Bitcoin. And you can do that through those fixed income instruments. And then the equity holders, they want high voltage Bitcoin. They want 1.5X or 2X Bitcoin. And so you can imagine when I give someone half the return of Bitcoin in the bond, I can give the, I can give the difference to the equity holder. So I'm stripping the risk and the vol and the performance off of the bonds. I'm handing it to the equity holder.

• 1:01:02Speaker 03

  And then you've got derivatives and the options guys, they want 10X.

• 1:01:08Speaker 03

  Leverage and they want 10x long and 10x short. So ultimately you've got different classes of investors. You've got the 10x short, the 10x long, the 3x. There's actually two, uh, two interesting ETFs, MSTU and MSTX. Okay. I think MSTU went from like nothing to $2 billion in AUM in three weeks. And MSTX last I checked out a billion. So imagine an ETF that siphons up 2 to 3 billion dollars of capital in like a few weeks, no marketing. And what they offer you is 2x micro strategy exposure. So when I think about it, I'm like, well, if we're hitting, if MSTR is 1.5x Bitcoin, then those things are 3x Bitcoin.

• 1:01:53Speaker 03

  And then the other bonds are like 0.75% of Bitcoin. What we're really doing is we're refining, uh, this crude capital. I use the analogy of, of Standard Oil or refinery. You put crude oil in one side of the refinery and out comes kerosene, gasoline, you know, and asphalt. And of course you put kerosene in the jet engine, but you don't put crude oil in. And so what people want is they want refined petrochemical products. Or you could think of us as a transformer. I want high voltage power and I also want low voltage power for my daughter's hairdryer. And you're like, well, you know, you're losing, you know, if I put low voltage in a battery

• 1:02:37Speaker 03

  and I put it in my little kid's toy, it's very inefficient. There's a massive markup in it. But the point is the family wants batteries for the kids' toys. They don't want to electrocute Junior, right? So what we're doing is providing low voltage Bitcoin, high voltage Bitcoin. And the only way to do that is to have a 100% Bitcoin balance sheet. Cause I have to have the 30 billion of Bitcoin to sell you the $3 billion of bonds that are 10x over collateralized that also give you the return of Bitcoin and the, and the frequency of Bitcoin. You know, half of this is the return, but the other half is the volatility. The reason those instruments have value is because they're volatile, because I can arbitrage them and sell the volatility.

• 1:03:22Speaker 03

  So a lot of times people think. Volatility is a bad thing, but I would say it's like radioactivity and heat. And a lot of people are afraid of a fire and they're afraid of radioactivity, but you can't have nuclear power without radioactivity and you can't have an internal combustion engine without a fire. And so MicroStrategy has put this crypto reactor in the middle of the company. And because we have that high volatility, high-energy reactor, and we're, it's like, people are like, "Aren't you going to diversify it?" That's like taking this water and pouring it on the fire. Of course, I'm not going to diversify it. Like, I give you fire, you're freezing to death, and the first thing you could think to do is throw water on it? Right?

• 1:04:05Speaker 03

  So, we're actually running the reactor, and that is really our unique value proposition to all those investors, and they can't get it, except from a public company that's 100% committed to Bitcoin.

• 1:04:19Patrick Bet-David?

  Let me ask, there's rumors going on that the CEO of XRP met with Trump, right? Ripple. I think there's a rumor, Rob, if you want to pull it up, if there's something like that, I thought I saw something. Did Ripple CEO meet with Trump, critics remark fuel XRP surge and speculation CEO Brad Garland House remarks amid XRP surge and have fueled speculation Trump stock? So if Musk is in there, Musk, you know, my view, I may be wrong, Musk is meme coins, Musk is Doge, Musk is crypto, Musk is Bitcoin, for the most part, he's open to the idea. He's not specific to one thing. The community with XRP right now and Ripple, has anything with your position with Ripple changed since the last time you and I were together?

• 1:05:04Speaker 03

  Yeah, what I say today is, it's clear we have a pro crypto president, they're all in on crypto, they're all in on Bitcoin, they're progressive, they're all about freedom. And freedom means, you know, the 20th century securities regime was, you got to spend $40 million on compliance to bring a company public, but what if I only want to raise $4 million in capital? How does it make sense that I got to spend $40 million on insurance in order to take a $4 million risk? So I think actually, when we come January, depending upon who runs the SEC, I think you'll have a pro-digital assets SEC, a pro-digital assets Treasury,

• 1:05:47Speaker 03

  a pro-digital assets White House, a pro-digital House and Senate. Now, if you want the crypto industry to grow and prosper in the United States, you need a digital assets framework that is ethically sound, technically sound, economically sound, and that means this is a digital commodity, this is a digital security, this is a digital token, this is a digital currency, this is a digital NFT, this is a digital ABT, Asset Backed Token. If you define all those, and I did, by the way, in my keynote at Cantor Fitzgerald last Thursday, which has gone viral, I said, "Here is your digital asset classes.

• 1:06:28Speaker 03

  Now we need the regulators to give us that framework. Tell us how I issue, how I operate, how I own, how I trade." And if they do that well, I think actually, we're going to see a massive explosion in digital assets in this country. There's no reason why half the equity on the NASDAQ can't start trading digitally. Why not Apple stock trade digitally 24/7/365? Why not Katy Perry issue a Katy Perry token if she wants? It's not an... How about Joe... Or how about your company, PBD? Why can't you actually go public and issue your own digital security or digital token?

• 1:07:13Speaker 03

  There ought to be an ethical way to do it. I think that the law ought to be simpler. It ought to be, "Just don't lie, cheat, and steal." If we go back to this, if you believe in free markets, the free market view would be, "I'm going to give people a way to do these things and just remind them, 'Don't lie, cheat, and steal.'" I'm going to give them a practical legal framework. If you do that, I think you've got... There's 400,000 big companies that are private. There's 400 million companies. And I think the note that I made last week is 0.06% of the businesses in America are able to tap the capital markets.

• 1:07:58Speaker 03

  And so, we have a crushing, over-regulated capital market regulatory regime that started in 1933. And I think that you need an alignment of the White House, the Senate, and the House to put in place a freedom, innovation-oriented digital economy. So I would say, right now, I'm fairly bullish it'll happen. I think they want to do it. And I think that, again, I don't recommend any particular security or any particular investment, other than Bitcoin. But I do think that it's better for the world if we have hundreds of thousands of digital assets created, launched.

• 1:08:43Speaker 03

  And I'd like to see the industry go from a trillion dollars of digital assets to 500 trillion dollars of digital assets that are tokenized.

• 1:08:52Patrick Bet-David?

  Could there come a time where you're pro Ripple and maybe even to the point that you recommend clients to it? Is there a possibility?

• 1:08:58Speaker 03

  I'm Bitcoin-only, 100%. Like, the truth is, I wouldn't even recommend Apple stock. There's no security. I'm not going to recommend...

• 1:09:07Patrick Bet-David?

  0% chance?

• 1:09:08Speaker 03

  Yeah. I wouldn't recommend a security, because there's a counterparty to a security. But the position is, if you came public and you had your own security, or token, or whatever you had, I wouldn't recommend you either. But it's not because I'm not in favor of your business. I just think that, I think that you have to stay in your lane, right? I'm not going to give you recommendations on diet, or politics, or any particular investment, other than to say, I think Bitcoin is digital capital, and it's a long-term store of value. And so, having said it, though, I'm very much in favor of digital...

• 1:09:49Speaker 03

  I would like to see digital currencies, digital tokens, digital NFTs, digital ABTs that are commercialized in an ethically sound, economically sound, technically sound fashion. I think that's reasonable.

• 1:10:02Patrick Bet-David?

  For storing purposes, Bitcoin...

• 1:10:06Patrick Bet-David?

  But how about transaction when it comes on to because the argument typically will be made for the transaction on how it is with Bitcoin?

• 1:10:12Speaker 03

  I think that there's a massive opportunity for digital currencies and that would be like stable coins, Tether, Circle. If you look at how people want to transact in the world, they all want to move digital dollars at the speed of light. And the challenge is in the US, there is no regulatory regime for a company or a bank or anyone to issue that stable coin. And I mean, there's two issues they got to resolve, like how do I back it? Presumably with treasuries. And then how much freedom do I have with regard to the transference? That's an AML KYC issue. And I think that under, you know, a red administration, you probably get a lot more freedom. But ultimately, it's above my pay grade to decide

• 1:10:55Speaker 03

  that. I would just say that right now, it's about $150 billion asset class. And it's very obvious the people have spoken. They want it. They need it. It's a humanitarian thing. If you live in Venezuela or Cuba to have or have access to digital dollars. But I think that with a digital framework for digital currency that's endorsed by the administration, I think it goes from 150 to a trillion to 2 trillion to 10 trillion. And I actually think that that would create 10 trillion dollars of demand for US sovereign debt. It would create, it would be good for the dollar. But I also think that that would ripple through to China, to Russia, to South America, to Africa. The biggest geopolitical

• 1:11:40Speaker 03

  issue is our enemies and our friends may complain because nobody wants to use any currency other than the dollar. Look, no one wants to use the euro in Europe. They want to use the dollar in Europe. So you're going to actually have all sorts of politicians complaining to the State Department that our citizens are using the dollar. But

• 1:12:29Speaker 04

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• 1:12:58Speaker 03

  If you want to spread the dollar to the world, you got to do it digitally. And I think it would be good for American values and ultimately it would be good for the world if we did support it.

• 1:13:08Patrick Bet-David?

  I want to transition to the next thing. You had a moment with Scottie Pippen, which I thought was kind of interesting. You guys are sitting next to each other, Rob, if you can play the clip. And while you're sitting next to each other, this is him. The interviewer asks him, I don't know if this is it, Rob, I sent you one that's a lot shorter than this. This is 33 minutes and 40 something seconds. There's one I sent you that is, uh, let me see, I don't know if I sent it to you or not, but there's one that's literally, here, I have it, I'll text it to you if you want to look at it. You're sitting next to Scottie Pippen. Scottie Pippen is a basketball player, used to play with Michael Jordan. And he's being asked about Satoshi.

• 1:13:50Patrick Bet-David?

  And Pippen makes claims about the fact that he's known him since the early 90s. And Michael, if there's any facial reactions that should end up being a meme or should be used for other videos, it's yours. Because, folks, I want you to focus on Michael's face. It might, you don't make a lot of facial reactions, you're typically very stoic. But in this moment, you couldn't control yourself. I want to know why. Go ahead, Rob.

• 1:14:15Speaker 05

  You mentioned you met Satoshi in Seattle in 1993. You also, he also came to you in a dream. You have a nice relationship with Satoshi.

• 1:14:25Speaker 06

  I feel like I do.

• 1:14:26Speaker 05

  Yeah.

• 1:14:26Speaker 06

  I feel like I have a story to tell. Definitely have an opportunity to meet him back in 1993.

• 1:14:34Speaker 05

  You mentioned.

• 1:14:35Patrick Bet-David?

  Now, what happened previous to that? What happened after that? Is he saying 1993? Is he confusing Satoshi with Michael Jordan? Who in 1993, Seattle? Is he thinking George Carlin as Satoshi? Shawn Kemp? 93, during the club? Who is he talking about here?

• 1:14:51Speaker 03

  Look, I like Scottie, you know? And he came over to my house and we had a nice dinner on my yacht. And we talked all about Bitcoin and it was awesome. And I have the greatest respect for him. I think that the interviewer kind of asked him an unfair question. And I was a little bit uncomfortable because us Bitcoin maximalists, we are very protective of Satoshi. And we don't, and you know, we don't like,

• 1:15:21Speaker 03

  well, we don't talk about Satoshi. Other than with reverence. So, so, yeah, I don't know. I don't have much more to say on that other than,

• 1:15:34Speaker 03

  you know, we know Satoshi came on to the world scene, Halloween 2008. And we like to have all of our commentary, starting Halloween, White Paper 2008 onward. Otherwise, I think it's, look, I think it's constructive that Scottie Pippen, one of the greatest basketball players of all time, has a relationship with Satoshi and talks about Satoshi. And it's endemic of the fact that, you know, Satoshi is the bringer of fire, Prometheus. He brought us sound money and I think that's awesome. But otherwise.

• 1:16:08Patrick Bet-David?

  Did you guys speak backstage where you're like, Scottie, who are you talking about?

• 1:16:11Speaker 03

  I'm not talking to you about my relationship with Satoshi. Satoshi is reverent.

• 1:16:15Patrick Bet-David?

  To him, to Scottie is what you're saying. Or you're saying to you is

• 1:16:19Speaker 03

  I just think Satoshi is very special, but.

• 1:16:22Patrick Bet-David?

  Did you guys have a follow up like you and Scotty?

• 1:16:24Speaker 03

  Oh yeah, he came to my, he came to my house that evening and we had a great time, a great discussion.

• 1:16:28Patrick Bet-David?

  Did you ask him like, what do you, what do you mean you met him? Did he, did he share anything with you or no, like who he, when he met him?

• 1:16:33Speaker 03

  I have, I have no other insight to offer on this subject.

• 1:16:37Patrick Bet-David?

  I got it. Well, listen, the, the, the rest of the world was curious when Scotty said that. One, I was concerned about your neck because I thought you cracked your neck when you, you, you turned the bra. I don't know if you saw that or not. It was a very quick movement you made. And then the second part, everybody, you play one more time, Rob. Again, just look at the neck reaction, folks, not anything else, but watch this, go ahead.

• 1:16:58Speaker 05

  You mentioned you met Satoshi in Seattle in 1993. He also, he also came to you in a dream.

• 1:17:05Patrick Bet-David?

  Twice.

• 1:17:06Speaker 05

  Uh, you have a nice relationship with Satoshi.

• 1:17:08Speaker 03

  It is not fair that, but Shella asked him the question and I felt a little bit surprised.

• 1:17:14Patrick Bet-David?

  Is that inappropriate to ask the question in the world? Why, why, why, why did you get a little bit uncomfortable?

• 1:17:19Speaker 03

  I think it's inappropriate.

• 1:17:21Patrick Bet-David?

  Why do you think that is?

• 1:17:21Speaker 03

  I think it's inappropriate to, it's inappropriate for a, a big, you know, it's like just inappropriate.

• 1:17:32Speaker 03

  Satoshi came onto the scene in 2008 Halloween with the white paper. Asking anybody about their relationship with Satoshi before that date is a, is an unfair, inappropriate question.

• 1:17:44Patrick Bet-David?

  It's almost as if it's.

• 1:17:47Speaker 03

  It was awkward, but that's all I have to say. I'm a big fan of Scotty, his greatest ever. I'm a big fan of Satoshi. I would, I would rather not.

• 1:17:57Patrick Bet-David?

  Well, maybe I'll say my thoughts.

• 1:17:58Speaker 03

  Be in an awkward situation.

• 1:17:59Patrick Bet-David?

  I'll say it and you don't have to say anything. I, I get the feeling like, uh, is there an element of looking at Satoshi as God, as Jesus in that space? Like, do some people look at him that way? Where it's not just this mysterious anonymous investor, inventor of Bitcoin? Or is it like, uh, you know, uh, almost like worshipped type of a character?

• 1:18:21Speaker 03

  Satoshi is a spiritual figure in the Bitcoin community. I mean Satoshi is, is equivalent to Prometheus. Prometheus gave us fire. Satoshi gave us money.

• 1:18:33Speaker 03

  Bitcoin is the first perfect money, the first perfect money in the history of the human race. I spend my copious free time reading economic history, and I've read thousands of years of economic history and tens of thousands of pages, and it's one chaotic disaster train wreck of we use seashells, we use bales of tobacco, we use silver and gold, and we clipped the coins, and we had bimetallism, and it crashed, and we had fiat currency, and we had a debt crisis, and no one ever had a money that was not defective. I mean, I can show you examples of monetary crashes every 30 years for the past 3,000 years in every single culture.

• 1:19:15Speaker 03

  And Satoshi comes along for the first time and says, "Oh yeah, here's money, it's not broken." And it's so profound, it's like, you look at this water, you know, you sit down at a table, and the poor person thinks, "Oh, I gotta drink water." And the rich person wants to drink a thousand-dollar bottle of champagne or wine or something. But for 100,000 years, humans didn't have clean water. And if you read the history of civilization, people are dying in their 30s and 40s and 20s because the water's dirty, because they're getting infected. If you were Henry VIII, you didn't have clean water. The reason they all had gout is they had to drink wine with alcohol in it, and they

• 1:20:00Speaker 03

  ended up with degradation of their limbs because they didn't have clean water. So, we only have clean water, clean water, clean air, clean food that doesn't kill us. We only have it for the past 100 years. We had dirty money from 3 million B.C. all the way up to January 3rd, 2009.

• 1:20:23Speaker 03

  We have dirty money and there's one guy that actually finally gives us clean money, non-toxic, it does not kill us. So is it spiritual? Yeah, it's spiritual. It's like, what happens when I inject poison and toxic into the veins of my kids? They're dying. It's like forcible chemotherapy to a 12-year-old athlete, you know? That's the problem. All these companies have a useful life expectancy of 10 to 15 years. You know why? Because the capital is toxic, because the money that they capitalize on is toxic, is sucking the life out of them. Satoshi comes along and he gives you non-toxic money.

• 1:21:01Speaker 03

  And who else did it before him? Nobody. Nobody. So, so you gotta actually hold with reverence the person that actually gave the human race the first clean perfected money. And you look after that point, you're like, oh man, like, we're not dying anymore. Infant mortality rate's 40% before clean water. It's like, four out of 10 of your kids are gonna drop dead and I give you clean water and I say, this is, take this, it won't kill them. And you're like, what? So the point is, it's a pretty profound paradigm shift. And it's very, for those of us who are maximalist, that actually believe Bitcoin is an ethical

• 1:21:44Speaker 03

  imperative, it's an instrument of economic empowerment, we're just very protective of Satoshi. We don't like, we don't like when anybody pokes it. Satoshi, right?

• 1:21:57Patrick Bet-David?

  You have five kids?

• 1:21:58Speaker 03

  No, I do not have five.

• 1:21:59Patrick Bet-David?

  Do you have, do you have a family?

• 1:22:00Speaker 03

  I don't have any children.

• 1:22:01Patrick Bet-David?

  You don't have any children?

• 1:22:02Speaker 03

  No.

• 1:22:02Patrick Bet-David?

  Okay, got it. Interesting. Yeah, I wonder, I wonder like your, your level of conviction. It was very interesting, your reaction to that clip with Scotty, because it, it changed in a very interesting way while I'm sitting here talking to you. And I appreciate you sharing that with me because, you know, I didn't know you viewed it that way.

• 1:22:27Patrick Bet-David?

  Is that pretty common in this space? Is that pretty common in folks in Bitcoin who are influencers like yourself that they have a similar feeling?

• 1:22:35Speaker 03

  The maximalist, yeah.

• 1:22:36Patrick Bet-David?

  The maximalist.

• 1:22:37Speaker 03

  Yeah, like I said, it's like 10 hours and you're a trader, 100 hours you're an investor, 1,000 hours you're a maximalist. You think it's an instrument of economic empowerment. It's an ethical imperative for 8 billion people. So like, for example, you think the world's better with electricity?

• 1:22:54Patrick Bet-David?

  Sure.

• 1:22:55Speaker 03

  What if I took your family, I took away electricity, clean water, clean air, clean food, you know, and metal? Yeah, do you feel like you've been ripped back to the Stone Age? Like, maybe Stone Age, yeah, would you be angry about it? So what if I turn around, now what if I said the opposite? Which is, I don't think you should have those things. What if I said, I don't think you should have clean air, clean food, or steel, or glass? What if I, or internal combustion engine, I'm gonna take away your car. Would you not be a little bit angry at me? A little bit irritated? A little bit irked? I'm gonna pass a law taking away your rights to electricity and glass and airplanes, right, from your family and all your friends? And you're like, what the heck are you talking about?

• 1:23:39Speaker 03

  Okay, that's how we feel about Bitcoin. When we, that's how we feel about money, or in this case about digital money, perfected digital money. We're like, you're gonna take that away from people? Or if you said to me, if I said, you know, I got this idea for your kids, we're gonna give them clean food and clean water in their first five years. And then another friend of mine says, not really important, you don't need that. It's like, we're just gonna give you half, like, you know, swamp water, and we're gonna have them eat mud, and that's okay too. We're gonna diversify. You know, and I'm like, don't feed your kids mud, and don't give them swamp water. And by the way, they're gonna, you know, and here's antibiotics.

• 1:24:23Speaker 03

  You don't need antibiotics, you know, they're gonna die without the antibiotics. Like, no, it's not a big deal. The point is, yeah, we get worked up about it because we see it's like critical technology, and you're not gonna move the human race forward in the next millennium. Without electricity, without digital energy, right? Bitcoin is digital energy, just like you had electrical energy, just like you had. It's just like, you know, if we took away crude oil right now, 95% of the people on Earth would starve to death or freeze to death. The world comes to a grinding halt. So when people actually attack oil, or they attack nuclear power, they attack electricity, you think like, you just must hate humanity. And when you attack Bitcoin, you're attacking digital energy, right?

• 1:25:08Speaker 03

  And you must just hate humanity.

• 1:25:10Patrick Bet-David?

  So where are you going with this? Are you going to Gary Gensler? Is that who you're going to? Like, individuals that are getting in the way? Is that, is that like, when you said, if you think, like, who do you think you are to prevent us from having access to all this stuff? Who's doing that? Individuals like Gary are getting in the way?

• 1:25:24Speaker 03

  I think, I think it's the just tradition. There's two, there's traditionalist that just are clinging to the 20th century. And then I think, you know, there are, there are just people that are distracted, or can, you know, close-minded, anti-technology, or, actually, there's another group. The traditionalists, they want to cling to the 20th century's systems. Like, this is the way the stock market works. This is the way.

• 1:25:53Patrick Bet-David?

  You put Buffett in that category.

• 1:25:54Speaker 03

  Buffett's in that category. Charlie Munger's in that. They just grew up in that, so.

• 1:25:58Patrick Bet-David?

  Sure. Nothing wrong with that. That's just the way they've been, right?

• 1:26:00Speaker 03

  And there's another set of collectivists or authoritarians that just don't want you to have freedom.

• 1:26:05Patrick Bet-David?

  Is that a Gary Gensler type?

• 1:26:06Speaker 03

  I wouldn't characterize what, I would say probably Gensler falls more in the camp of an enthusiastic traditionalist. Like, he, he has a reverence for the 33 Act, and the 40 Act, and what Franklin Delano Roosevelt did, and the way the capital markets work. So, you know, like, it's okay for the stock market to trade 930 to 4, okay?

• 1:26:31Speaker 03

  There's another view, which is, why can't I actually trade 24/7/3/65? That's a great question. And why can't I give, why can't I trade Apple stock on my iPhone and take self custody of it and send it to a dude in China on Saturday afternoon? Right? Why can't? There's nothing unethical about it. It's the future. But I, yeah, but I think there's right, there's three dimensions of this. Do I want to do business the 20th century way? Like where NASDAQ is the only place my stock trades and it trades 9:30 to 4:00, but not on banker holidays? That's, that's the traditional view. Then you've got the, the anti-technical view, that no innovation. It's like, I can now issue a token in four hours for 40 bucks.

• 1:27:15Speaker 03

  Or you can go public on NASDAQ for 40 million dollars in four years. And the Gen Z people are like, well, why can't I just do something a million times faster, cheaper for four bucks in four hours? Why do I need 40 million dollars of lawyers in four years? Right? And so that's kind of the innovation. And some people get that technology, they're pro-tech and some aren't. And then I think you've got the authoritarians, you know, you've got the, the Chinese being the example of, we want to give you money, but we want to be able to expire the money in 90 days if you're not a good citizen. Right. And so I, I think there are forces that are of control. They don't want freedom. And in the United States, we're like, we go back and forth, we're like, we want you to have freedom, but we don't, we have, you know. Too much.

• 1:28:00Speaker 03

  Like, we don't want you to, like, I can't carry 20,000 dollars to an airport right now, even though we're the land of the free. So, so there, there's this love-hate relationship with freedom everywhere in the world, you know, that goes on. And then there's a love-hate relationship with technology. And then you've got the systems that work, right? Visa and MasterCard and NASDAQ and New York Stock Exchange and DTC and custodians. You've got the systems that worked from the 20th century. And if you're wanting to protect those systems, I understand why, because you're worried about burning 100 trillion dollars to the ground. And then you've got things you can do that are new, like I can move the money a million times a second for a thousandth of a penny.

• 1:28:45Speaker 03

  And, and what if I want eight billion AIs to move it a billion times a second through 10 billion computers? And that scares some people, but that's the future. And so I would say... There's, I give everybody a benefit of the doubt. Some people are just not progressive because they want to protect the past. Some people just don't understand the promise of the future. But there are some authoritarians that just generally don't want you to have freedom.

• 1:29:12Patrick Bet-David?

  I mean, I remember this clip here with Trump, right? At the Bitcoin conference, when he made that comment. And Rob, if you want to play this clip.

• 1:29:20Speaker 03

  On day one, I will fire Gary Gensler and appoint a new SEC chairman.

• 1:29:27Speaker 00

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• 1:30:35Patrick Bet-David?

  He did it twice.

• 1:30:36Speaker 03

  I didn't know he was that unpopular.

• 1:30:44Patrick Bet-David?

  Why is he so unpopular amongst specifically this community?

• 1:30:49Speaker 03

  You know, I think what you've got is a struggle between the 20th century and the 21st century.

• 1:30:57Speaker 03

  I think Gensler's view is the rules we have and the laws we have are adequate and they're good enough and you should conform to them. And I think the crypto community and the Bitcoin community think, "Why can't I do everything a million times smarter, faster, stronger from my iPhone on Saturday night? Why can't I? I want to do new things. Why can't 10 million influen... If you're 10,000 influencers, you got a million followers, why can't all 10,000 of them issue their own token and have their own access to the capital markets? And why do I gotta actually take four years and $40 million to do it if it's only worth $4 million to me?" There's this tension.

• 1:31:42Speaker 03

  And the two sides have talked past each other. If Gensler had put forth a digital assets framework, and he had said, "Okay, look, here's how you ethically issue a token. Here's how you ethically issue a security. Here's how you ethically prove you're a commodity. Here's how you ethically prove that you're a currency. And by the way, don't lie, cheat and steal." If he had done that and given people a route to register, I think 95% of the industry would have come into compliance because no one in the industry is standing up arguing we want to lie, cheat and steal. But in fact, there was no framework, there was no process to do it.

• 1:32:23Speaker 03

  And on the other hand, I think the industry wasn't able to generate the support through Congress or the Senate. And I think the administration wasn't very constructive. So I would say there's been a non-constructive dialogue. The people in the crypto industry, their position has been, "Well, you don't respect us, so we don't respect you." Right? And the entire relationship broke down to kind of mutual yelling back and forth. But the right question for the crypto industry to ask is... Why is it unethical for Katy Perry to issue Katy Perry token to a million people if she has no intention of lying, cheating, and stealing? Why is that unethical?

• 1:33:08Speaker 03

  Why can't Joe Rogan, you know, raise capital from the general public in an honest way, cheaper? Why does he have to spend infinite money to do it? And then why can't I trade Apple stock on an iPhone on Saturday? What's unethical about that? And if I take you at face value, you know, the SEC says just register, but if I did register, it's illegal to trade on Saturday. And so the point is, MicroStrategy's registered, you can't trade MicroStrategy stock on Sunday. Binance once listed our stock on the Binance Exchange, the German regulators made them shut it down, right? And so, what we really need is, we need to elevate the conversation to constructive,

• 1:33:53Speaker 03

  cheerful, progressive. How are we actually going to make things a million times cheaper, faster, better, more efficient? And the dialogue devolved, it started kind of optimistic in 2021, and then it devolved to two sides, you know, kind of screaming at each other, and it became a deadlock and very non-constructive.

• 1:34:14Patrick Bet-David?

  Did you see this exchange?

• 1:34:16Speaker 03

  Oh yeah, I have seen it.

• 1:34:18Patrick Bet-David?

  Play this clip, Rob, for the audience to see. Go ahead.

• 1:34:21Speaker 03

  The SEC broke the law, your attorneys lied to the court, and no one in your leadership here in DC has been held accountable. At Trax. Seems like business as usual here in Washington. Okay, switching gears very quickly. It's been recently reported that Vice President Harris has finally said she'd craft clear rules of the road for the digital asset space if she becomes president. Is this your approach too, sir? Or do you think she's rebuking you because she doesn't think you've done a good enough job establishing these clear rules over the last three years of her administration? I think that there's laws in place. If Congress wishes to change them, they'll change them, but we are enforcing the laws, and there are many people in this field that are not following the laws.

• 1:35:06Speaker 03

  Reclaiming my time. Well, it's very interesting. That you view your performance that way. Because we have a litany of court cases, extraordinary confusion in the marketplace, and millions of Americans pining for clarity from you. You've abused the agency's enforcement tools, and you've even baited companies eager to comply with you, only to hit them with enforcement actions. You've retaliated against businesses and people who have come before this committee to talk about the next generation of American finance. And perhaps, somehow, worst of all, you've made up the term "crypto asset security." This term is nowhere to be found in statute. You made it up. You never provided any interpretive guidance

• 1:35:50Speaker 03

  on how crypto asset security might be defined within the walls of your SEC. Yet, you made the broad proclamation that you believe a majority of tokens are crypto asset securities. You did this. And you deliberately used this made-up term as the basis for your entire enforcement crusade over the past three years, only for your lawyers to retract it in a footnote to a court just last week. Your inconsistencies on this issue, sir, have set this country back. We could not have had a more historically destructive or lawless chairman of the SEC. And I yield back.

• 1:36:28Patrick Bet-David?

  Do you agree with them?

• 1:36:31Speaker 03

  I would say the Democratic administration has not been constructive or constructive in providing any kind of digital assets framework over the last four years that would allow the industry to grow. And I think what Emmer is saying is, we need clarity, but what they need is, they need a constructive way to do business. I think that Gensler is a traditionalist, and I think that if you add his traditionalist with Elizabeth Warren's negativity, I mean, she has been non-constructive completely across a variety of things, that has dominated the administration's political views.

• 1:37:15Speaker 03

  Look, I read the history of money and banking in America. It's Rothbard's book. And Rothbard is one of the great libertarian Austrian economists. And he notes in 1930s, the 33 SEC Act, it was actually an act put forth in order to restrain the capital markets and lock out entrepreneurs from being able to raise money and create a cartel. This is in 1933, so on one hand, the administration and Gensler have been very glowing in their reverence for the 33 Act. But the bigger issues that no one is addressing in these debates, that hasn't been addressed by either side is, why doesn't it cost $40,000 to issue a token?

• 1:37:59Speaker 03

  Or 44,000? How do you actually provide access to the capital markets to 40 million businesses instead of 4,000? I mean, the elephant in the room right now is that American public companies are dying. We had 10,000 public companies in the US 25 years ago. We got 4,000 now. So, the fact is, we have a choking, onerous regulatory regime, which makes it so obscenely risky, difficult, and expensive to engage in the capital markets. Nobody can afford to do it. And if you choose to do it, it's illegal to do every cool, interesting thing that we can now do. And so, the person that's in the best position to offer that framework would be the head

• 1:38:43Speaker 03

  of the SEC, and Gensler has refused. And you've heard him, he says right there, he doesn't think it's his responsibility. He put it back on Congress. But I think that there was a dysfunctional relationship between the Republicans and the Democrats for the past four years, and there's not really any constructive dialogue to create that digital assets framework.

• 1:39:05Patrick Bet-David?

  Yeah.

• 1:39:06Speaker 03

  And that's been holding us back.

• 1:39:07Patrick Bet-David?

  Yeah, and Mark Cuban was interested in that job. If you remember, he wanted to be the head of SEC. He made that clear, that that's what he wanted, in one of the interviews. I remember when I took my Series 7 back in 01, and this lady from Kaplan, I think it was Kaplan, could have been Dearborn, it's probably, no, it's Dearborn. Dearborn, I don't know if you remember him, when Dearborn studies or manuals he would take. The lady taught, told the stories about SEC, and she said, you know, the first person that was the chairman of SEC was Joseph Kennedy. I'm like, oh, okay, interesting. So you're like, Joseph Kennedy? Yeah, Joseph Kennedy. Do you know why we did fingerprinting? Why, you know, once he asked everybody, if you want to sell stocks, you got to come to New York to get, you know, registered and all this stuff. Nobody showed up. He says, you know what? You can't sell moving forward if you don't do fingerprinting. And you got to come to New York. That's the story she's telling us. Till today, we did fingerprinting because you were controlling money.

• 1:39:51Patrick Bet-David?

  What the hell are we doing fingerprinting for today? For getting job applications or applications to fill out the client account form? It's a very outdated system, the SEC is. And it'll be interesting to see who, what Trump's going to do with this. He said day one firing. It'll be, again, we have a few days till day one. I'm curious to know who he replaces with.

• 1:40:12Speaker 03

  I think it's constructive to note that my company came public in 1998. And in 1998, our stock could trade on NASDAQ from 9:30 in the morning till 4:00 in the afternoon with bankers' hours and not on holidays. And in the 26 years that have followed, there's not been a single functional upgrade. Like, there's not one innovation. Like, you would think after 26 years of infinite money that we would figure out how to trade the stock on Saturday at 4:00 p.m. No, right? So what you have is you have a 20th century, what I'll call antiquated oligopoly that's reinforced by a regulatory regime where, I'll give you another example. You have, you own a bunch of Apple stock. You don't really own it. You can't take custody.

• 1:40:57Speaker 03

  It's like your bank, you know, JP Morgan or Morgan Stanley has it. They might lend it out, but you can't just take custody. I mean, and so the idea of self custody, the idea of freedom, the idea of an open competitive, what if, you know, someone in Singapore offered you 3% yield on your Apple stock? How do I pull it out of the bank, send it to them? Oh, there's like one monopoly network that moves the stock around. So we have a system which made sense in the 20th century, maybe. But the point with Rothbard is it was always about restraint of trade. It was to create a cartel and to centralize power, centralize access to the capital markets to just a small set of big companies.

• 1:41:42Speaker 03

  They were locking out the entrepreneurial bankers and the entrepreneurs in 1933. It's just been turning of the screws to make it harder and harder. And the elephant in the room is, if there's 400 million companies in the world, how come there's only 40,000 publicly traded ones?

• 1:42:03Speaker 03

  And when you're publicly traded, how come you're not publicly traded on Saturday night? What's unethical? What's unethical about wanting to take custody of my own property?

• 1:42:12Patrick Bet-David?

  I think that's coming. I mean, think about what happened with New York Stock Exchange and, and, you know, NASDAQ, and you're looking at what Texas Stock Exchange is doing. We're not going to go by the DEI and all the ESG bullshit that you guys are doing. Here's how it works. Come on in. It's all about profits, growing the business, et cetera, et cetera. Obviously, we'll see what's going to happen with it. I think disruption's coming. They no longer have a choice. They can try to play as many games as they want to. But Rob, I want to play a couple of other clips and then we'll wrap up at 3:50. We'll finish up in five minutes. Here's a clip on when it was Bitcoin a few years ago. And remember, young guys watch stuff all the time. Here's Dan Pena, who amongst the young, he's gone viral many times. Here's what he said about Bitcoin one time. Rob, if you want to play this.

• 1:42:52Speaker 03

  I know who's behind Bitcoin, and it ain't some fucking Japanese guy in a cave. I know the guy. And when that comes out, you heard it here first, Bitcoin is going to zero. Zero. And I know who's behind Bitcoin. This is why we're protective of Satoshi, because people say this stuff in order to attack the network. And it's like, it's like me saying, you know, I know who founded, you know, your religion. And as soon as I let it out to the general public, people will realize you're living a lie. You know, so like, it's just, it's...

• 1:43:30Patrick Bet-David?

  But the point is, the great thing about today's market is, everybody can talk. Someone's going to be right, someone's going to be wrong. And when it's wrong, it's public to everybody. We've all had it before. I mean, it's happened to me, it's happened to you, it's happened to all of us, right? But when you get it at a public level like this, saying you know exactly what's going to happen to it, and then a market sees it, I don't know what happens, what the market's reaction to. By the way, last thing before we wrap up, I like Michael Burry. Have you ever had any? What are your thoughts on Michael Burry? I think he had a position on Bitcoin at one point, and he said he recommended to sell. I shouldn't have said that. Do you follow what Michael Burry says with Bitcoin?

• 1:44:06Speaker 03

  I guess Michael Burry would be at my trader level. He's a trader. He's, I don't, he's not a Bitcoin investor or Bitcoin maximus for sure. He's a guy probably that sometimes he thinks he should buy it, sometimes he thinks he should sell it. But I don't have any other opinion on him.

• 1:44:22Patrick Bet-David?

  Okay. Well, Michael, it's great to have you on again. Every time we come, I get smarter, I get better and people buy more Bitcoin. So appreciate you for doing your, as you say it, public service.

• 1:44:32Speaker 03

  Thank you for having me.

• 1:44:33Patrick Bet-David?

  Anytime. Take care, everybody. Bye bye, bye bye.

• 1:44:41Patrick Bet-David?

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