Bitcoin, The Red Wave, and The Crypto Renaissance - Michael Saylor Speaks at Cantor Fitzgerald.

So the audience has grown, uh, certainly not for me. Uh, just wanted to again thank everybody for being here. Uh, excited, uh, to continue this, uh, this event, uh, during a very interesting time in the markets. Um, obviously see a lot of people been glued to their phones over the last two hours with the volatility going on. Um, the gentleman that I'm going to introduce needs no introduction, obviously. He's been at the, uh, forefront of crypto, though, uh, doing something quite frankly that's unprecedented, uh, using the company's, uh, balance sheet to continue to purchase, uh, Bitcoin in the open market. He's had a very strong view. I've had the pleasure of listening to that view at a couple different occasions. Uh, chairman of MicroStrategy, uh, a legend in the space, uh, and really a savant in terms of thinking about the world in a different way. So, with great pleasure, Michael Saylor.

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Thank you. Um, I titled a presentation, "Bitcoin, uh, the Red Wave and the Crypto Renaissance." So today, you're going to hear me talk about a few things you might have heard before, but they're, they're now, uh, refreshed. And then you're going to hear me speak about a few things I've never spoken about before, which I think will be interesting to the group. But I'll start with the problem that we all know. Um, the economic problem is that very few asset classes outperform monetary inflation. If you're trying to beat the cost of capital, the S&P index, it's very, very challenging to do it. And everybody in the world's looking for a solution to this problem. The companies don't have a solution. If the company can't grow 15% a year or more, institutional investors lose interest, liquidity, and the stock dries up. There is no options market. And companies are required by, uh, by normal treasury rules, uh, to use U.S. Treasuries as a capital asset. And if a company's sitting on top of treasury bills, they're losing 10% of their capital a year. They're underperforming the cost of capital by 10%. A hundred billion dollars of capital is going to cost your shareholders $10 billion a year. So companies are in essence type one diabetics. Every company with a treasury strategy is a diabetic. You're less, you're in essence bleeding capital off your balance sheet. And of course, intelligent CEOs or CFOs understand that. So they solution, of course, is just give away all the money. Like we give away the capital, we buy the stock back and we lever up 144 to 1, or I dividend it out. But the, the solution of my wealth is toxic. So I'm going to give it all away, is in my opinion, not a recipe for living happily ever after. And that's what we do to most operating companies.

There is a political problem. The political problem is how do we grow the economy of the United States? How do we deliver prosperity to our people? And how do we overcome a deficit? And all that while maintaining global leadership? So everyone, every institution, every investor, every company, every politician struggling with these problems today. Bitcoin's the solution. Why is it the solution? Is it the solution? A lot of people are wondering that. Well, I'll put the Bitcoin return for the last four years on this chart. I just showed you. And you can see Bitcoin is just punching a hole in all the traditional capital markets. This isn't one year or two years, this is four years. But, you know, it happens to be the four years since MicroStrategy decided Bitcoin was the solution. And you might say, well, you cherry-picked that number. That's the low number. I cherry-picked that number because the other numbers are better. And I'll show you that in a second. If we look at this entire set of asset classes, they line up kind of elegantly. If you're actually holding bonds for the last four years, you lost 5% of your capital a year. They're losers. Every bank in the U.S. is capitalized on bonds. Every operating company is capitalized on bonds. You wonder why the banks are sick. You wonder why the operating companies are sick. They're sitting on those minus 5% instruments. And that's their best idea. Gold's plus 6%. You might as well just hold gold. Real estate's plus 10%. The S&P is 15%. You can double it with the Magnificent 7, find the best companies in the S&P, the Nvidias, the Apples, the Googles, 29%. And this little creature we call Bitcoin is doubling that, 60%. And when you look at that, a lot of things become pretty clear. But this is the past 14 years. Bitcoin's not just winning. I mean, it's up 78% in 8 years. It's up 103% in 12 years. It's up 168% in 14 years. It's consistently winning. And at some point, if you look at the numbers, you start to wonder, well, why is it winning? And is this a fluke? And the irony, of course, is that you still get questions from the normies every day like, well, when does the run stop? It's like, like, when do nuclear reactors stop producing more electricity than water wheels? You know, when does the airplane stop flying faster than the donkey cart? The answer is, it's not going to stop because it's structural and technical. Everyone in the world is searching for an asset uncorrelated to the S&P 500 with higher returns, uncorrelated and performing. It's the Holy Grail. Banks have conferences on this stuff. Well, Bitcoin is that asset. It's an asset without the counterparty risk that comes from competitors, countries, corporations, creditors, cultures, or currencies. Everything else you own in your life has a counterparty risk to one of those items, except Bitcoin. Bitcoin is in essence orthogonal to the rest of the market. That makes it alpha. But you don't have to believe it from first principles. You don't have to study it. You can just look at the data. This is Fidelity data. It's showing the lack of correlation and the sharp ratio. It's got the highest sharp ratio. It's got the lowest correlation. So even if you haven't read the book, "The Bitcoin Standard," even if you haven't thought about it for 100 hours or a thousand hours or 10 hours, all you have to do is just run the numbers. Uh, the market is screaming at you that it's an uncorrelated, high-performing asset.

But to truly understand it, you have to go back to first principles. And this is my alma mater, MIT. And this is where I was taught to think from first principles. And they taught you how to build things that had never been built before and solve problems that had never been solved before. And it was an epiphany that you're actually expected and capable of solving problems no human being on the face of the earth has ever solved before. I mean, Elon Musk keeps pointing this out and proving it, and that's why he's the richest man in the world. The capital markets are full of people doing the same thing over and over again, the same way, because convention says to do it the same way. I'm suggesting you apply basic physics and engineering to capital markets and see if you can solve the problem in a new way.

This is the wealth in the world. It's distributed across real estate and bonds and equity. And the little block in the lower left corner is Bitcoin at $1.8 trillion. When, uh, incidentally, when MicroStrategy got into this, Bitcoin was $100 billion. So we have 10x. And, um, and that's just in four years. But, uh, here's another way to see that chart. And this is the most profound insight of the day I'm going to give you. That I think the majority of rich people and the majority of corporations and the majority of money managers still don't get this one idea, which is half of the wealth in the world is invested in assets in in search of a long-term store of value. People just want to engage in long-term capital preservation. Another way to say it is, I just want to stay rich. I want to keep my money. There's no one you'll meet that doesn't want to keep their money. Right? There's no government, there's no corporation, there's no wealthy person, there's no poor person. Nobody wants to lose their money. So the circle on the right is $450 trillion dollar blob of long-term capital. Right? Next time you hear something someone say, well, what's the Bitcoin use case? There's no use case. The use case is the most valuable thing in the entire human race. It's $450 trillion. It's all the capital in the world. The use case is you get to keep your money. Right? That's actually the epiphany. Once you understand that, people are using assets for two reasons: long-term capital preservation, or the second reason is utility. Your yacht, your jet, your bakery, your farm, your ranch, your plane company, that's utility value. Your piece of art you put on the wall, it's utility. Half the stuff is for utility. The other half is capital preservation. And, uh, the challenge with preserving capital is you either do it with financial assets, and they degrade over time due to entropy. Everything you invest in is subject to weather and war and tax and inheritance and income and excise. And these are the risk factors in every 10K. They degrade the capital. And so people that want to get away from financial assets, they buy land, and they buy buildings, and they buy physical items. But entropy, uh, degrades them too. There's a hurricane coming, you know, in Florida right now. It's going to hit in the next few days. You can't buy hurricane insurance. You're just living with this chaos in the real world. And of course, I could talk about the litany of ways that your physical capital breaks down, but you all know it. What's the cost of entropy? What's the cost of chaos, confusion, and competition? Inflation, politics, and war? Well, the cost is like 3% of $450 trillion. The cost is $105 trillion a year. It's trillions of dollars a year. Someone says, well, what's the use case of Bitcoin? It's like, well, it's not to, we're not going to lose $10 trillion a year. Like, you get to keep the $10 trillion, right? That's what's driving people to Bitcoin.

When you live in a world without Bitcoin, and you live in a world of capital assets that are physical and financial, you see your useful life is 10, 20, 30 years. If you buy a Ferrari or a yacht, you're probably not going to preserve your capital. But most people buy 10, 20, 30 year useful life assets, and they struggle and worry about them. How many people worry about their stocks every day? Worry about their building? Worry about their business? Worry about currencies? Worry about bonds? There's an entire industry of worry. That's a constant struggle. This guy, Satoshi, came along and discovered a method to transfer value without a trusted intermediary. And everybody repeats it ad infinitum. Satoshi figured out how to send something of value between two people without an intermediary. But that wasn't the brilliant idea. The idea that's so profound it shakes the foundation of the economy is that Satoshi figured out a method to store value without a trusted intermediary. Because sending the value, it's like a little bit better than Visa or the Fed wire. Storing the value, well, that makes it the most useful thing for $450 trillion of capital that's worth $10 trillion a year. That's the big idea. And it's a very poorly understood idea. Bitcoin represents the transformation of our capital from financial and physical assets to digital. What we've created is an asset without financial risk that's in a currency or stock, and without physical risk that's in real estate or property. And that makes it digital capital, not digital currency. Digital capital. Everyone that's a hater, everyone that's a skeptic, like, oh, it's a digital currency, it won't work. Well, that's because you decided to define it as the wrong thing. Yes, it's not a currency, right? It's capital. Once you understand it as capital, you realize that you ought to compare it to a $100 million building in Miami. And think about the benefits of building, of owning a building versus owning a digital building. What if I could own a building that had no tax, no traffic, no tenants, no torch, no trouble, no weather, no corrosion? And, uh, what if it was an invisible, indestructible, immortal, teleport building? Well, I mean, may I think I'd rather have it than the $100 million building in New York. But I'm sure I'd rather have it than the $100 million building in Moscow. Digital capital is global capital. And, uh, and that means that if I gave you $100 million and I put you in Africa, or I put you in Russia, or I put you in China, and I said, buy $100 million worth of stuff, keep it for 30 years, or buy $100 million of Bitcoin. There's no doubt you'd rather have the $100 million in Bitcoin. There's not a single thing you want to own in Africa that's better than Bitcoin. And when people start to think of it that way, you realize that this is the solution to global capital. And it's inevitable that all the capital in the world is going to flow into this network. Because whereas you might think New York is good, and Miami is good, no one's arguing that any random city in Nairobi is better than New York or better than Miami, right? It's just not a question. So when you put that on my map here, you see Bitcoin solves a problem. It's the thousand-year asset, right? What if you just wanted to be, uh, wealthy forever? Well, I mean, like, there's an entire industry that's wrapped around, wrapped up in that idea of how do I keep my money? Bitcoin is this digital capital that has a useful life not of 30 years, but maybe 30,000 years. And that's the profound idea. It's stretching your time horizon to a different place. And what backs it? It's not backed by anything. People say that it's not backed by anything. It's backed by power. The same thing that backs everything in the world, raw power. A lot of it is backed by digital power, political power, economic power. 733 exahashes is more power than Amazon or Apple or Google could muster, or or or Microsoft could muster to attack the network right now, or any nation state. It is the most digital power. 18 gigawatts is 18 full-on nuclear reactors. It's more than the United States Navy runs on $850 billion of real capital. People have taken $850 billion of real money, deposited in the bank that we call Bitcoin. You think those people aren't going to fight to defend the $850 billion? There's a lot of economic power. 420 million crypto advocates. You just saw the impact on the on the election on Tuesday night. 220 million holders. It's the most powerful crypto network in the world. It's 99% of the power in the crypto network. It is the dominant one. It's 100x more powerful than the next best one. That's why I say there isn't the second best, because this is all the power. Another way to say it: all the smart money in the world asks the question, how do I store my money in cyberspace and not lose it? And they kick the tires on 10,000 crypto networks and a thousand other ideas and 100,000 other investment ideas. And if they like the idea of, put your money in cyberspace in a crypto network, they pick Bitcoin. It's the winner, right? If you're the smart money, you go to where the smart network is. If there's a bank with $100 billion in it in your town, and another guy opens up, Dude's Bank, with $10, you don't say the bank with the $100 billion is overvalued and Dude's Bank is the best investment. You put your money in the bank with all the rich people. It's just a smart thing to do. They have all the power. Bitcoin is emerging as the dominant digital monetary network. Now, when I, I use the word emerging, not because it isn't, it already is. I just use the word emerging because 95% of the people with the money in the world don't understand that there's a digital monetary network yet. When they understand that the class exists, they'll realize the Bitcoin is the winner. Once they realize it exists, it's like, I said, it's like, it's like Facebook for money. Except when Rupert Murdoch shows up to Bitcoin, he'll bring billions and billions of dollars. He won't just bring 27 friends and a few party invitations. 12 out of the top 20 ETFs launch in 2024 are related to Bitcoin in some way. It's, it's obviously eating the ETF market. It's now the seventh largest asset by market cap, seventh. And it's the most widely recognized, widely held, compelling investment asset in the world, right? What's above it? Alpha, beta, Amazon, Microsoft, Apple, Nvidia. They're all securities in the U.S. There's no way that a Chinese or a Russian company is going to capitalize on those things. Gold, the best idea in the 19th century, dead money, right? So what do I expect? I think we actually chew through, you know, one through six sometime soon. Spot ETFs have $90 billion of AUM. BlackRock's ETF for Bitcoin is actually outstripped their gold ETF in less than a year. Gold's been around for 5,000 years. Bitcoin's crawling into all the bond markets. Look at the yields. You can have 64% from Bitcoin, or you could have 2%, 3%, 4%, or 5% for the bonds. You know, Bitcoin is going to take the, take a place in the 60/40 portfolio. Right now, people talk about 1 to 3% allocation. That's going to move to 10 to 20% an allocation as soon as people get their hands around this. I don't, I don't think it'll take very long. Larry Fink has become the most prominent advocate of Bitcoin. This is M1, CNBC. No, I, I know you have been a leader, not play this because willing to embrace crypto, you because you can look it up. But I want to stay on schedule. Lots of entities buying Bitcoin now. Two and a half million Bitcoin held by ETFs, countries, private companies, public companies. What's driving Bitcoin? Institutions are driving Bitcoin. Thousands. The ETFs have actually purchased $5 billion in the last six days. The last six days, there's only $40 million of Bitcoin available for sale by natural sellers every day. The, a lot of companies are buying Bitcoin. Governments are buying Bitcoin.

Here's the 21-year Bitcoin outlook. Okay? You can, you can Google this. Bitcoin 2024. You'll find it on GitHub. Download the model. Put in all your own forecast assumptions about inflation, innovation, and the like. I'm going to show you mine. Back to to our map of assets. I'm looking out over the next 21 years. What's going to happen? Well, I assume technology is going to continue to advance. We're going to harness AI. There's going to be a lot of incredibly valuable companies. Bitcoin's going to grow rapidly. Gold's going to be gradually demonetized. Equity is going to grow a bit faster. Real estate, about the historic average. Basically, the money supply is going to expand about 7% a year. Some assets are going to stay on that glide slope. Some will slightly outperform it, uh, like equity, like Bitcoin. Some will slightly underperform it. That gets us to this forecast, which I presented in July of 2024. Bitcoin grows in a base, in my base case, 29% ARR up to $13 million a coin. I think it grows faster in the first four or five years. It's growing 50, 50 to 60%. It's going to decelerate from 60% at some point down toward two times the S&P index. But you can see every Bitcoin you don't buy today is going to cost you $13 million. A lot of people think, well, you know, the world's going to turn upside down. Uh, no, it's not. The world is not going to turn upside down in 21 years. The world's going to look pretty much the same as it looks right now. They'll be a lot of real estate, a lot of bonds, a lot of currency, a lot of equity. There'll be a ton of trillion-dollar companies. There'll be $100 billion dollar companies. The only difference is if you didn't buy Bitcoin, you won't have made that money, right? There'll be a whole class of people that use Bitcoin as a capital asset. And the big winners should be Bitcoin and equity. Is, you know, AI makes all the cars drive themselves. And someone produces a billion robots, and they get, and the robots make the robots. If the robots make the robots, then presumably the company that owns the robots that make the robots is going to make a lot of money, right? So the, I mean, it's going to be a good, a good future for high tech, for the people that can harness that.

Uh, okay. MicroStrategy. What are we? Um, we're the first and largest Bitcoin treasury company. What does that mean? It means we basically buy and hold Bitcoin exclusively. And we focus upon issuing innovative fixed income instruments to create intelligent leverage to give our equity holders performance that's better than Bitcoin in a very precise, consistent way. Just buy Bitcoin, raise money to buy Bitcoin, rinse and repeat. What happens if you have such a monotonic, simple idea and have laser focus on it? Well, every green dot is a purchase of Bitcoin by MicroStrategy. We buy the lows, we buy the highs, we buy the middle, we buy, we buy. We don't sell. You know, at some point, people are making fun of us for having lost a billion or two billion on this trade. We're up $135 billion right now. I think we made three and a half or four billion in the past five days. The point is leverage, right? Like once you get the right asset position, Bitcoin's going to have $220,000 up days. You're just going to want to own it. You're never going to want to not own it. So this is what happens if you, what if you lever Bitcoin? What's better than Bitcoin? The only thing better than Bitcoin is more Bitcoin. Okay? And then, and then the question is, did I pay 14% interest to get the more Bitcoin? 7% interest to get the more Bitcoin? Or did I pay, in MicroStrategy's case, 82 basis points to get the more Bitcoin? If you borrow money for free for five years and buy a billion dollars of Bitcoin with it, and if Bitcoin goes up 60%, your return will be higher. MicroStrategy is buying Bitcoin, but we're doing it as a public company with intelligent leverage. Okay? Well, how does that compare to all the S&P 500? Okay, Nvidia is the number one. And you can see that it's, we used to be proud, we were slightly beating them, but now we're crushing them, right? This is not even funny anymore. Now, here's the thing. If you guys can, if you can copy Nvidia's business model, I encourage you to do so. I don't think Apple and Google and Microsoft and Amazon believe they can copy Nvidia's business model. But I'm inviting all of you to copy my business model. I'm telling everybody, I'm singing it, I'm yelling it from the treetops, I'm showing you how I'm publishing the playbook. It's the simplest thing possible. Any company can copy that, right? And that's what you get if you copy that business model. This is how we compare to all these assets. What's the secret? Well, it's intelligent leverage. Intelligent leverage. The capital markets are unhealthy. And fiat capital is toxic. I just showed you what's wrong with the U.S. Treasuries. If you arbitrage between something that's minus 5% and something that's plus 60% with leverage, you can create a monster company. Okay? How do we perform? Well, we beat 100% of the P, 500. Bitcoin. Look at Bitcoin. You don't have to be MicroStrategy. You could be the most brainless person imaginable, and you could have just bought Bitcoin. You would have beat every single company, Magnificent 7, they beat 95%, 60% of the S&P. Can't beat the index, right? That's the challenge. So I say volatility is vitality. Conventional wisdom is run away from it. It turns out that the smart thing to do is run toward it. Volatility is not a problem if you're rich. If you're Bernard Arnault, and you go from being worth $150 billion to $250 billion, that wasn't painful volatility. When Elon Musk made $100 billion this week, that was not painful volatility for him. That's the volatility you want. You want to own assets with massive leverage. What does that get you? Well, what happens is if you, if you're, if you're basically spinning at high frequency a bunch of assets, you get massive liquidity and massive open interest in your options market. And what this illustrates is that MicroStrategy is one of the top 10, uh, companies in the S&P 500 for liquidity and for open interest. And it also illustrates that on a market cap basis, we're number one, right? We're the literally the hottest, most radioactive stock. You know, and, and if you're afraid of fire, and if you're afraid of nuclear power, hot and radioactive are dirty words. But, you know, human civilization was built on one of them, and the future is based on the other one. And so I don't think they're dirty. I think this is opportunity.

This is just a schematic of our, of our business. What are we doing? You ever see a ship? Well, half of the weight of the ship is above the water line, the other half is below the water line. If you want to have 500 tons above the water line, you got to have 500 tons below the water line. The baseline for Bitcoin is the spot ETFs. That's 50, 55 vol, 55 ARR, or 60 vol, 60 ARR. MicroStrategy strips the ball and strips the performance off of that asset and sells it into the fixed income market and into the capital markets to people that are more risk adverse. And then we actually layer that ball and that performance on the equity. So our equity can be 2x Bitcoin, and our bonds can be 1x Bitcoin with much less risk. And the entire thing, uh, is self-sustaining. As long as we're stripping risk and volatility off one set of instruments, we can, uh, add it to the equity and the options market and the other set. And, you know, this is again, it's just how, how most things work in nature.

Next, um, a lot of times people say, well, you know, the company's valued at a premium to its, uh, to its net assets. And I think that's the wrong way to think of it. It's like saying Standard Oil, you know, has a few billion dollars of reserves, so it seems to be valued at a premium to the reserves. Well, the point is, Standard Oil does something more than just have, own stuff. By the way, Microsoft is valued something like 50x its reserves because it does stuff. And so there's an operating company that does stuff. So what does our operating company do? We're refining crude capital. We're refining like you refine crude oil, and you pull in crude oil on one side, and out comes kerosene, which goes into your jet engine, or out comes gasoline, goes into your car. Jets and cars don't run on crude oil. There's value added to refine it and make it into a product that runs jets and cars and trains, and you can burn in your house, and asphalt you lay down on the road. So petrochemical products are valuable. That's why oil refineries are worth a sum of their operations and their reserves. Well, there's a, there's $300 trillion dollars of capital in the capital markets. They can't buy Bitcoin. They don't want Bitcoin. They want Bitcoin with no risk. They want Bitcoin upside with no vol. They want double Bitcoin. They want 10x Bitcoin. They want something different than Bitcoin. So if you were to say, I think the oil company is only worth its reserves, okay, fine. We'll just like blow up the refineries, and we'll all freeze to death. Okay? What we're doing is we're refining crude capital.

Well, this is an interesting slide. MicroStrategy is the leader in issuing Bitcoin-backed bonds. Okay? What's interesting about them? If you bought our bonds, you get 134% return. If you bought Bitcoin the same day, you get 70% return. We actually gave you all the upside of Bitcoin with no risk, stripped of all, stripped the risk, stripped the downside, gave you double the upside. Why wouldn't you want that, right? If you like Bitcoin, why wouldn't you like Bitcoin without the risk of Bitcoin? How do you do that? You have to actually issue the bond senior in a capital structure, which is all Bitcoin. If I diversify the capital structure, if I dilute it, if I put $100 billion of Treasuries on it, you lose the vol, you lose the return, you lose the performance. You have to be all in on Bitcoin to do this. But once you're all in, you can do this over and over and over again. This is infinitely scalable. We've got, uh, a primary KPI we use, we call it, uh, BTC yield. And BTC yield is the rate of increase in Bitcoin per share since the beginning of the year. We've increased Bitcoin per share for our shareholders by 26.4%. Um, what does that translate to? It translates to like almost 50,000 Bitcoin. And what are we doing? Well, we just launched the biggest ATM offering in the history of capital markets, $21 billion. We thought Satoshi would be proud of us to raise $21 billion of capital. And it's out, part of a $42 billion capital plan. And so we're actually raising 10, 14, 18 billion, that's our target over the next three years. And of course, all of that is going into buying Bitcoin. If Bitcoin trades at $40 million a day of natural, if there's natural sellers of $40 million a day, you can divide $40 million into $42 billion and figure out how many days we're buying, right? This is one way to look at it. We're about, uh, 27, 279,000 generated a yield of 7.3%. That works out to 18,410 Bitcoin. That means that we, we created 18,000 Bitcoin at no cost and no dilution. It's like a Bitcoin miner. If you had a Bitcoin miner and you mined 18,410 Bitcoin in 10 days for free, that's what we did, right? That's what that is. Multiply that by the price of Bitcoin, and you can figure out what's that worth to our shareholders. Years to date, we, we actually, uh, generated a 4, 49,933.21 Bitcoin. Every single day for free, no dilution. That would be one-third of all the supply, right? It's like we're one-third of the hash rate, but we managed to do it with no electricity, no capital cost, and keep scaling it. And the difference is, we're enriching every Bitcoin miner. We're actually not decreasing their profitability. They're getting wealthier while we're doing this. This is a very virtuous thing.

Okay, now let's switch to the fun topic. The Red Wave. The Red Wave. You know, we didn't know what was going to happen. But, you know, as of this morning, I'm reading the Republicans have taken the House, they've taken the Senate, they've taken the White House. And what's the Red Wave about? Well, I think I'd boil it down to this phrase. Elon Musk, kind of the heart, the soul, the zeitgeist of the moment, has that quote, "Give people their freedom back." This entire Red Wave is about getting freedom back. And this is the guy that's going to give you your freedom back. And he is all in on Bitcoin, all in on crypto, all in on freedom. He's in favor of business. He's America First. He wants to unleash entrepreneurial spirit from the clutches of bureaucracy. He has these words for you: "Better do that again. Never sell your Bitcoin." I don't know where I got that from. Implications end into the war on crypto. It's one of the planks of of the entire election. Lay out a digital assets framework. Accelerate institutional adoption. Modify the tax laws, make them much more favorable to crypto, to Bitcoin, to industry, to everybody. Can you go back? And, uh, a strategic Bitcoin reserve. All these things, I think, are implications of the Red Wave. They're all coming. Big milestones for Bitcoin: institutional adoption, a repeal of SA 121, the ability to, uh, create, in-line create redemption of Bitcoin ETFs, options on Bitcoin ETFs, approval for solicited sales by banks, and acceptance of BTC as collateral for credit. Crypto Renaissance. This is going to usher in a crypto Renaissance. What is it? And why? The traditional capital markets, they're failing the public. They're crippled by antiquated structures. And they're based on those structures are based on 20th century techniques. They're all obsolete, right? We're living in a world that was defined in the 1930s. And if you read Rothbard, he'll tell you that the '33 SEC Act was meant to create a cartel and limit access to the capital market to just a few people. It was already a restraint of trade and an encroachment on freedom in 1933 under the Roosevelt administration. It's just gotten progressively worse. Traditional capital markets, just too expensive. It's like, too many lawyers. You want to go public? Too many lawyers, too many accountants, too much money, too many employees, too many years, too much revenue, too much of everything. It's just too hard. And, and if you manage to get public, if you're one of the 4,000 companies that goes through that and spends four years and $40 million, and you get public, there's no liquidity in your options. There's no liquidity in the spot. You can't beat the S&P. You can't retain earnings. You're limited in the investments you can make by the SEC 40 Act and the SEC 33 Act. You're, you're basically hamstrung. You can't take risk. You live in fear of missing the quarter. Capital is toxic. Volatility is toxic. Inflation is killing you. That's the problem. That's why 2,000 companies in the Russell 2000 are all struggling. Don't take my word for it, though. Here's the chart. Number of publicly listed companies in the U.S. over the past 20 years, 25 years. Now, I invite you to put anything on that chart. If I, if I put that chart up and I said, number of basketball players, number of, number of public schools, number of planes, yachts, trains, apartments, number of televisions, number of computers, number of wealthy people, number of, I don't care what you put. It's a sick chart, right? It's a chart of a dying economy that's not working. In a healthy, bu, healthy economy, you shouldn't have charts going down and to the right. That is a chart of like Xerox copy machines, right? Or typewriters or buggy whips. Except American public companies shouldn't be an antiquated, rapidly obsolescing product of the civilization. The traditional markets, they're exclusionary. They're elitist. There's 4,000 publicly traded companies in the U.S. They're the cream of the crop. There's 400 million small businesses in the world. There's 40,000 listed companies. There are 400,000 big companies. Okay, 0.016% of the United States businesses are served by the capital markets. Like, like in what world, you know, is 0.06% of the people having access to water, electricity, power, mobile phones, computers, internet? In what world is 0.006% winning, right? That's anemic. And we have been beaten into submission to think that there's something healthy about that. That is not healthy. That's not normal. Our current regulations require four years and $40 million to create a traditional security. But you could do something smarter, faster, stronger in a digital token in four hours with $40. And so the Millennials, the Gen Z are looking at this, they're like, I don't get it. I could do something better and cooler in four hours. Why do I need armies of lawyers and accountants in order to do something which is worse, right? And that is the driver behind the crypto Renaissance. Now, the industry needs a digital assets framework in order to grow and prosper. That's very clear. Without a framework, we're not going anywhere. But this is not a complicated thing. I think, I think the previous administration acted like it's complicated. A lot of people think it's comp, okay, it's not that hard. It's three steps: Define the asset classes, set sound ethical, economic, and technical guidelines, and provide a practical legal method to issue, own, and operate digital assets. One, two, three. Very straightforward. Has not been done. The industry will not go forward until we've done those three things. It would take like, 10, 10 pieces of paper to define 95% of this decently. So what are the assets? A digital commodity, an asset without an issuer, backed by digital power. That's what Bitcoin is. A digital commodity. A digital security, an asset with an issuer, backed by a security. Not complicated. Equity, debt, derivative, something tokenized. A digital security. A digital currency, an asset with an issuer, backed by a fiat currency. Stablecoin, Tether, Circle. Straightforward. A digital token, a fungible asset with an issuer offering digital utility, something useful in cyberspace. An NFT, a non-fungible asset with an issuer offering utility in cyberspace. Again, not complicated. ABTs, asset-backed tokens, an asset with an issuer, backed by a physical asset like gold or oil or corn. There you go. Those are the asset classes. Those asset classes could be hundreds of trillions of dollars. Now, the framework. What are the rules? Well, digital currency rules. H. H. This is what our, uh, our government is going to need to do over the next year. They need to lay out the, uh, the rules of the road for this. So here's a simple question: How does a corporation issue and operate a stablecoin backed by USD reserves that could be transferred freely and instantly between humans and machines worldwide? What's the asset test? It's very simple. When Tether relocates to the U.S., we will have solved the problem. Why wouldn't you want them to relocate to the U.S.? Create a simple, a simple strategy or a simple guideline. They move their digital currency operation to the U.S., they buy hundreds of billions and trillions of dollars of U.S. currency. Everybody's happy. Very simple. We won't have succeeded till we solve that. Digital securities. How does Apple make its shares available for trading 24/7, 365 on a digital exchange? How does an Apple shareholder take possession of their shares on their own iPhone? Um, it seems kind of ridiculous that you can't hold a share of Apple stock on an iPhone. Why not? Somehow the entire rhetoric became, it's like unethical to do. How is it unethical to hold a share of Apple stock on an iPhone? It's not unethical. It's like, so logically obvious. If I can hold my photos, my books, my communications on an iPhone, on a movie, why can't I hold a share of stock on an iPhone? Is it possible? Of course it's possible. In fact, all the crypto bros figured it out. We just put them in jail for figuring it out, you know, it's like, it's not hard. Um, but that's the question. And what's the asset test? Well, when MicroStrategy stock trades 24/7 on Coinbase, we'll have solved this problem. Why can't, why can't they? By the way, I can't under the previous administration without the framework, but it's very obvious. You'd want to. How's a European living in Japan send a share of Apple stock to an American in Argentina using an Android phone on Saturday afternoon? By the way, substitute Apple stock for, uh, photo for message. It works with photos, it works with messages. It just doesn't work with a share of Apple stock. Is there something unethical about moving Apple stock instead of a message or a photo? It's very straightforward. Is it hard? Not hard. You just need the framework. What's the asset test? When you sell that share for USD, and you can convert that to to Argentine pesos and pay the rent with it, then you will have solved the problem. How about small businesses? Right? How does a small business issue securities where $3 million to fund, uh, their expansion when they've got a few hours and a few thousand dollars to spend, and they don't employ any lawyers? Is it unethical to want to do that? No. Is it, is it good for the economy? Of course it is. How many people want to do it? Well, maybe like 400 million want to do it. Is it possible? Yeah. What's the asset test? When you can invest in Joe Rogan, when Rogan releases Rogan token, and yeah, then you've solved that problem. Would he, could you, in time token rules? How does a celebrity issue a digital token to their followers that offers super fan privileges to the holder? And what are the obligations of the issuer, the owner, and the exchange? It's a very simple question. Not that hard. I mean, you can, you could answer the question in, in two paragraphs or three paragraphs if you wanted to write it. What's the asset test? It's when you own Katy Perry Coin, right? Then you'll know it worked. When Katy Perry issues the token and someone's got it, or your daughter's got it, then that works. How many people want to do that? Oh, like millions and millions and millions of people want to do it. Like, I, you know, just about every celebrity I've ever met would probably want to do it. Exchanges. How does a corporation offer crypto exchange services, allowing the public to issue, buy, sell, transfer digital assets? Well, that's the question, right? What's the asset test? Well, when Binance moves its headquarters to the U.S., you'll know you've solved the problem. Would we want them to? Of course we want them to, right? Why wouldn't you want every company that does something that people want to buy or want to use, why wouldn't you want them all to come to the U.S., right? Like, why don't we want them? Well, they won't act ethically. Well, just make the rules. Give them some meth. I don't think anybody in business wants to cheat their customers, right? They're just, they're just caught in a, in a obsolete, you know, antiquated oligopoly situation where there, it's illegal for them to actually solve the problem. So the crypto Renaissance is going to revitalize the capital markets, right? And what would happen? Well, you can see here, coming back to my chart, well, a big chunk of equity. When Apple and Google and Meta can actually tokenize their equity, you think they will? Of course they will. Of course they will, right? You know, you think that Tesla will tokenize Tesla stock? Of course they will, right? So you'll see a lot of equity get tokenized. You'll see bonds get tokenized. We used to have, you know, we had bearer bonds. Like we've gone backwards. The Rothschilds sold bearer bonds in the 19th century. Well, how about going forward to bearer bonds again? We'll have tokenized bonds, tokenized currency, token, we'll even have tokenized real estate. I suspect someone will sell you 100 acres of farmland or timber land in Canada or whatever, and you'll have fungible real estate. You'll have non-fungible real estate tokens, I suspect. And, uh, let's, what does that look like? That transformation will, will probably transform $500 trillion of assets from the analog world to the digital world. And that's going to bring extraordinary prosperity, right? You're going from a trillion to $500 trillion in digital assets. You're going from $1.8 trillion of digital capital to $280 trillion in digital capital, right? Like, what's the secret? Well, everything goes smarter, faster, stronger at the speed of light, right? A million times a second. Do you think we'll be more efficient if the robots make a million times a second decisions between 8 billion other robots? Probably. Or we can do it the old-fashioned way, put your book on a wooden ship and sail it for three months across the ocean, and then seize half of the book at the border because it violates customs. And that's another way to send information.

I'm going to, I'm at the end of my presentation. So I saved the best for last. These are my comments on the United States Strategic Bitcoin Reserve. The Strategic Bitcoin Reserve was introduced by Senator Lummis at Bitcoin Nashville. At that point, the outcome of the election was uncertain. If it had been a split Congress, if it had not been a Red Wave, it would have been a challenge. This was, this was unclear 10 days ago. But today, you have a, you have a pro-Bitcoin White House, pro-Bitcoin House of Representatives, and pro-Bitcoin Senate. And a pro-Bitcoin Senator that has made her mission to accomplish this. And her bill calls for a million Bitcoin to be purchased by the United States government over five years. Let's talk about the geopolitical logic. Why will it happen? Why should it happen? Well, first of all, it establishes a fair, equitable, and peaceful system to resolve political differences. We know that Donald Trump's in favor of ending endless wars. It's better to have a business outcome than a military outcome to solve problems. Go back. And, uh, this supports prosperity and Lusher and Pax Americana in the 21st century, right? This establishes Pax Americana 2.1. This is a chance to own the 21st century like the U.S. can own it. You address the deficit with an innovative economic idea and an innovative technical idea. You, you extract trillions of dollars of capital from the 20th century physical and financial economy. But as the money flows out of physical and financial assets, it flows into Bitcoin. And the United States is going to own all the Bitcoin. So the United States is the beneficiary of the passage from the 20th to the 21st century. Own the 21st century. This is where all the money is going. You might as well buy it before it gets there. This cements the U.S. dollar as the world reserve currency. And it also establishes a world reserve capital network that the U.S. also owns and controls, right? The best way to protect the dollar is make sure that we retire the debt and we become rich. The next best way to protect the dollar is to make sure that if anybody ever considers a different capital asset other than treasury bill, you own it. Well, there's

Only two capital assets that make any sense. The 20th-century asset was the treasury bill. The 21st-century asset is Bitcoin.

If you own both of them, you can't lose. You can only win. Any movement away from treasuries is going to go toward Bitcoin. The obvious thing to do is just buy it before everybody gets there. They either won't go and you won't, it won't matter, or they will go and you'll be, you'll be, uh, beneficiary then too.

The other geopolitical brilliance of this is that you're attracting foreign capital to the US from our enemies. People are selling Chinese real estate, Russian real estate, African real estate, South American real estate, everything in the world they're selling it. Their capital, the securities, the bonds, they're selling that in order to buy Bitcoin. And so everybody in the world, if you had a billion dollars and you lived in Mexico, would you trade it for a billion in the US? Yes. Would you trade all your money in Cuba or Venezuela or China or Russia for US real estate? Yes, you would. But you can't. You can't, uh, do that, right? It's impossible for Russian oligarchs to sell their Russian real estate and buy Manhattan real estate. But what they can do is buy Bitcoin. When they do, if we own it, we benefit from it.

So this is about attracting capital from everywhere else in the world, bringing it to the US where it creates US jobs, US prosperity, enriches US corporations, US institutions, US citizens, and the United States municipal, state, and federal government, right? You want all the money in the world to come to you. And I, and if they wanted to buy the land, it's like, well, I don't know if I can sell them the land. But they can just buy Bitcoin and then our Bitcoin goes up by a factor of 100.

This is the impact of the Lummus bill. If you crank in the assumptions, if we implement the Lummus bill, well, we're going to overcome and, and we're going to get the debt under control via good tax policy, good technology policy, good industrial policy, innovation, AI, robots, the like. But as we build the Bitcoin position to $17 trillion, we're going to, we're going to retire and convert the net debt position to be something which is very di-minimus.

So, yeah, is this a good idea? Yeah. Why? Because if I'm wrong, it costs nothing. If I'm wrong, it costs nothing. You're paying for it with money you printed, which cost nothing. It's like, it's literally like, it's like a penny on $100. It's like one, two, 3%. If I'm wrong, it costs nothing. If I'm right, you solve all your problems. Like, that's an asymmetric bet. Like, I'm giving you a thousand-to-one payoff, and you're betting with free money, and you're going to tell me you don't want to take the bet because you're risk-averse? You have free money. It's a, a 1000-to-one payoff. That's the Lummus bill.

There are historic precedents for this, right? Once upon a time, the Dutch paid 60 guilders for Manhattan. They generated a multi-trillion dollar payoff. 60 guilders. Once upon a time, we bought the Louisiana Territory for $15 million. It's like a third of the country. It's worth trillions. We bought California from the Mexicans under duress. All not, but we still paid them. They didn't want to sell because they were smart. You shouldn't have sold California. But nonetheless, we paid $18 million. We had a chance to do the deal. By the way, I don't want to sell you my Bitcoin either, right? We paid him $18 million. We got California, Nevada, Vegas. It's worth quite a lot. $8 trillion. And then we bought Alaska from the Russians. We paid them a few million. It's worth trillions. Okay. It's been done before. It's a very simple idea. Figure out where the value is going to be, go buy it cheap and hold it. You're a nation. That's what nations do. This is manifest destiny. Bitcoin is manifest destiny for the United States. I think the Trump administration understands it. I think Senator Lummus understands it. I think everybody that's behind her understands it. That's why it will happen.

This is my last slide. This is the greatest deal of the 21st century. The Strategic Reserve. If we don't do the Lummus deal, if we don't pass that bill, and all we do is just hold the existing Bitcoin on the balance sheet, it's worth $3 trillion to the people. If the Lummus bill passes as currently drafted, it's a $16 trillion dollar benefit to the United States over 21 years. If they decide to go double max and they double that, it's a $32 trillion dollar benefit. If they assume a triple max position and they purchase 4 million Bitcoin, it's $56 trillion. And of course, the deal of the century, maybe the greatest deal of all time, would be the Trump deal. If we go Trump max, which is the rational thing, buy the Bitcoin, it's worth $81 trillion dollar. We'll retire all the debt. We'll be the richest company in country in the world for hundreds of years, right? It's very straightforward. And the beauty is, the more aggressively you pursue this, the less risky it gets. This is one of those things where if the US does this, every other country has to follow. The Saudis, the Emirates, the Europeans, the Chinese, the Russians, everybody follows. Every company follows. The 20th century gets put away. The 21st century comes into into view. The capital comes out of the rest of the world, flows into the Bitcoin network, which rests and floats right above the United States of America.

So, will this happen? Yeah, I think it's going to happen. The only question is, is it going to be a double max, a Lummus bill, a triple max, or a Trump max? And that's what we're going to find out in the political process in the coming 12 months. And with that, I want to thank all of you for your time.