Michael Saylor’s Keynote: The Digital Gold Rush💡

Thanks for joining me today. Um, in uh, about 20 years, people will look back and say, “Where were you during the digital Gold Rush?” And um, and if you recognized it and you did something about it, you’ll be rich. And if you recognized it and talked about it, you’ll have good stories. And uh, there’ll be a lot of people that didn’t recognize it, and they’ll be wherever they are. And uh, I’m going to spend my time uh, this morning describing it to you, and uh, hopefully you’ll be one of the ones that get rich. So uh, let’s start. My clicker, okay.

The investor’s Dilemma. Um, investors have a simple dilemma: How do you make money? And what does it mean to make money? Well, how do I outperform the cost to Capital? Um, if we look at uh, the performance of a bunch of assets—and this is most assets over the last 14 years—what you can see is that, you know, investing in a bunch of things don’t even beat the CPI. But uh, there are a number of things that will beat the CPI. I mean, your typical diversified portfolio, your stocks, your real estate, etc. But the question is, what’s the real Benchmark for an investor? And uh, I don’t think it’s the CPI. The CPI is a is a very synthetic metric which is cherry-picked by a bunch of government-paid economists in order to be the lowest possible measure of inflation. If uh, things get too expensive, they throw it out of the CPI. Uh, a much better measure uh, would be the monetary inflation rate or the expansion of the M2 money supply. And it turns out that the expansion of the money supply very, very closely tracks the performance of the S&P index over 100 years. And when you think about it like that, what you realize is that when you invest your money in the S&P index, you’re not making money; you’re just not losing money. If you were rich a hundred years ago and you held a diversified portfolio of stocks, you’re still rich. If you uh, bought a bunch of currency or bonds, you’re poor. And uh, you can see here over the past four years, um, the SNP or or the monetary inflation rate looks like about 133%, and um, not many things beat that inflation rate. It’s very, very difficult. In fact, uh, if you were if you’re beating that hurdle, you probably beat it with big Tech: you beat it with Apple and Amazon and Google and Facebook. Because the best idea in the 21st century has been by a by a big Tech digital monopoly like a Meta or a Microsoft, somebody that’s um, that everybody needs, nobody can stop. And if you bought it before people understood it, you’re probably doing okay. And even after they understood it, you’re probably okay. But um, diversification generally is selling the winner to buy the losers. If you diversify out of Amazon, you lost. If you diversified out of Apple, you lost. If you uh, if you diversified out of Microsoft into any of the 100,000 other business software companies, you lost. Uh, and why is that? Because in the modern era, if you can establish a digital network which goes to a billion people, it’s got such a crushing economic advantage that it’s unlikely that anybody else is going to be able to catch up with it. And Microsoft is proving that today, so many years after it was founded.

Now the question is, what’s the solution? Is Bitcoin the solution? Well, the last four years, Bitcoin’s performance is 46%; it’s it’s totally crushing every other asset class and every other idea, and it’s definitely beating the rate of monetary inflation. This is a a chart put up by Bitwise yesterday. This is the last 14 years of Bitcoin. As you can see, the top-performing assets, the top of the chart, Bitcoin is winning the investor Super Bowl 11 out of the last 14 years. If you’re you’re paying attention, you got to wonder like, why is it winning? And is this a gimmick? Now, the advocates of Bitcoin, such as myself, who wear orange ties, we think that Bitcoin is the first perfect money. We think Bitcoin is a paradigm shift. We think Bitcoin is the singularity where science collides with economics. We think you have to rethink economics; you have to rethink capital; you have to rethink money; you have to rethink business; you have to rethink corporate finance. That’s what we think, and that’s why we’re winning. We think it’s there; there’s a fundamental technology shift here; there’s a fundamental paradigm shift here, and we think we’re going to keep winning. We think Bitcoin is digital gold. We think it has all of the virtues of sound money, none of the vices of physical gold, which was that barbaric relic. There’s a lot of problems with gold. We think that Satoshi got rid of, engineered out, all of the problems and just kept the good stuff. That’s what we think. What do the skeptics think? Skeptics of Bitcoin think it’s too good to be true; it’s money for criminals; there’s no use case; it’s too volatile; it’s backed by nothing; the government’s going to ban it; ah, it’s going to be obsoleted by by the next yo-yo coin; or it’s going to be hacked. And we hear this over and over and over and over again. And if you ignored something that’s won 11 of the last 14 years, either you didn’t know about it or maybe you thought one of these concerns was enough to keep you out of the asset. In my experience, everyone is against Bitcoin before they’re for Bitcoin, including me.

And my journey from skeptic to believer: This is my public utterance on December 18th, 2013: “Bitcoin’s days are numbered; it’s just a matter of time before it goes suffers the same fate as online gambling; government’s gonna ban it.” This is what I, by the way, that’s what I thought when Bitcoin was about a $100 a share or $100 a Bitcoin. When Bitcoin was $10,000 a Bitcoin, 100x later, this is what I thought: “Oh my God, I have seen the light; Bitcoin is going to change the world; it’s unstoppable; it’s growing exponentially smarter, faster, and stronger.” Now, this is the Bitcoin journey, and everybody goes through this journey. You’re born a denier; it’s tulip bulbs; it’s a scam; this is the Peter Schiff; you’re born a Peter Schiff. Maybe you stay a Peter Schiff. One hour is enough to be a skeptic. After one hour, you’ve learned just enough to hurt yourself. In 10 hours, you think, “Well, maybe it’s an asset; I think I’ll trade it; I’m gonna buy it cheap and sell it when it’s expensive, and I’m gonna buy it back cheap, and I’m just going to arbitrage something this way and that way.” After 100 hours of study of thinking about it, you become an investor. This is a digital monetary network; this is like Google for money; this is Facebook for money; Facebook for rich people. You know, Rupert Murdoch never brought 100 million friends to Facebook. When Rupert Murdoch buys into Bitcoin, the billionaire brings billions with them, right? The tra the trading idea is not that complic not that complicated, and the investor ideas, it’s the next big Tech Network; it’s a digital monopoly for money. After about a thousand hours, you become a maximalist, and a maximalist is: This is an ethical imperative; the world’s a better place with this, right? The money’s broken; the world is broken; billions of people are suffering; fix the money; fix the world. That is the Bitcoin Journey. Now, depression. It’s 100 hours to an investor. I only have 41 minutes left. Welcome to the one-hour Bitcoin investor crash course. I am going to try to get you to an investor level by the time I’m done. But first, um, we require return to First Principles. This is uh, my alma mater, MIT; that’s the Great Court. All around the molding of the Great Court are all the great scientists: you know, Newton and Curie and Maxwell and Darwin, and uh, they’re trying to tell you that certain people had ideas that changed the world; you might want to study them. So let’s start with some basic principles. What is Bitcoin? Bitcoin represents the digital transformation of energy. Apple’s digitally transforming photos, and Google’s digitally transforming books, you know, and and uh, Amazon digitally transformed the storefront, and Nvidia is working to digitally transform intelligence. But what does it mean to digitally transform energy? The human civilization; it’s built on energy. We’re here because of energy. The fact that humans figured out how to capture, create, channel energy—that’s what that’s what makes us what we are. And the first big energy paradigm shift or or big energy revolution was um, sorry, was fire. We basically extracted energy from matter, and we turn it into heat and light. And uh, without that, we’re no better than the apes. The next big energy transformation is water, which is really capturing the energy in gravity via the fluid of water. And that discovery of how you extract energy from water flowing downhill and turn it into mechanical energy, it’s what makes mills. We’ll give that to the Romans and the Greeks. James Watt figured out how to put energy into a factory without a water supply: portable energy. The significance of the steam engine is you could put a factory in a city that didn’t have a stream, didn’t have a waterfall; it’s a big deal. It made the Industrial Revolution possible. It elevated the British to a new level to dominate the world. John D. Rockefeller pioneered the the manufacturing of Standard Oil; that meant chemical energy that you could transport, you could store, you could convert into mechanical, thermal, light, electrical energy, or petroleum product—a Lycra, polyester—you want to get rich, jump onto an energy revolution. Think about how much money was made here; so much money that there’s still trillions of dollars worth of oil companies, all founded by this one man. Electricity: it’s electrical energy that you can channel cleanly and silently over long distances and convert into heat, light, sound, vision. We we extract clean energy with a nuclear reaction; changes the world. And now, by the way, a little aside, we attribute that to Enrico Fermi; he did that at the University of Chicago. The University of Chicago is the University founded by John D. Rockefeller; there’s a little bit of irony there. What’s Bitcoin? Bitcoin is a discovery of digital energy that can be programmed by a computer and channeled through time and space. Okay, that’s that’s a lot to wrap your head around. There’s a lot of applications with digital energy. What does it mean? It means something conservative; it means that I’ve got a billion dollars worth of something, and I can move it anywhere else in the universe or hold it for a thousand years, and it’s still something, right? We haven’t figured out how to do that until Satoshi. What’s the most lucrative application of digital energy? It’s the digital transformation of capital. Okay, yeah, I learned a lot of stuff in school; I got a pretty decent education; I went to the finest trade school in the world, Harvard. People used to call us—they did not teach me about money; they did not teach me, you know, about capital; they did not teach me about economics. And most of what I did get taught was just wrong in the economic political sphere. But let’s let’s start with a basic observation, right? Global wealth is distributed across a lot of assets; there’s $900 trillion dollar worth of wealth here, you know, and you can come up with different charts, but this is this is a reasonable one. Now, you could think of it as, “Oh, I own some real estate; I own some bonds; I own some money; I some currency; I own some Equity; I own some art; I own some gold.” But the real question is, why do you own this stuff? And it’s divided into two categories: You own it because it’s got utility—you want to look at the art; you want to live in the building; you want to hang out in the yacht; you want to fly the aircraft; maybe you need the currency for working capital to operate your bakery or your manufacturing plant; maybe you have your money in coal or oil or some other feedstock. So that’s one reason to have assets; and the and the other portion of this is just long-term capital; I’m just storing value; it’s a rich person that has a bunch of money, and they don’t know what to do with it, so they buy something, right? Whenever you hear about a billionaire that bought 16 expensive houses, you’re like, “Well, they can only live in one; why they keep buying things?” Well, because they think it’s a better investment than just putting the money in the bank. So when you think about the world that way, you say, “Long-term capital, store of value,” well, that’s half the money in the world or half the wealth in the world, $450 trillion. What is capital? This is, by the way, if you go and chat GPT or Google, “Capital,” define capital, the definitions are awful, you know? I feel like you go back 300 years, they had a better idea what capital was than if you look at the at the world today; nobody thinks about capital, right? Not since 1971. So you’ll find really awful definitions of capital, but what is it really? Well, it’s money, wealth, power, value; it’s economic energy. Capital is economic energy. If you had a 1% of all of the capital in a country 100 years ago, how do you keep it, right? You can keep 1% of the currency, but that might not be equal to 1% of the economic energy. So when you think about first principles here, you realize that Bitcoin represents the transformation of our capital from financial and physical assets to digital assets. The first law of money says L = V divided by M: The lifespan of an asset is equal to the value of the asset divided by the maintenance cost of the asset. If you buy a $10 million yacht and you spend a million and a half dollars a year to maintain the yacht, your $10 million is gone in six years, right? Your money, the useful life of the yacht is six years; you’re not going to stay rich buying and investing in yachts or you know, filling the blank. If you buy a house in Miami Beach, you’re going to pay as much in taxes as the house cost you within 20 years; it’s not a store of value. When you start to apply this formula to all these assets you can put your capital into, you realize that some of them are very short useful life. The Argentine peso won’t hold your capital more than two years, nor will the Turkish lira. The US dollar might hold your capital for 10 to 15 years. You invest in stocks, maybe 25; bonds, not more than 30; uh, diversified mutual fund, the S&P index, you’re still getting diluted by that. So all of these financial assets have a useful life, 10, 20, 30 years. And why? Because of all these risk factors. This morning, the news is: Apple gets a $14 billion tax bill; oops. The next news is: Google gets fined $2 and a half billion dollars by the EU; oops. Torts, taxes, war crimes; oops. Uh, maybe there’s a tariff that’s going to interfere with your trade. Think about all the risk factors when you’re buying a financial asset: hyperinflation, right? Maybe maybe you suffer from a new regulation: “Oh, it’s just illegal to do what you do; oops.” You know, if you uh, invest in a stock and read the 10K, there’s 20 pages of these risk factors. I’m an expert on these risk factors; we came public in ’98; our company must have published hundreds and hundreds of pages of risk factors; so there must be hundreds of thousands, maybe millions, of pages of SEC filings on risk factors. This is the dilemma of storing your capital and equity if you’re an investor. So what wealthy families do, they run to physical assets, and they invest in what? Probably not yachts and Ferraris, but maybe gold, gold or paintings or land. Land is everybody’s favorite thing, but land gets taxed at 1% a year; the average property tax rate is 1.1%, and that’s that means it’s gone in 91 years if the property value doesn’t get assessed up. When the when the government assesses the property value up, they tax your land away from you in 30 or 40 years; you don’t own it; you’re renting it. So there’s a lot of physical risk factors here, right? A lot of taxes, right? We come up with a ton of ways to tax property; a lot of a lot of other risks you might come run into uh, and they’re so creative: a riot; the headline this morning, “Riots in downtown DC,” you know, do damage to certain properties. What if the traffic pattern changes? So many different risk factors. So these are the dilemmas of holding physical, financial assets. Satoshi discovered a method to transfer value without a trusted intermediary. Go find the Janet Yellen speech, the legend of Satoshi. And Janet Yellen, the Secretary of the Treasury, says Satoshi, a person or persons named Satoshi, figured out how to transfer value without a trusted intermediary. This gets repeated over and over and over again. Okay, well, here’s the news flash: That’s not the most important insight, and that’s not the most important thing Satoshi discovered; it’s just the thing that people repeat because it’s true. Yeah, I can send a billion dollars from here to Tokyo without a bank; this is the big idea. Satoshi discovered a method to store value without a trusted intermediary, channeling energy through time and space. When I transfer a billion dollars from here to Tokyo, I moved the money through space. When I store the billion dollars for a thousand years, that’s revolutionary. Nobody in the history of the world ever figured out how to store capital for a hundred years or 10 years or a thousand years. But of course, if you think about it, you realize that the implication of not needing a trusted intermediary to transfer value is I don’t need a trusted intermediary to store the value. Now I found something completely new; I found an asset without the financial risk of a currency, a stock, or a bond, or the physical risk of real estate or property. I have created a revolutionary advance in asset useful life. The lifespan of all your traditional, conventional assets is 30, 40, 50 years, and you’re going to get up every morning and watch CNBC to find out whether Apple won or lost the freaking tax lawsuit. And I watched that, and I and I thought, “Man, that’s just awful news for Apple shareholders today; you get a $14 billion tax bill.” That’s why you have to pay attention every day of your life and every quarter, and you got to rebalance your portfolio. What if you didn’t have to pay attention, right? When you buy a Bitcoin and you even put it in cold storage or put it with a custodian, you’re paying 10 basis points. The first law of money says you divide the value of the asset by the maintenance cost, so something divided by 10 basis points lives a thousand years. This is the longest duration financial or longest duration asset the human race has figured out, right? We’ve invented this; this is digital capital, capital, economic energy, digital capital, digital economic energy. Well, what does digital capital mean to an investor? Okay, you got a billion dollars or a hundred million dollars; you buy a hundred million dollar building in Manhattan; that’s capital invested in real estate; that is the conventional best idea of the 20th century for every rich family in the world I’ve met. I can’t tell you how many multi-billionaire, wealthy families I’ve met; they all own real estate; they all own property. Bitcoin offers the benefit of holding that building but without the liabilities of a conspicuous, immobile asset. So what do we do when we digitally transform the building? Well, first we strip away all the bad stuff: no tax, no traffic, no tenants, no torch, no trouble, no mayor, no weather, no corrosion, no regulation; strip away all the bad stuff and then add the good stuff. It’s an invisible building, right? No one’s going to hate you, resent you, and want to want to take your wealth from you because they walk past your big building every day. It’s invisible; it’s indestructible; it’s immortal; it’s teleport; it’s programmable on a computer; it’s divisible; it’s musical. I promised one musical reference. What do I mean? You can vibrate the building at 10 kHz; you can vibrate the building 10,000 times a minute, 10,000 times a second. I can move it 87,000 times on VAR, variable frequencies, on a weekend. I can construct a symphony with the capital. Why don’t you try to move a real building once a second? What about A440? Try to move a real building at 440 Hz; you can’t do it. This is something that you can actually manipulate in a harmonious faction on the frequency of the economic universe. And it’s fungible: You own a $1 million building in in New York City; it’s not like a $1 million building in Tokyo. A $100 million of Bitcoin is like $100 million of Bitcoin in Tokyo; everybody understands what you’re getting. And it’s configurable. So digital capital is like all the benefits of holding something tangible with none of the detriment, right? And people can’t quite wrap their head around that yet; that takes a while to think through, but that’s okay. When they figure it out, by the way, you’ll pay $10 million a Bitcoin until they figure it out; you get Bitcoin at a discount. Digital capital is global capital. Look at the map of the world. I’m going to give you $100 million and drop you in Africa and tell you to buy anything you want, hold it for 100 years; what do you want to buy? Where do you want to buy it? I would represent to you there’s nothing on the entire continent you would rather buy than a Bitcoin, than Bitcoin in that situation. Look at South America, look at Africa, look at look at Asia, look at these places and think about investing a billion dollars in any of them. Think about capitalizing a company; you’ve got the you’ve got the wealthiest company in Nigeria; what are you going to capitalize it on? The Nigerian naira, right? The Turkish lira, the Lebanese pound, the Chinese don’t want their currency, the Europeans don’t even want their currency. If you talk to people in the stablecoin industry, they’ll tell you, “Well, we got digital dollars; we got digital euros.” They don’t want digital euros; they want digital dollars, and they want the digital dollars for a short period of time; that’s because it’s tied to North America. Nobody wants to own anything that isn’t tied into the most secure, most powerful network in the world, and that being the case, if you’re a wealthy person, if you’re a middle-class person, if you’re a working-class person, and you need a savings account anywhere on Earth and you have a mobile phone, you’re gonna want a Bitcoin. And that’s what Bitcoin represents here; it’s superior to foreign debt, equity, real estate, currency; it’s a capital asset. This is difficult for someone in Manhattan to grasp. You live in the greatest city in the world, right? And and presumably the most secure city and the most secure economic network and the most powerful country that’s ever existed, right? Anybody that owns an apartment in Manhattan would say, “I’d never sell it; everything else is a trade down, right? Everything’s a trade down; I I gift it to my children; I’m not leaving.” But now put yourself in South America, in Venezuela or Argentina or Brazil, or put yourself in Nigeria or put yourself in Lebanon and Syria. Heck, the Chinese have capital controls; you can only take $50,000 out of China every year. Why you think that is? Because everybody wants to take their capital out of China; the Chinese currency would collapse if they actually eliminate the capital controls. What about volatility? Everybody talks about volatility. Well, why is it volatile? Well, it’s volatile because anyone anywhere can trade it, because it’s useful. Because if you need to sell a billion dollars of something on Saturday night in a missile crisis, you can do it; it’s the only thing you can do it with. It’s volatile because there’s no limitations, because there’s thousands of active exchanges, because it’s not it’s not supported well on the traditional banking system. It’s volatile because it trades 8760 hours a year, 5x the traditional market. It’s volatile because you can bypass the exchanges, and it’s volatile because it’s cross-collateralized every other kind of crypto; that’s why it’s volatile. But the volatility is a feature; it’s not a bug. And this is a very important idea, right? We live we live in a world where most corporations think capital is toxic and volatility is a bug, and they try to eliminate volatility, and they give away their capital. And I’m here to say volatility is vitality; it’s life, and you should keep your capital, right? The the volatility represents the advantage of Bitcoin for investors; it’s going to drive superior returns over the long term. For traders, it gives you a superior yield in the near term. For finance years, it’s a superior opportunity to securitize that asset. And for analysts, it’s just superior interest; there’s always something going on. What about performance? Everyone is searching for an asset uncorrelated to the S&P 500 with higher returns on a risk-adjusted basis, right? This is the Holy Grail of portfolio theory. Well, you can reason from first principles; let’s just think about it. Bitcoin’s an asset without counterparty risk; it doesn’t give you risk facing a competitor, a country, a corporation, a creditor, a culture, a currency. All these other assets have a certain risk facing one of these elements. So from first principles, you can conclude this thing is and should be and will be uncorrelated. But you don’t have to use first principles; this is Fidelity’s analytics, right? So this is published: Bitcoin has the highest Sharpe ratio; therefore, it has the highest risk-adjusted return. And you can see the correlation to the SNP; it’s not correlated to the S&P. So either you reason from first principles or you look backwards at the statistics. And some people learn from studying data, and some people, you know, think about it. I mean, the problem with with looking backwards is when Godzilla arrives to the playground, all of your statistical models of historic performance of kids, you know, playing in the playground, they’re all out the window, right? I mean, I can change the world by bringing extraordinary new energy and power into it. But that being the case, the statistics say it is the uncorrelated asset with the best performance. Well, let’s look at this chart. This is five years since MicroStrategy adopted the Bitcoin standard. Bitcoin’s up 46%; the S&P is up 133%. So what you see is conventional cost to capital is 133%; digital cost of capital is 46%. What’s the safest investment? Bonds, minus 4% a year. The government requires banks to capitalize with bonds; oops. It’s too good to be true; won’t the government ban it, right? I mean, that’s the reaction; people look at this; they’re like, “Well, the government wants you to use their bonds, and this is just 10x better; aren’t they gonna just ban it?” Okay, well, we get that question a lot; in fact, we get a lot of questions; we get, “Will it be banned? Can it be copied? Can it be hacked?” These are the three questions that I had to ask; my board had to ask; my officers and directors had to ask before MicroStrategy went on its Bitcoin Journey. Your company, you’ll have to answer these questions. So I asked these questions to the Silicon Overlord, Bo, ChatGPT, and I said uh, I said—and you can do it yourself—I said, “List every country where it’s illegal to own Bitcoin,” and it says, “Pretty much everywhere it’s illegal to own Bitcoin.” Okay, well, that’s interesting. I said, “List every country where it’s illegal to own Bitcoin.” It said, “Well, China, maybe, but it says actually it’s not illegal to own Bitcoin in China; they just you just can’t mine it and trade it, but you can own it.” And then it said, “Oh, these are the countries uh, Algeria, Bangladesh, Egypt, Morocco, Nepal, Iraq, Qatar, Tunisia, North Macedonia.” So if those are your economic, you know, economic leaders, right? If you aspire to be like those countries, then maybe. And if you think that we’re going the way of those countries, maybe you’re afraid of it, but but you’ll see here even Chat points out that most of the concerns are around capital controls and fraud, and they’ll probably over time get comfortable with this. I asked, “Has Bitcoin ever been hacked?” And it says, uh, “No, it’s never been hacked; the network has never been hacked; all the things you think are hacks are really just exchanges failing, like uh, you know, Mt. Gox, you know, a lot of banks that gave you mortgages on on real estate, and the bank fails, but that doesn’t mean the real estate’s gone; the real estate’s still there; the building’s still there.” So uh, “No, it’s never been hacked.” Has it been copied? Yeah, it’s been copied a few times: Bitcoin Satoshi Vision, Bitcoin Cash, Bitcoin Gold. That’s interesting. Well, what happened? How’d they perform? Well, uh, none of these forks have come close to Bitcoin’s success; they’ve all failed. That’s the polite way of Chat telling you they failed. But here’s the actual chart. This is what Bitcoin Cash does against Bitcoin; it collapses. Bitcoin Gold collapses; Litecoin collapses; Satoshi Vision collapses; Dogecoin, you can see when Elon went on Saturday Night Live, there’s the spike; since then, collapses. Ethereum collapsing, right? So yeah, it’s been copied; it’s been copied 4 million times; they’re all losing. I asked Chat, “Why institutional investors should allocate to Bitcoin?” This is what it said: “Diversification, inflation hedge, growth potential, digital gold narrative.” Ah, reasonable. Then we asked the guy that runs $1 trillion. No, I I know you have been a leader in willing to embrace crypto; you have made it so that people can be in Bitcoin. We hear that you are thinking about Ethereum; these are incredible things. How now, BlackRock is not known as a uh, a gunslinger by any means, so you obviously must believe that this may be is an alternative. Is this an alternative uh, in order to be a because of the a deficit, maybe something long term people should have absolutely um, as you know, I was a skeptic; yes, I you know, I was a proud skeptic, and I studied it, learned about it, and I came away saying, ‘Okay, you know, my opinion 5 years ago was wrong.’ Here’s my opinion; this is what I believe in today. I believe the opportunity today; I believe Bitcoin is legitimate; I’m not trying to say there’s not bad misuses like everything else, but it is a legitimate financial instrument that allows you to have maybe uncorrelated, non-correlated type of returns. I believe it is an instrument that you invest in when you’re more frightened, though it is an instrument when you believe that countries are debasing their currency, debasing their currency by excess deficits, and some countries are. I believe we have um, countries where you’re frightened of your everyday existence, and if an opportunity to invest in in a a something that is outside your country’s uh, you know, control, then you can have more financial control. And so I’m a a major believer that there is a role for Bitcoin in in portfolios. I believe you’re going to see that as an as one of the asset classes that we all look at. I look at it as digital gold, as I said before, and I do believe there’s a a there’s a there’s a real need for everyone to look at it as as one alternative to. I would say the optimism that I have in the. So there you go. Um, all of the same impressions, the same journey, the same experience, the same uh, the same insights. If you spend enough time, uh, you start to realize that there’s an opportunity here. BlackRock went ahead and launched iShares Bitcoin Trust (IBTC); IBTC is the leading Bitcoin spot ETF product, and it’s the most successful ETF launched in the history of ETFs. And so that’s the benefit of doing the work and embracing the asset class. People ask, “What backs Bitcoin?” It’s backed by power, okay? 700 exahash is all the computer power of every computer on Earth from the other cloud providers; 18 GW is like 18 full-on nuclear reactors; it’s more than the power that drives the US Navy. $800 billion invested; that’s just the rolling 200 the 200-week uh, simple moving average of Bitcoin; that’s how much money’s been put into Bitcoin. 220 million holders of Bitcoin and 420 million crypto enthusiasts; that’s political power, right? In fact, Bitcoin is the most popular; it’s the most powerful crypto network in the world; it’s got the most popular support, regulatory support, technical support, computer power, electrical power, political power, economic power. Once you understand these things, it’s not any one thing; it’s it’s many, many things. But the result is all the smart money in the world, looking for a way to store its value forever, has sifted through 4 million cryptos, picked this one, put $800 billion into it; all the stupid money is buying the other stuff. So you’re asking, “Well, what’s going to protect this network?” Well, all the smart people with all the money and all the power have picked the winner. What protects Google? What protects Apple? What protects Microsoft? Why is Meta entrenched? It’s because at the end of the day, there’s a bunch of people trying something, and there’s got to be a winner. What protects Amazon? Well, there’s a winner, right? This is the winner. And what’s this what’s this? The winner of it’s the winner of the digital capital war; this is the dominant digital capital network.

The MicroStrategy Bitcoin story: We started defensive; we went to opportunistic; we then became strategic, right? There’s a sailor tracker; every single green dot is MicroStrategy buying Bitcoin. As you notice, I time the highs and the lows; well, we just buy all the time; there are no red dots; there is no selling; there is only buying. You buy when it’s high; you buy when it’s low. This is another way to see the chart; MicroStrategy simply built up its Bitcoin holdings progressively to 129,699 Bitcoin; we’ve invested $4.4 billion in that. And what’s the result? Well, we bought an asset that was appreciating 46% a year, and we sold the asset doing minus 4% a year, and then we levered it. Most companies hold minus 4% bonds; in fact, that’s the con that’s what they’ll teach you at Harvard Business School. Okay, what happened? Well, this is as of yesterday, as of close of market yesterday; MicroStrategy stock is up 910%; the best-performing stock

099 at 0.99, and you've only got 3,759 days. That's all you have. There's only 1,114,500 Bitcoin for sale at today's price. It's $74 billion. MicroStrategy will buy $5 billion of Bitcoin in one year. This is not a lot; this is a trivial amount. The price cannot stay at this level. That's $20 million a day. We announced a $2 billion equity offering. We raised $2.4 billion in the first six months of this year. Look at those numbers; it's not that much. This is a phenomenon.

After 099, Bitcoin creation is offset by lost Bitcoin. The supply is effectively fixed. It's the inflection point where Bitcoin becomes the world's first deflationary asset. There's never been anything like it, right? It's more scarce than land in Manhattan. It's more scarce than anything you can name, anything you've ever invented. The fact is, no one's ever seen this before; therefore, you can't compare it to anything. It becomes the world's first perfect money. Of course, there's not a textbook written on it. The Austrians didn't imagine it. You couldn't create it before then.

Institutional adoption of Bitcoin—they're all coming, right? This is the institutional, um, distribution of Bitcoin today: 12 ETFs in the US, 28 global ETFs. They're holding a million Bitcoin. Every one of them is solving a custody, a, you know, and a compliance issue. There are 27 publicly traded Bitcoin miners. There are 28 public companies with Bitcoin. There are all sorts of derivatives. You can see this is an asset class, and you can see the distribution across institutional investors. This is no longer a crypto thing.

What's the future? Bitcoin is going to be driven by approval of bank custody. That's going to be profound. When you can move, when you can buy, sell, and hold Bitcoin at a JP Morgan or a Bank of America, and that'll come sometime over the next four years. Approval of, uh, nine creation, a digital assets framework. Artificial intelligence is going to drive profound increases in equity values and capital, which is going to flow into Bitcoin. It's happening; no one can stop it. The issuance of sovereign debt is going to drive Bitcoin, right? We don't have to worry about the government's not borrowing money, right? It's gonna happen. Integration with big tech is going to drive Bitcoin K awareness and chaos; they're going to drive Bitcoin. So this is coming.

There's an open-source model called Bitcoin 24. You can just Google Bitcoin 24. It's uploaded to GitHub. It's a 21-year macro model. It allows you to forecast all of these asset classes and Bitcoin and cranking all your own assumptions. My assumptions—I actually see a base case which is Bitcoin grows from 0.1% of the assets to 7% of the assets of the world, a 29% ARR. Eventually, we're at $13 million per Bitcoin, right? And, and the model spits out these kind of distributions and these kind of ARRs. This is the world in 21 years. It doesn't look that different than the world today; it's just that Bitcoin now is digital capital. It's still not as big as equity; it just happens to be a global monetary index for people that don't want to take equity risk or real estate risk.

Bitcoin: Cyber Manhattan. Imagine a city in cyberspace, 276 blocks wide, 276 blocks high, 276 blocks deep. You buy a block; that's a Bitcoin. Buy 276 blocks; you got a boulevard. They're not making anymore, so it might make sense just to get some in case it catches on. Quote by Satoshi Nakamoto, January 17th, 2009, 14 days after the launch of the network: it had no value. You have more information, but the dynamic is stronger; the trend is clear, right? The value proposition is: keep your money forever or get rich, right? It's a very clear value proposition to everybody on Earth. Digital capital. You're capitalist. There's a digital transformation in the capital markets. So I would invite you to, uh, investigate further if this is interesting to you, uh, and thank you for your time today.