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We're approaching the end of the year. We're about to kick off 2026. At a high level, what is your outlook for Bitcoin in the new year?
>> Bullish. Um, I think that the the exciting developments in the asset class or bank acceptance and and uh and credit development in the banking network. So, we've seen about half of the large banks in the United States start to extend credit against IBIT in the past six months. And a number of banks uh like Charles Schwab and City have announced they're going to start to custody Bitcoin and extend credit against it in the first half of 2026. So I think that the real story in 26 is banker acceptance of Bitcoin, willingness to custody it, trade it, and extend credit against it. And that should catapult the asset class to new levels.
And you know, this week, Bitwise CEO Hunter Horley argued that the four-year crypto cycle is over, and Fund Strat's Tom Lee made the same argument, saying that the classic four-year Bitcoin cycle was dead. What is your reaction to that? Do you agree?
Yeah, I think that the four-year cycles are based on the Bitcoin having and the Bitcoin having was really important for the first 12 years of the asset because uh we were cutting that the amount of Bitcoin that was being cut from the supply was very material relevant uh relative to the uh demand in the market. But right now you're seeing days when Bitcoin trades 50 billion or hundred billion dollars in a single day. The total amount of the having in the next having is going to be 225 bitcoin. So 225 bitcoin times even a h 100,000 a coin 20. It's $20 million a day is the impact of the having. And so $20 million isn't the first order impact on a $50 billion a day liquidity. It's not even a second order impact. It's probably a third order uh issue. The primary drivers of Bitcoin right now are are the structural developments in the market. For example, if the banks extend $50 billion worth of credit, right, that dwarfs 20 million a day in the having. And then um when the SEC uh loosen the restrictions on derivatives trading on IBIT, the open interest in IBIT went from 10 billion to 50 billion in a few weeks. So you're talking about tens of billions of dollars of demand for the asset based upon the embrace of the traditional finance establishment. and and so the the the asset class is being driven by the structure of of support in the banking industry and in finance and a few regulatory changes that are actually enhancing that support the asset.
>> Now I want to turn to digital asset treasury companies because many people I interview call you the OG. Back in 2020, Strategy made its first Bitcoin purchase, more than 21,000 Bitcoin for a total of about $250 million, I believe. And ever since then, other companies started to follow suit. But we saw this acceleration of that, especially this year. And so, I'm wondering, do you view these digital asset companies as competition? Are you fased by this at all? Obviously, you have a massive head start or do you see all the copycats as a form of flattery?
>> Yeah. Well, you're right. We were the first and then there were a handful and then about a year ago there were 60 and then there were 120, then 180 and and now there's more than 200. Um, generally I'm a big proponent of any company uh holding Bitcoin as digital capital on his balance sheet. I think that's good for the company and that's good for Bitcoin. That's good for the crypto economy. Our business has evolved from a company that simply owns Bitcoin uh to a company that that issues digital credit against the underlying Bitcoin. So today we're the largest issuer of digital credit in the world. If thousands or tens of thousands of other companies buy Bitcoin, that will be good for Bitcoin and good for our business. So it's helpful. Um out of those 250 uh crypto asset companies or crypto treasury companies, only a couple are in the business of issuing digital credit. Um examples would be Strive that issued a treasury credit instrument about a month ago. And then MetaPlanet, the biggest uh Bitcoin holder in Japan that actually just issued their first digital credit instrument. So there's three of us that are in the digital credit market. There's probably two to 300 that are holders of crypto assets. It's all good for the crypto economy. They'll all benefit. But the exciting thing in the market right now is digital credit.
>> Now, your strategy of accumulating Bitcoin made strategy the best performing company for some time and many other companies followed suit. But why do you think we're seeing so many deaths arise specifically now? um before November of last year before the red sweep uh there was a lot of uncertainty over the asset class and so I think a lot of publicly traded companies were afraid to go into space. Um we have a very supportive administrative administration. Um the president has designated Bitcoin as digital gold. Uh the secretary of the treasury has said we want to be the crypto capital of the world. Donald Trump said, "We want to be a Bitcoin superpower." So, we're the first year of institutional adoption. And in 2025, you got the support of the SEC, the support of the CFTC, the support of the Secretary of the Treasury, the support of the President of the United States. And so, normally, public companies are very riskadverse. Uh and with all of those supportive moves by the administration combined with uh the accounting profession rolling out fair value accounting which was a very big deal. Um fair value accounting means that when you when you generate gains you're allowed to mark them up on your balance sheet. And before that point uh you could only take losses. You can never take gains. So the accounting was reformed and and the regulators began supporting the asset in the year 2025. And I think that once those two things happened, it became pretty clear that it gave a structural competitive advantage to a public company to have Bitcoin on their balance sheet because Bitcoin is has been growing 50% a year for the past five years. And so all things considered, if you're buying Bitcoin, you're buying the the world's dominant digital monetary network growing 50% a year and the alternative would be to hold something growing 5% a year.
So what's your outlook for DATs in 2026? Do you think this momentum will continue or do you think that this trend will kind of fizzle out a little bit?
>> I think that generally uh public companies will start to buy more digital assets and hold more digital assets on their balance sheet and I think that Bitcoin adoption is going to spread and that will be good for Bitcoin and that will be good for those companies. I think the real story going forward is going to be digital credit. If you think about the perfect product, the perfect product is a is a bank account that pays you 10% when the money market's offering you 4%. And so if you can offer people 600 800 basis points of additional yield over the risk-free rate, whether it's in the euro, the yen, or the dollar, then everybody's reaction is, "Yeah, I want that. What's the catch?" And so I I think that the real interesting idea is that digital capital, which is what Bitcoin is, is powering digital credit. And digital credit is two to four times more compelling than traditional credit instruments for people that want fixed income.
>> So on top of seeing the rise of debts this past year, we also saw this IPO boom related to crypto companies. We saw Galaxy Digital go public in May, followed by Circle's Blockbuster IPO in June. Uh we saw many others, American Bitcoin, one example, in September, followed by Gemini. So what's your reaction to this crypto company IPO boom and do you see it continuing into 2026?
I think this current administration has decided they want to embrace digital assets, digital finance, digital capital, digital innovation, digital intelligence. And so you have a very progressive administration, a progressive set of regulators. And the combination of that progressive leadership with constructive legislation like the Genius Act which legitimized stable coins opened the way for all these crypto exchanges to come public and for the successful circle offering. I think that you know what you want is a set of regulators that want to see thousands of companies launched and see hundreds of billions of trillions of dollars of value created. And you know, you you've either got that or you've got a very regressive regime which is more concerned about something going wrong and they tend to damp out all that innovation or or block those IPOs.
>> So strategy was a way for people to get access to Bitcoin at a time when we didn't have any of these crypto companies going public and when we didn't have these investment vehicles like spot crypto ETFs. But now we're seeing a lot more of these investment vehicles arise. We just saw the first ever spot litecoin ETF, spot hideera ETF, spot XRP ETF, and obviously there are many spot bitcoin ETFs. So what makes people want to invest in your company in strategy versus one of these other vehicles? What's the investment case there?
>> There are two hemispheres to the digital assets industry. One side of the assets industry is based on Bitcoin. It's digital capital and the killer application is digital credit, a bank account that pays you 10%. Okay. My my company strategy is on that side of the business. We're just offering credit instruments. If what you want is to hold digital capital, digital gold, and you want to hold it forever, or if what you want is to invest in digital credit, you want that kind of amplified exposure, you would buy our equity. Um, the other half of the digital assets economy is digital finance. And the killer application of digital finance is tokenized currencies like stable coin or tokenized securities or tokenized memes or tokenized brands or or capital raising etc. And that tends to that tends to have uh exploded over the past 12 months that because a very supportive crypto administration has encouraged all of those things to grow. So if what you want to do is invest in digital finance, you would, you know, have to decide which of those networks uh you think is going to be the winner and you would do that's a tech investment. But if you're more of a credit investor or a capital investor, then you would want to invest in digital capital or a company like mine.
>> Peggy mentioned stable coins. Arc Invests Kathy Wood recently lowered her price target for Bitcoin, saying that in part stable coins are to blame because they're stealing some of Bitcoin's thunder. Do you agree with that assessment? And if that is in fact the case that stable coins are in fact gaining market share, what's the role for Bitcoin in the financial system?
>> I think she's alluding to her enthusiasm for digital finance, which is about tokenizing currencies, but I think that there are separate opportunities. Um, people that are uh that are excited about stable coins are focused upon payments technology. How do I move money at the speed of light? Or h or how do I improve the visa network or the Mastercard network or the traditional banking system using digital technology? The value proposition of Bitcoin is digital capital. It's someone that wants to uh to store their value for the next 30 years. So if you think about it, you don't know of any billionaires that are going to sell everything they own to buy US dollars and put it in a safe as I So you don't really have currency. currency is the dollar competing with capital. Stable coins are digital currency. It's a it's a different industry. Bitcoin is digital capital. Bitcoin is competing with gold. It's competing with real estate. It's competing with public equity, your your MAG7 stocks or your S&P index or private equity. And uh and people that have always owned those capital assets in the 20th century and they're thinking they want to own digital capital. Uh, stable coins on the other hand, they're competing with traditional credit card networks or traditional banking networks and they're offering people with digital payments technology all around the world. Ultimately, the big winner in the stable coin movement is going to be the US dollar because what it means is that every foreigner will be able to use dollars instead of using pesos, boulevards, rubles, CNY, euros, any African currency, the rand, etc. So the dollar is the winner. the US is the winner and then the technologists that enable and host those digital dollars, you know, are going to be successful companies.
>> Now, nobody's arguing that Bitcoin is going anywhere, but there is that argument that altcoins have no utility and might not stick around. And yet, we're seeing all these spot altcoin ETFs arise here in the US. So is there a risk to Wall Street if the tides turn and things change? Also because we're seeing that's associated with altcoins as well arise here in the US.
>> Well, there's there's thousands of ETFs and there's tens of thousands of public securities. As I was saying that the distinction here is there's a digital finance economy built around proofofstake networks and all of these altcoins. It's a very competitive business, but it's very exciting. A lot of people are interested in it. It's it's the networks and the exchanges you'll use to tokenize currencies, to tokenize brands, to launch meme coins, to tokenize securities. Uh that's an evolving business. It's competitive. You're invested in it. You need to be a sophisticated tech investor to understand it. And the future of that business will be largely determined and channelneled by the out out uh by by the resolution of the Clarity Act, which is the next big piece of crypto legislation that we expect to come in the first half of 2026 at this point. So, it's happening. It's complicated.
>> I'm assuming now first half of 2026 because of the longest government shutdown in history kind of delay things. But what are you hoping to see as it relates to crypto market structure on Capitol Hill? What are you hoping ultimately becomes a law?
>> Well, I think everybody in the industry is looking for clarity. They're they're looking for some uh some clear path forward. How how do I tokenize my security? How do I tokenize a currency? How do I raise capital with crypto tokens? What kind of decentralized or digital finance can I engage in? what are the rules of the road? And I think that's what we're expecting to have resolved in the Clarity Act.
>> Now, I want to turn to institutional adoption and focus on that before I let you go. But just last month, one example, JP Morgan announced that it plans to allow its institutional clients to use Bitcoin and Ether as collateral insecured loans. Is this something that strategy might utilize given you are in fact the largest corporate holder of Bitcoin?
Our business model is to issue the credit. So we're selling public credit like STRC and STRD, STRF and we've sold about 8 billion dollars of that public credit. So we will issue billions then tens of billions of dollars of public credit and our Bitcoin is the collateral backing that credit. So that's our business. I think the formation of bank credit networks around Bitcoin is very auspicious. It's very good for the asset class. Um if if banks would not give you a loan on real estate, your real estate values would be lower. And if banks were unwilling to give a loan on a stock portfolio, then that would impair a lot of people that want to invest in stocks. The banks are moving into offering credit on digital assets and especially on Bitcoin. That will be good for the banks. That will be good for Bitcoin. And it's merely an acknowledgement that there's$2 trillion dollars of wealth that is unbanked right now. And this is the banks uh beginning to move into this new asset class and provide banking services to the$ two trillion dollars of holders.
Final thought, what's your outlook for institutional adoption of crypto in 2026?
>> I think it'll continue progressively. I think I think that the that um there are very positive moves there. There's good positive guidance from the banking regulators right now directing banks to to begin to support Bitcoin. There are really good moves from the banks. They've all announced they're going to begin to custody and hold Bitcoin. That helps. I think there's some positive guidance uh coming from uh Basil and the Basel working group that they will start to upgrade the collateral value of Bitcoin for for uh bank balance sheets. That will be very helpful. So, I think that all of those things will generally accelerate institutional adoption. that every single month that goes by, there are more large institutions that come out in favor of digital assets and Bitcoin in particular. And and every single time one of them announces that, that catalyzes another to consider doing the same.
Michael Sailor, founder and executive chairman of Strategy. Thank you very much for sitting down with us here in Palm Beach, Florida.
Thanks for having me.