Michael Saylor: How To Get Rich With Crypto (Without Working Hard) | E172

I lived through seeing our stock go to 333 and I watched it go to 42. In 2000 you lost $6 billion. That wasn't the worst of it. That was just in one day. The worst of it was a couple years later when the stock had gone from $100 down to 42. Calculate that. It's like 99.8% draw down.

Michael Sailor, the founder and executive chairman of Strategy, the world's largest corporate holder of Bitcoin and a leading voice in the future of digital capital markets. Sell the kidney if you have to, but keep the Bitcoin. The Bitcoin is a stronger form of capital preservation than your house, bar of gold, a bunch of silver. When it comes time to sell something, sell something else. Don't sell the thing that will make your children's children wealthy. I could have been the richest guy in Florida, but my great great great grandfather wanted velvet in his horse and buggy. Dude, sell the horse and buggy. Keep the Bitcoin. There's no second best crypto asset. There's only one crypto asset and that's Bitcoin.

You still believe the same?

I do. Human civilization settles on protocols. We're speaking English cuz all the rich powerful people speak English. There is no second best language. The human civilization settles upon the highest powered money. And Bitcoin is the most thermodynamically sound because it's like worth $1.5 trillion.

Where do you think the Bitcoin price would be trading today if Michael Sailor never had his aha moment and didn't dedicate his life to buy as much Bitcoin as possible?

My view is Bitcoin would have been successful without me and without our company and if we hadn't done it, someone else would have stepped into that role. But, you know, presumably somewhere between.

Hi everyone. This is the little bit that I know none of you like that can help us make a huge difference for this show and we want to take it next. 71% of the people who regularly watch When Shift Happens have not subscribed. And so all I'd ask you if you want to make a huge difference is the following. If you've seen this show before and you like it, help me, help my team, hit the subscribe button and we'll continue to build this show for you. Thank you.

How are you doing?

Awesome.

That's that's what I love to hear.

Awesome. Is there any day you don't feel awesome?

No, I generally feel pretty good most days.

How do you do that? Tell us.

Um, get out in the sun, enjoy the sunlight. We live in sunny southern Florida and so on a day when the sun's shining, that's a good day, which is pretty pretty much every day here. It's it's pretty amazing.

Yeah, I think so. Lately, certainly. Get some exercise, have a cup of coffee, and then uh and then do something constructive and cheerful with my life.

What kind of exercise do you do?

Uh mixture of running and calisthenics and

Okay, nice.

pull-ups and light weights.

Is this something you've done all your life or something you started?

Yeah, as long as I can remember.

Nice. If you had to explain what it is you do and why you do it to Rick, a 40-year-old Uber driver who has been working hard for decades but can't seem to make enough to buy a house and raise a family. What would you say?

Uh I'm the chairman of a publicly traded company named Strategy. Uh I founded it when I was 24. We went public on the NASDAQ in 1998. We're the world's largest holder of crypto assets. We're the largest holder of Bitcoin in the world. We own about 818,000 Bitcoin. So the company itself is uh akin to a reserve bank for Bitcoin. We have something depending upon the given day of the week 65 to 70 billion dollar worth of capital and then we use that capital in order to issue credit instruments and and we sell a credit instrument called stretch or STRC that is a preferred stock and it pays 11.5% uh dividend yield right now as a monthly cash payment and it's a return of capital which means that uh You're buying an instrument that trades close to $100 a share with, you know, very low vol a little bit more volatility than a money market, but much less volatility than a a common equity stock. And you collect 11.5% and you defer the taxes on it until you've collected all the principle you've invested. So you invest $100, you collect $100 of dividends over the course of about nine years. You defer the taxes on it. And so that makes it I think uh one of the most interesting credit instruments in the world. It's become the most successful preferred stock in the world. It's it's the fastest growing credit instrument in the world. And uh it's built on Bitcoin. The only reason we can create um a credit instrument that pays 11 a.5% is because we have the highest performing capital asset in the world to power it. Um so in essence we're in the business of creating digital credit and that digital credit is uh is meant to be an alternative to people that believe in digital assets that want the equivalent of a digital money market that pays them 11 a.5% tax deferred instead of the traditional money market that pays you three and a half% and is taxable.

What's your advice to Rick?

Uh my advice would be that you want to uh buy assets that are going to outperform uh the the uh monetary inflation rate. So if you're getting paid more than 7%, which is about the US dollar debasement rate over a 100 years, then you're going to get wealthier. If you're uh getting paid less than 7% on your investments, you're getting poorer. If um if you're looking for something, if you want to outperform dramatically, there are different ways to do it. One way to do it is digital capital. You can buy Bitcoin. It's about 40% ARR 40. It's like getting on a roller coaster, but uh but people have made more than a trillion dollars on that roller coaster over the past five years. So, it's been a very big wealth generator for crypto investors. Another thing you can do is you can uh buy digital credit. I mean, I I wouldn't hold my money in a bank that pays me 0%. That's not very compelling. I think if you put your money in a money market and you'll get 200 basis points after tax, it's not very compelling either. 2% is not going to get you anywhere. So, I would look at digital credit, you know, or or some digital credit strategy if you want to compound your wealth in a comfortable fashion.

Who are you?

Um, I grew up in an Air Force family. My father was a career non-commissioned officer, chief master sergeant. I lived on military bases my entire life. I lived in Japan. I lived in New Zealand. I lived in Nebraska. I was born in Lincoln, Nebraska, dead center of the United States. Uh I lived in Florida. I kind of went to high school in Ohio. I was uh first in my high school class. I got a scholarship from the United States Air Force to go to MIT. Uh I couldn't afford to go to college if I didn't have the scholarship. So I appreciate uh I appreciate that the United States government financed my education. I went to MIT. I got a degree in aerospace engineering. Uh studied spaceship design. Uh I also studied uh the history of science. I was very interested in computer simulation. I got a job for a couple of years after I left MIT as a consultant. Um I started my own company Micro Strategy. We took it public as I was saying about eight years after we started it. We uh we became the world leader in business intelligence software. We sold software to help corporations think better everywhere in the world. Um, you wouldn't have heard of us because it was kind of an enterprise offering, but we got to be a about a billion dollar company doing that. Um, with about 2,000 employees. And then in 2020 when COVID hit, when the lockdowns hit, uh we became very frustrated and desperate because we thought that our business would eventually be amalgamated or bought by or overrun by Microsoft and we didn't find a way through. And because of our frustration and desperation, we started looking for a way out of the box. We discovered Bitcoin. We bought $250 million of Bitcoin. Then we bought another 250 million and then we raised a billion and then two billion and then eventually we bought $62 billion of Bitcoin and uh we bridged the enterprise uh the the traditional Wall Street markets of equity and uh bonds and credit instruments with the crypto economy and we became the world's biggest Bitcoin proxy. I think right now about 100 million people are beneficiaries of MSTR common stock and they kind of got their Bitcoin uh investment exposure through MSTR common. We became the biggest issuer of bonds of convertible bonds in the world. Then when we outgrew that market, we became an issuer of preferred. We became the biggest issuer of equity in the United States. Uh and then we became the biggest issuer of preferred equity in the United States. So I, you know, I would say I'm an innovator. I've always wanted to make a constructive, you know, contribution. Uh, I didn't want to be stuck in a box. Uh, you know, I didn't I didn't want to hit a dead end. And, uh, I've tried lots of things. Some of them worked, some of them didn't work.

But ultimately, you know, when we discovered Bitcoin, uh, we found, uh, a solution to our problem. I call Bitcoin hope. Bitcoin is hope and I think we found a solution to billions of other people's problems. And so, so today I'm a very enthusiastic advocate of Bitcoin, a very enthusiastic advocate of digital assets, digital technology, digital transformation, uh digital intelligence. I used AI in order to create these digital credit instruments. And I'm kind of on a mission uh to advocate and educate the world on digital assets and how they can empower everyone everywhere to live a better life.

Quick one. I want to thank our partners who help us make this show possible. Thank you, Treasure, my favorite cold wallet to store my Bitcoin and crypto and make sure I sleep well at night. If you want to sleep well at night too, you can order your Treasure wallet with my promo code WH10 and get a 10% discount. Check out my Treasure link in the description down below. Big thanks to my good friends at Bitwise Asset Management for backing today's conversation. Bitwise is a global crypto asset manager with 11 billion in client assets and more than 70 crypto solutions. That includes ETFs, index funds, SMAs, custom option strategies, staking vaults, and more. However you want to invest in crypto, the experts at Bitwise have you covered.

You said you wouldn't have heard of us regarding MicroStrategy. Well, actually I did because in 2015, I built a small business intelligence consulting company, consulting and implementation because it was the beginning of this Microsoft cloud push, PowerBI, all that stuff. And I was like this is a massive opportunity and so we're going to sell these services to Selfridges in in London and they told us ah we have this business intelligence software called MicroStrategy so that was 2016 so I knew about it.

That was my life's work for 30 years before Bitcoin. I invented and designed it and we uh you know we created version after version and we sold it everywhere in the world. I'm probably circle I used to circle the world every you know every six months I would fly to 25 different cities and we would meet with everyone and it was a it was a good business it still is by the way we still operate it's a a profitable business it's just not a hypergrowth business it's very hard to grow 20 or 30% a year when you compete against Microsoft and they have PowerBI every customer on earth is their customer they can bundle your product into their product or they can create features and I think a lot of people discovered it like Zoom discovered it and Slack discovered it and and the like and so uh it is what it is. We all have to find a way through you know and and overcome our challenges.

There's a common pattern amongst my guests. They have something that happened in their life sometimes a childhood trauma that explains their exceptional achievements and success. What happened in your life that explains the fire in the belly that you still have at 61 years old?

Well, I guess two things. One, uh, my parents wanted me to be well read. And so when I was a child in first grade, they offered me a dime, 10 cents for every book I read. And I had a comic book addiction. And it cost me 25 cents to buy a comic book. And I could not buy comic books unless I actually got money. And so I discovered that if I read books quick enough, I could generate enough money to buy a comic book. And I think one summer I read like a hundred books. The summer I would go to the library and I'd get 10 books and I would just spend all my time reading. And when I was reading I discovered science fiction and I discovered Robert Heinlein and Isaac Asimov and Arthur C. Clarke and I became very inspired. I mean the same authors that inspire Elon Musk and they inspire Jeff Bezos and u and one of uh Heinlein's book Have Space Will Travel which I think I read in third grade.

Uh which is what age for people who are not from the US.

Um, you know third grade you're like uh nine years old.

Yeah. Nine years old. Um, so I read it, you know, in third grade. I'm 9 years old and and the hero is uh he wins a competition and he gets a beat up spacesuit and he has to fix it. So he fixes his beat up spacesuit and he's standing outside in his backyard and he starts uh squawking uh to the heavens and then he gets an answer and a and another alien spaceship lands in his backyard, picks him up and says, "We have to run. You know, we're being attacked by the bug-eyed monsters." And he gets hauled across the universe. He discover he goes to alien worlds. He eventually has to advocate for the human race against the bug-eyed monsters. And he saves the entire human race with his virtue and his and his hard work. And then when he comes back to the earth, having saved the world from the bug-eyed monsters, his reward is a full tuition scholarship to MIT, the best tech school in the United States. And

I was a very impressionable kid. If you're an impressionable kid at that age, you know, if the idea is MIT was where you go, if you know, if you're a gallivanting across the universe and if you save the world from bug-eyed monsters and I figured it was good enough for him, it's good enough for me. I'm going to go to MIT. I'm going to design spaceships. So, I kind of got this idea, this inspiration to engineer things when I was young from the books I read. And then I think I would also give half credit, you know, you got to give credit to your mother because my mother thought, you know, you know, I remember when I was uh my first job was I'm a paperboy. I deliver papers, you know, it used to be people actually bought papers and someone had to deliver the paper and they were very heavy, you know, before the digital revolution. So you get up at 6:00 in the morning and you walk along around with like 40 pounds of paper and you deliver the paper to every door and you get paid like $1.62 like nothing, right?

So of course it's kids that do that. So that was that was the job that a kid could get. So I got that job and uh there's competition for the best paperboy in Dayton, Ohio. And my mother thought I should enter that competition and and uh, you know, I entered it and she told me I was going to be the best thing ever and I was gonna conquer the world and I think I ended up number two in the competition. Not number one but

best best would be the one who delivers the most paper.

You know, you know, you had to you had to put together this book of academic achievement and musical achievement and character and community service and

they're all, you know, they're all these things. And so I can I can imagine my mother is grooming her son, you know, to be the greatest paperboy in Dayton, Ohio. And she's telling me, whispering my, "You're going to do great things. You know, you're going to you're going to conquer the world." And I kind of had got this idea in my head that I guess I was expected to be successful. and and, you know, looking back on it, I realized she really had no reason to think that I was going to be exceptional, you know, at that age, but she uh imbued it in in my head and she programmed me and, you know, whatever your parents tell you you can be or what you should be, you start believing. And so I guess my parents believed in me. I had inspirational figures and I was inspired by literature and that led me to think, yeah, I do. I can do things and I'm going to do things.

You going to conquer the world? Have you?

Well, you know, I got older and I realized that, you know, the world's pretty complicated place and there's a there's thousands of challenges to the world. And I would say today what I realize is you should choose the one contribution you can make. Like there's a hundred things not perfect about the world. Uh, I'm particularly interested in fixing the money, right? And so I'm thinking, uh, I can't fix every other problem. A lot of health problems, political problems, religious challenges, geopolitical challenges. You know, we'd all like to fly, you know, teleport and live forever. And someone else will work on those issues. Uh, I I think that if you're lucky enough to be put on Earth with a mission and you feel like you can make a contribution, do one thing, you should laser like focus on the one thing. And humility dictates that if you put all of your life energy, all of your focus on on making a contribution, doing one thing, become the expert in the world on the one thing, and you help enough people, that will be enough. And you should be happy and satisfied that you're able to make a contribution. If you go to my ex-profile, you see I've got laser eyes. And the the meme is, you know, you there's something you can do if you're going to be a good professional baseball player. It's enough to be a good baseball player. You don't have to be the world's best soccer player, basketball player, gambler, politician, actor, and singer. Right? And I think uh when people's ego get too wide and their ambition gets too broad, they they think I did one thing and I'm making a contribution. I'm good at one thing. That means I can do nine other things and I should. And my my phrase I leave you with is just because you can do a thing doesn't mean you should do a thing.

Yeah. I wrote it down because I heard it in your last podcast. When did you learn that? Because there's probably a time in your life where you have this crazy ego and you think you can do everything.

Yeah. In my 30s. In my, you know, in your 20s, you know, you're in business. You're first you're like, I'd like a job, right? And they're like, okay, I got a job. I'd like a good job. And you're like, okay, I'd like to get paid more. And then you think, I don't want a job working for someone else. I want to work for myself. Mhm. And then you think I want to start a company and then you think well I wanted to be a good company now, you know, I wanted to grow. And so at some point you go through this passage and in my life by my early 30s I had a company that was successful, we had a good product, we came public, you know, and at that point you start thinking, well, what's the next hill to climb? And so after I did that, I created a second product, a third product, another company. I created Alarm.com. I created Strategy.com. Then I created Alert.com. Then I created Emma.com. Then I created Wisdom.com. Then I created Usher.com. And the short of it is I tried to launch 10 other businesses because I had 10 other ideas.

Just when you mean successful in your 30s, the business going well. What does that mean? I mean it's public. What's the kind of market?

Public company worth a billion dollars, you know, making 50 million a year or something. Thousands of employees. And so after I'd done that, I could have focused 150% of my energy on cultivating that one business. Instead, I thought, well, I'll just launch this next thing. Alarm.com, by the way, is a public company today. Um, a multi-billion dollar public company. We, uh, I launched it, then we spun it off, and what I discovered is I can't manage the two, and I would [ __ ] its growth unless I let go of it. So, it it, uh, went off on its own. I created a business angel.com. We sold it for about $100 million, but we couldn't grow it. I, you know, so I had some singles. I had some doubles. I I had some strikeouts. I I launched some businesses that just did not work, right? And uh I I kept thinking, well, I'm just going to launch, you know, I'm the guy that's going to create 10 businesses and they're all going to be successful, you know? And there are a few people that have done it, right? Elon Musk has done it. Like the problem is, okay, the human race has one Elon Musk that did SpaceX, Starlink, and Tesla and X, but then again, there's like four other four four billion other, you know, alpha males in the human race and 8 billion other people and they didn't do that. And so sometimes you learn the wrong lesson from the most famous successful person. But the bottom line is here's here's a theme I see a lot of times. Uh entrepreneurs struggle in their 20s and then their 30s or maybe their 40s. They get that first big dose of success and then very often they think, well, now I've done this. I'm going to do six other things and and they go off and they start doing other things. And the problem is you dilute your focus. you get distracted and then you realize that it's kind of like um the existing business is difficult and you know all of the challenges and it's painful to work on it. So you want to go imag you want to create a new business because when you're launching the new thing it's not difficult. It's aspir it's like you're you're a father and you have a 25-year-old son and you're struggling and he's struggling and you know you're like, okay, well, my son's difficult. I'm going to have another son. My three-year-old son will be achieve everything that my older son did not achieve. Well, the three-year-old son's 18 years from disappointing, you know, right? I mean, the truth is you're still the father, right? You're the common element. So, if you have three grown kids and two young kids, the right thing to do is to fight really hard to work on those relationships with all your children. And and uh the the entrepreneurial mistake is I have a successful business now. It's getting hard. I'm just going to launch another business, reboot, start from scratch. Now, I have no customers, no competitors, no problems. I just imagine it will be better and of course, you know, the imaginary future business is always more fun than struggling with the existing mature business. So I would say in my 30s I expanded, you know, and you know mid-30s to mid-40s and then we did all these things and most of them they didn't end up being more, you know, none of them were more successful than the original MicroStrategy. So I get to 2020 and I'm back to the original business and we all we spend eight years working on the original business to make it better and refine it and make it more efficient and we do a thousand things and you know work a, you know thousands and thousands of man-years, but ultimately at that point, you know, you've got this global digital software monopoly that you're competing against and it's very challenging. So I I think I had been humbled, you know, by the time I was 55. You know, it's like 35 you can do anything. 45 it's not quite working. I'm just going to go back and do the one thing. 55 you're like, gosh, I wish I'd focused more. You know, when I was 35 and then I got the Bitcoin thing and and all this and here's the great irony. I had a billion-dollar idea in my 20s and we realized it with MicroStrategy. Then I had 10 other ideas that I thought would work and they didn't work. And then uh when I was 55, we discovered Bitcoin and that was somebody else's billion-dollar idea. That was Satoshi. So then I took someone else's idea, not my idea. I humbled myself and I absorbed the crypto community and the ethos of Bitcoin. And then when we plugged that into our company, that became another billion-dollar idea. And then we found. And then what we had was a third billion-dollar idea with convertible bonds and a fourth billion-dollar idea with with equity registrations. And then we get to 2025 and we had AI and we had digital capital. So digital intelligence and digital capital. And in 2025, we launched a billion-dollar IPO with Strike in January. Launched another billion-dollar IPO with Strife. Two months later, launched a third billion-dollar IPO. Two months after that with Stride, launched another uh IPO with Stretch, which became two and a half billion. And now it's 8 billion. You know, we And so in that one year, it's like billion-dollar, billion-dollar, billion-dollar, billion. All of a sudden like five or six billion-dollar ideas are coming like this. A, you know, after I had got to the end of my career, been humbled and realized that you can't do it by yourself. You can't lift yourself with your ego. You have to humbly submit yourself to the world and you have to say, you know, how do I how do I latch on to some other energy and the the crypto community, the Bitcoin network, the digital transformation of assets and capital. And then when you when you put your ego second and you embrace what's new, digital capital, digital assets, digital intelligence, now you can actually do things. And of course, we're doing more interesting things in the last 12 months than I did in my entire career. And so I guess I'm a late bloomer. I'm like the Colonel Sanders of crypto. But it's okay. It's okay.

It's at least I found a mission at some point in my life.

Um, I am 34, so I'm going to listen to the advice and laser focus and not try a billion different things.

I tell it to a lot of people, but believe me, most just they nod and they're like, "Yes, yes." It's like when I was 34, you know, people older and wiser gave me advice which I just promptly ignored. It's very difficult, you know, but the truth is it is the best advice I can give you, which is if you've got something that's working, focus.

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It's the same as don't trade, buy and hold. People say yes, yes, yes. They'll still trade and then after one, two, three years, they realize, oh [ __ ] had I just bought and held, I'd have so much more Bitcoin right now.

When did you first discover the concept of scarcity and low time preference?

I think I've always understood the idea of long time horizon because at MIT I built uh nonlinear dynamic computer simulations and I studied engineering and uh control theory and in in those nonlinear dynamic systems they're feedback and one of the most important parameters is the time constant of the feedback. So there are certain like for example algae in a pond if it's doubling every day and it fills up the pond on day 30 when will you notice you have any algae, right? And so the time constant or the life cycle, you know, in dynamic systems how long does it take for deer or wolves to breed, how long does it take for for algae to grow, how long does it take a virus to spread in your body, all of those things figure prominently in sophisticated dynamic simulation models. So, so that idea of um of time constant is important and it was and I wrote my um my thesis in MIT uh a mathematical model of a of a Renaissance Italian city state where I actually created a computer simulation of Machiavelli's discourses and the discourses describes uh the dynamics of government when you have a judiciary branch, a legislative branch and an executive branch and if the judges serve for life, they have a long time constant. And if you change the legislative branch every two years, it's a short time constant. And if you have the Senate and it's every six years, it's a longer, more conservative time constant. And if the executive is a ruler, a king and rules for life, that's a very long time constant. But if they're elected for four years, it's a shorter time constant. So I actually programmed that and on a computer and I actually showed all the dynamic patterns under which an econ a political economy melts down or whether it thrives and you know, and that was interesting to me. It was always with me. I understood if you, for example, if you have a longer time pre a longer time uh preference or or um a lower time preference but a longer time uh uh time horizon than your boss, you're doomed. Like say you're running a company and you want it to be successful over four years and your boss gives you 12 weeks. It's like and he checks you in 12 weeks and fires you if you haven't got, you know, cost down and the ratings up in 12 weeks. It's hopeful. You can't have a four-year plan when your boss has a four-week plan. So, you have to learn uh about time preference and and time horizon and and anything you're doing in life or business, you have to have the right time horizon. And and of course, you know, the traders have a time horizon of four days or four weeks. And anything that I do, I think four years is short. And in business, I've never seen a good business that was successful in less than four years. And uh generally most great businesses, they worked on them for a decade, like very hard. So um I kind of had a good uh a good feel for that. What was the second half of the question? You asked me about time preference.

Scarcity.

Oh, scarcity. Yeah, scarcity uh didn't understand nearly so well before I discovered Bitcoin, right? I mean, I had, you know, I the truth is uh I'm not a stupid guy, right? I was first in my class and I was the top of my class at MIT, but I didn't really understand money and I didn't really understand monetary scarcity or true scarcity until I discovered Bitcoin. I was given a gift in 2020 because when uh when the Federal Reserve lowered the interest rates to zero, they literally took the interest rate to zero and they said, "We're not even thinking about raising interest rates." I had $500 million of cash. And what happened is is cash became not so scarce. Currency was not scarce. It's like the banks could print money. The Fed was going to print money. We printed money to fund everything while we shut down the economy. And that was jarring. You know, that's a very disturbing situation. And that shook me out of my lethargy and it forced me to think really hard about what is money? And uh, you know, I I recorded this podcast with Robert Breedlove in late 2020 and he had and his question to me was what is money? And I thought we'd talk about it for an hour. We ended up talking about it for like 25 hours. It it became a long-running series of of discussions and and um you can't really understand scarcity until you've seen actual engineered scarcity. So if you think about think about money, the the sound sound money was gold for thousands of years and gold is not really scarce because it's it's relatively scarce that is uh it's harder to make gold than it is to print paper or seashells or glass beads, but it is actually inflating at 2% a year and so that means that every 35 36 years you double the supply and so you know, in theory, gold actually in a way is is inflating much more uh than say beachfront property in South Florida. Like if you look at Palm Beach real estate, they're not doubling the length of beach in Palm Beach every 36 years. And when you think about money, our currency over a hundred years, we're increasing the currency supply in dollars about 7% or more. I didn't realize that, you know, I didn't think about it. And then when uh the lockdowns came and when interest rates went to zero, I had all this money and it's like if you had a building and someone was paying you $25 million a year in rent and a politician said, "We just rent controlled your building. Now they're going to you're going to offer the building for free and you're going to pay zero in rent for the next decade or so and you're going to like it." That's you'd be irked. You'd be like, "What? I used to make 25 million a year and now I make zero million a year because I supposed to like do I'm supposed to do it for the good of the people." You would probably sell the building and go take your money somewhere else where you're allowed to charge rent. Okay. And uh that's kind of what happened to us. We were making 25 million a year and then all of a sudden we're making zero a year and and the Federal Reserve is saying you're going to make zero a year forever. And that forced us to look for something to buy. And we thought maybe we should buy some gold or maybe we should buy some real estate. But uh eventually I thought maybe digital gold. I wanted something that was as good as gold but like a big tech monopoly. Can I find like the Facebook for money or the Google of money? And that was Bitcoin. So I thought well Bitcoin is the dominant digital monetary network. And I started studying it. And it turns out that Satoshi put this one clause in in the Bitcoin protocol, which is it's hard capped to 21 million. I mean, it didn't have to be. They could have said it increases at 2% a year. And if it increased to 2% a year, it would double in Bitcoin supply over 36 years, but it hardcapped and increases zero a year. And here's the big aha moment. This is the only commodity in the history of the world that actually was absolutely scarce. Silver's not. Gold's not. Palladium's not. Diamonds aren't. Even land isn't. If you study a map of land in Boston, they added half of it. And if you look at Miami Beach, half of Miami Beach is reclaimed swamp land. We actually built the land. So, I'd never seen absolute scarcity before Bitcoin. And then when I saw it though, I had a I had uh an education as an aeronautical engineer. I knew thermodynamics. I knew what it means to have a closed energy system, an adiabatic system. I understood adiabatic lapse. And then I said, well, this is a thermodynamically sound a conservative energy system. There is no heat loss. There is no energy loss. And then I real once I saw that it became obvious to me why that's rational because in engineering you can't solve a problem unless you assume an adiabatic system. You have to assume a closed energy system. And so in all of my engineering days they would say design an aircraft wing and analyze its performance assuming adiabatic, you know, system, right, a closed system. An open system, by the way, is, you know, your plane's working fine and then I shoot it with a laser beam or I zap it with a lightning strike. You can see why that's a a special thing. Or, you know, if I have if I have a leak in this room, that's because all the oxygen drains out of the room, and when it does, we all freeze. We probably suffocate before we freeze to death. So when you're designing the studio, you're thinking, I really kind of want a closed system, you know, that doesn't have a heat lapse because otherwise we're going to suffocate or freeze to death. So it's kind of common sense. You don't want to freeze to death. But people take it for granted. So now once I saw Bitcoin, I said, "Hey, that's actually a monetary network that doesn't lose 2% of its energy a year like gold." And then I thought, well, wait a minute. That means that the dollar is losing 7% of its energy a year. Now I know what halflife is. Half, you know, if you're losing 7% of your money a year, that means the halflife of your money is is uh you divide seven into 70, it's 10 years. You're losing half of your energy in 10 years. Your halflife in gold is 36 years. Your halflife in the dollar is 10 years. Your halflife in a weaker currency might be five years. What's your halflife of your of your wealth if there is no lapse? If there is no leakage. Okay, it turns out it's infinity. The difference between 2% inflation and 0% inflation is 72 / 2 36 years or 72 divided by 0, infinity. And so the question is, do you want to live forever or do you want to live for well, half of you is dead in 36 years and you know, do you want to live a hundred years or do you want to live forever? And u at that point that was the big light bulb moment when I was like, oh my, this is not just a little bit better than gold. Gold is a lot better than cash, but this is infinitely better than every other capital asset or monetary asset invented in the history of the world. And I thought this is a revolution in economic thinking. And you know, once you understand that, you know, it's it's kind of like I give you electricity. Electricity is colorless and odorless and incredibly powerful and it runs this and it runs that, your lights and it works your washing machine. And try to imagine a world before we could before we could transmit like clean infinite silent efficient power. It's like it go back to 1500 and imagine being an author and trying to describe energy when you'd never seen electricity. Well, every economist had never seen Bitcoin. So, how do you understand economics if you never saw perfect money, perfect economic energy, where Bitcoin means you can move economic energy through time and space with zero energy lapse, right? Like light, electricity, it it's a beautiful thing, but no one had ever seen it. And so, Aristotle couldn't imagine it. I mean, you know, did Aristotle imagine electricity? Why didn't he write about it? You never seen it. But after you've seen it, it's obvious. And you know, then you can't unsee it. It's just it turns out that you have to have some with a paradigm shift. They say there has to be some near-death experience, right? There has to be a war or a near-death experience or like the the older generation, I think Max Planck said, he said, "Science advances one funeral at a time, right? The old guard never will appreciate the new thing. They won't get the paradigm shift. They don't need to. If you've got money and power and fame and success and respect, why do you need to embrace a new idea? The people that need the new idea are the 20-somethings, the 30-somethings. It's young people that have everything to gain, nothing to lose. And by the way, if you do it the way your parents did it, you're going to fail.

Well, that's what we're that's what we're talking about. I mean Rick is 40 years old Uber driver but actually our entire generation, right, 25, 30, 35 cannot afford houses like this is the the entire problem here and and that's exactly what we're talking about. You you mentioned before, I want to find the Facebook of money, right? So basically you're you're you're thinking in terms of heuristics and previous experiences and it doesn't come come out of nowhere. You have previous experiences in the 1990s. You said, "I didn't really understand the scarcity until I found Bitcoin." But you actually understood digital scarcity in the 1990s already when you bought some domain names, at least part of it.

Yeah, I understood valuable property. M Uh, I for example, you know, '94 we all started using email or something like that and the web was coming along between '94 and '96 and we got the domain MicroStrategy and so I was like Sailor at MicroStrategy and everybody misspells MicroStrategy, they call it Micro Strategies or MicroStrategy or whatever they can't they don't say it, they can't spell it, they can't remember it. And Uh, and so I thought, wouldn't it be better if we just used an English word, strategy? So I said, "Hey, see if you can buy strategy.com." And so we went off and and they said, "Yeah, we can buy it." It's like, I don't know, $50,000. I don't know, not that much money, but a lot of money back then, but not much now. And then I thought, you know, wouldn't it be great to buy words in the English language that everybody knows how to spell and they can remember? So I said, go find all of the good words in the English language. And so we bought wisdom.com and we bought usher.com and we bought speaker.com and we bought voice.com and we bought angel.com and alarm.com and then I thought, hey, go buy mike.com and I said, is michael.com and then I bought michael.com. So like today my website is michael.com and I thought I, you know, I didn't ever think I would be famous enough to need it. I I kept waiting for Michael Jackson or Michael Jordan to want to buy it from me. But, you know, eat your heart out, guys. No, I'm Michael.com. And so, I bought Yeah, I bought Emma.com. You know, I bought frank.com. And my idea was, you know, how there's Amazon.com, you know, it's like you pick an easy word, a word that people can, Apple.com. Yeah. You got how many billion people learn English? And my thinking was English is a protocol. Everybody learns it. They spent like 12 years learning what the words mean and how to spell the word. And so the best brand if you want to brand a business is um I bought hope.com. You know, how do you feel when I say hope.com, you know, probably good, right? I mean, hope, it's a good word, right? And um and so

I thought, well, these will be kind of, they're good intellectual property, and maybe one day we'll put businesses on them, or maybe somebody will buy them from us. And eventually, I sold Voice.com for like $30 million bucks.

"Both for how much?"

"Few hundred thousand."

And it was, you know, so we made some money, and we sold Angel.com for like $110 million. And Alarm.com we spun off for, you know, a large amount of money. So, some of them paid off. The others I still have. I still got Mike, and I still got Frank, and I still got Emma, and I still got Wisdom, and I, you know, we still got, you know, a lot of these.

And, um, you know, you know, Elon Musk, when he, he bought Twitter, he rebranded it X.com, and he had the X for like 20 years. He's like, "I want to use X." One letter. I mean, very powerful. Like, "How do you spell it?" "I think I know how to spell it."

And I think, you know, I understood that, and I understood digital monopolies, right? If you watch Apple, one thing I had was, I was a tech investor. So I invested in, yeah, my, you know, my first fortune that I made was building MicroStrategy, and we came public, I became wealthy, and then I had some money to invest. And then, and I invested in Apple, and Google, and Facebook, and Amazon, and, you know, and I thought, you know, "One day, a billion people are going to use the iPhone." So everybody else thought, you know, it was a, a computer techy device, and, and the handsets were going to be worth $50 bucks and get commoditized because the Nokia phones were like, really dirt cheap.

"Mhm."

And I thought, "It's going to be jewelry, and it's sexy, and people sleep with it next to their head." And, and if it becomes like jewelry, it's like LVMH Birkin bags or something. And so I was a big believer, and I thought they're going to build this digital monopoly, and they did.

"What made you feel that this would become jewelry?"

"There's this super famous video from 2012 where we basically say..."

Exactly that, right? But what made you feel or understand this is going to be a monopoly, and this is going to be a premium brand, and therefore it's going to become a compounding machine when, as part of a few other stocks, when all the rest is literally noise?

Yeah. Well, because I had, um, couple of thousand employees, and we had Dell computers under every desk, and they were big, and heavy, and noisy, and ugly, and cheap.

And commodity, you know, and nobody cared. And then we had like the iPhone, and, and, you know, my nieces, or, you know, you know, my friend, my girlfriends, they're like, "Okay, well, what gift should I get them?" And they're like, "Well, get me the pink iPhone." Or get like, "Get me the pink." I'm like, "What? Like, I don't..." You know, Apple would come out with the normal iPhone, and then the next year they would have the pink one. And, you know, my sister's like, "You know, your nieces, they want like the pink iPhone for Christmas." Like, "I have to like pay an extra $1,000 for a phone that's pink instead of a phone that's gray." Like, "Well, all their friends have it." And so like every year Apple would like, you know, remember Apple had orange computers, and they had...

And here's the thing. It's like, you're holding it, and it's like a status symbol. And it's, it's just like, you know, with Birkin bags, if you spend enough money, you might get permission to be able to buy one for $4,000. It's like, "What?" Well, uh, you know, a handbag is like 5,000-year-old technology, and somehow in the year 2026, people struggle to to pay thousands of dollars for a 5,000-year-old device because it's a status symbol.

And, uh, and the difference is, if you hold it, if you sleep next to it, if you've got it with you all the time, if it's part of your identity. And by the way, it's not, it's not irrational. I mean, you can't carry a, you know, a Dell computer around in your purse, right? It's too heavy.

But you don't need to. So, if it's a desktop thing and it's hidden in the background, it, you're not going to invest in miniaturization and style. But with the iPhone, it was clear. The battery matters, the style matters. Is it sexy? Is it cool? Is it orange? Is it, you know, they had the red ones. Do you remember that when red was really big, and you know, and Bono had a red iPhone? And, and if you were cool, and you cared about the world, and the, and the climate, you needed to buy the red one. And, um, I, you know, here's the big idea, which is, people have plenty of money. I, I mean, everybody can spend $1,000 a year on something. The issue is, did I spend it on a new, you know, shirt, new pair of shoes, a new iPhone? Here's what you're not doing. You're definitely not like replacing the industrial electrical plug underneath your work desk every year just to be hip.

And so when I saw that, it, I had this other observation too. I'm going to make this point, which is, I saw software dematerializing to the mobile devices. So, does the software run on your work desk computer and you use it from 9 to 5? Or does the software run on a piece of jewelry? Does it, does it run on your watch? Or does it run on your phone, and you're using it at 9:00 p.m. on a Friday night when you're out on a date? Or are you using it at a baseball stadium watching a baseball game? If the software is running at the baseball game, or if it's running when you're out on a date, and if it's running when you're in a car and you're on the move, right? It's kind of like software went from solid state to vapor state, you know, and at that point, it becomes... So, like, what good is it for you to be able to book a restaurant reservation at 9:00 a.m. on Monday if you need to go out to dinner on Saturday night? You want to book it on Saturday morning while you're at the gym.

And so, what happened during the mobile wave is people rethought software, and software became a consumer phenomenon, and it became a 24/7, 365 phenomenon, and it became a real-time thing. It's like, you want your software to wake you up, or like Uber, back to your Uber driver. You know, we didn't used to have Uber. And the thing that made Uber possible was the smartphone, because without the smartphone to call the Uber, and without the smartphone to link the Uber driver to the passenger, that doesn't exist. And so, so during the mobile wave, the software leaped from underneath the desk, and it leaped onto your person, onto your, you know, onto your clothing, and it, and it became part of you. And when it became part of you, you started to prioritize quality, you know, battery life, look, feel, you know, all the way you think about your shoes you wear, the purse you carry, the belt you wear, the suit you wear, and it became a consumer good.

So when I saw those things, it occurred to me that there's going to be a billion-person network, a mobile network. And Apple. The other thing I saw is all the rich, all the rich, powerful people were using iPhones. And so when you see that the affluent have this network, it's like, how much is it worth to own that network? Quite a lot. And then we saw the same thing with Microsoft formed a business network, and then Amazon formed a retail network, that last mile to hundreds of millions of households, and Google formed their network, and then Facebook. Facebook became the network, and nobody used any other network because everybody's on Facebook. And, and what occurred to me was, if there's a monetary network, you know, what happens when all the wealthy people in the money, all join the the network? And they're not going to put 20 friends on the network. They're going to put $20 million on the network. And there's going to be a massive Newtonian network effect, because billionaires are going to put a billion dollars on the network. You know, it's like, it's like I said, when Rupert Murdoch joins Facebook, he's bringing 50 friends. But if Rupert Murdoch joins Bitcoin, he's bringing $50 billion. And so I thought, man, what a great network to be part of. And you just got to find the one that's going to be the winner. And once you find the one that's a winner, then the network effects kick in.

Bitcoin is a lifeboat tossed on a stormy sea, offering hope, our favorite word, to anyone in the world that needs to get off their sinking ship. Those are your words. Can you explain?

If you live in uh Africa, there's not a single currency that works that holds its value, and the banks don't work very well. So, if you're the Uber driver in Africa, and someone wants to give you $50, if, if they give you $50 of BTC, it's going to appreciate probably 20, 30%, 30% a year against the US dollar. And when your local currency loses 10% a year against the US dollar, if you give that uh, you know, when your currency's collapsing 20% a year, the half-life of your money is three years. So whatever I gave you is worthless in 10 years. So if you want to store economic energy, you have to get out of that collapsing system. Uh, you can't buy any currency in a collapsing system. You can't buy a credit instrument or a bond in a collapsing system. You can't buy the real estate either, because the real estate is a derivative of the currency. And if no one's got any money in the collapsing economy, they won't be able to pay the rent, and the real estate won't have that much value. So you see this hyperinflation. Uh, it's come to Brazil, it's come to Argentina. About once every 25 years, it, you know, every single currency in Africa has collapsed. Um, uh, the German currency collapsed a couple of times.

You know, most currencies collapse. The most successful currency in the last 100 years is the US dollar. The US dollar has lost 99.9% of its value over the hundred years. And that's the best one.

Okay? You know, an acre of land in Miami Beach used to cost $10,000. The same acre of land cost $10 million today, maybe $20 million. So if you do the math, that's north of 7% collapse a year. And by the way, 7% doesn't sound that bad, but when you compound it over a hundred years, and I tell you you're going to start with $1,000 and you're going to end with $1 dollar. That's the best it's going to get. Now, now if that's the best it gets, imagine what it's like when you lose the wars, right? In Japan, they lost. In Germany, they lost the war. In those cases, it's not 99.9% in 100 years. It's 99.9% in 30 years or 20 years. So, how do you get off that sinking ship? You have to find a trustworthy bank. Well, there isn't a bank you can trust when the economy collapses. You have to find a trustworthy form of money. Well, the only form of money that's going to hold its value is scarce money. And so, what you buy, you know, what they bought in the Renaissance? They bought uh gold, and they bought paintings.

Mhm.

But then you better be able to get the paintings and the gold out of the country. And try to walk through the airport with a lot of gold or a lot of paintings, and maybe you'll get allowed, and maybe you won't. So the problem with physical assets as a store of value is that you hold them, you know, at the pleasure of someone more powerful than you. Everything you own in the physical world, you own at the pleasure of someone more powerful than you. And if they decide that they don't like you because of your race, or your religion, or because you have more money than them, or because you say something they don't like, or you're politically different than them, they just take all your stuff away. And that is the story of history. 10,000 years, 10,000 examples, right? Thousands and thousands and thousands of examples, you know, Muslims being disenfranchised, Jews being disenfranchised, the Christians, the Protestants being being uh, you know, disenfranchised by the Catholics, the Catholics being disenfranchised by the Protestants. Every place, everywhere, the minority uh finds that their property is seized at some point.

So, the issue really is, where are you going to put your money? And the answer is, you put it in cyberspace. A bank in cyberspace that's owned, that's controlled by nobody, that's owned by nobody, that no government can stop, that no politician can interfere with, that no company can corrupt. And, and that offers you money that's scarce, that you know, 21 million coins, 100 million satoshis a coin. You buy what you want. When it's time to leave, you take your money with you. When you, when you exit the country, when you exit the city, when you exit the state, when you, you know, you can have it with a custodian, but when you don't trust the custodian, you give it to a different custodian. When you don't trust anybody on earth, you take, you take self-custody. And when you're ready to depart this earth, when you die, you can take the money with you, too. If you have your private keys, you can literally take your private keys with you, and you can take it to the grave with you. That is a property right that is absolute and profound and unique in the history of humanity. You've never had that economic right. Not in a 100,000 years, not in any place, not in any time, not with any other strategy. Every other economic right is a, is a privilege you hold at the pleasure of the ruling class of wherever you live. And when they decide to remove that privilege, you'll, you will be impoverished. And I'm, I won't go into the details. I say, read history.

The more history you read, the more examples you will read of that having happened to somebody. And so, you know, I see Bitcoin as that lifeboat. It's available to anybody anywhere, right? For the first time in history. And that's what makes it so inspirational.

The only use of time is how do I buy more Bitcoin? Take all your money to buy Bitcoin. Then take all your time to figure out how to borrow more money to buy more Bitcoin. Then take all your time and figure out what you can sell to buy Bitcoin. And if you absolutely love the thing that you're doing and you don't want to sell it, go mortgage your house and buy Bitcoin with it. And if you've got a business that you love, because your family works for the business, it's in your family for 37 years, and you can't bear to sell it, mortgage it, finance it, and convert the proceeds into the hardest money on earth, which is Bitcoin. Buying Bitcoin with cash was not enough for you. You had to go to the next level and issue shares and debt and find every way to accommodate more dollars to buy more Bitcoin. And then you had to onboard the world with you. Why? If you're living in a hyperinflationary economy and the currency melt down melts down, the bank fails, you know, happened in Germany, it happened in Argentina, happened in Brazil. It doesn't matter how hard you work, right? People were, people were basically bringing wheelbarrows of money, 20 billion dollar, 20 billion marks to buy a bar of soap. So working hard and not thinking about monetary theory and not understanding uh money isn't a solution. Um, the ruling class would like you to work hard and not think about these things, right? But, but, um, if you want to create wealth or preserve wealth, it's not enough to just uh work yourself to death, you know, and I can give you lots of examples of that.

Now, if you look at the wealthy, you know, a wealthy real estate investor, they would go and get a loan and they'd borrow money at five or 6% and they'd invest it in a building, and they would generate a 10% return, and they would capture the difference. You know, if you want to make a billion dollars, you borrow a billion dollars. You, uh, you, uh, use it, uh, to build a building, you keep 80% or 100% of the equity. You put the rest, 80% of the building is debt. So maybe you have, um, a hundred, 1.1 billion building. And you find a way to raise a hundred million of equity, and you have $1 billion of debt. And then the money supply expands at 7%, and the building increases at 7% a year. And that means after 10 years, the value of the building's doubled. So in 10 years, you have a $2.2 billion building, right? And maybe you've paid, um, you know, a hundred million, few hundred million in, um, in interest, but you've now made $400 million in equity. And so you made $400 million in 10 years, or 40 million a year with other people's money, right? With, uh, with intelligent, uh, financing. Every real estate developer who's ever been successful anywhere that you've read about used debt financing to do that. It's, it's almost never an example where you see someone that says, "Oh yeah, I just kind of used equity and I just paid for it with my own money."

Um, with Bitcoin, Bitcoin's been appreciating about 40% a year for the past six years. In 2020, 2021, you could have got a 30-year mortgage for 2.7%. Or two, and people got 2 and a half% mortgages. So, imagine the government wants to give you money for 2.5%, and you can invest the money at 40%. If you could borrow a million dollars, then you're getting 37.5% of a million dollars a year. Okay. So, you're getting paid $375,000 a year to do what? To borrow money from the government and buy a scarce asset. Okay. So, how many people can make $375,000 a year after tax? How, how hard do you think you have to work, right, to make? You have to make $700,000 a year in New York, or $800,000 a year in New York. So, you can either work yourself very hard to make the money, or you can be an intelligent financier, and the government just gave you that. And, um, the world's full of examples of this.

Another example, like if you lived in Argentina, you know, the peso went from one peso to the dollar to a thousand pesos to the dollar over like 20 years. So if you had a million dollars and you kept it in pesos, right, you would have lost 99.9% of your money. So your million becomes $1,000. You managed to take a million dollars with the pesos and make it $1,000. Or if you just converted your pesos to dollars, swap the the collapsing currency for the stronger currency, you've got a million dollars, which looks like it appreciated, you know, by a factor of a thousand in local terms. So often times financial intelligence consists of trading the weaker capital asset for the stronger capital asset. And there are a lot of people that look like geniuses, you know, in South America, and there, and people say, "Well, what's your strategy?" Oh yeah, I just bought US dollar assets. It's like, you go to Miami, all these apartments, they're like owned by Venezuelans and Argentinians and Brazilians. They're like, "What are they doing?" They're converting their local currency to a US dollar asset, and they're not really making, they may make money on the real estate investment, they may not, but they're making a huge amount of money by avoiding the currency debasement in a weaker currency.

So, um, I think generally the idea is, you want to have a lot of assets. You want to invest your assets in a very strong capital that's appreciating. And then you, if you have access to cheap credit, right? Cheap mortgages, subsidized credit, something like that, then you can avail yourself of that. And that's like a leverage buyout, or that's just like leverage property development. And, um, and if you're not using cheap credit, they're just working hard. And, and, and working hard is difficult because you have to get paid. Yeah. You have to get 7% more, 7% more after tax each year to keep up to just stay constant, right? You're running on a treadmill. And the problem is, say you get a 10% raise each year. Well, the tax rate, the tax bracket you're in keeps going up. You're getting taxed on that income. So, I guess if you, you know, you can basically hold your standard of living by getting paid 10% more each year, but that's a real, you know, rat race. Or what you can do is you can buy an asset that's just going to be 7% more valuable, or 15% more valuable, or with Bitcoin, 30 or 40% more valuable every year while you do nothing. It's like, "Do you want to be 7% richer every year by doing nothing, or do you want to have, do you want to work 10% harder every year to not make any money, to not be richer?"

Right? Which of those two do you want? The one is an operating business, by the way. An operating business has to work 10% harder to stand still. A property business gets 7 to 10% richer doing nothing. And so, and so you can see you can compound your wealth much, much more when you're asset-rich than when you're labor. Asset intensive versus labor intensive.

Over the last six years, you and MicroStrategy have spent more than $60 billion buying more than 800,000 Bitcoin. Mark Twain famously said, "It's not what you don't know that it gets you into trouble. It's what you know for sure that ain't so." How much time do you spend thinking about this when it comes to your $60-plus billion dollar and growing by the day Bitcoin bet?

Thousands of hours a year. You know that there's a famous phrase by Warren Buffett, you know, "Put your eggs in one basket, but watch that basket." So, uh, you know, what does that mean to me? It means that we don't, I get encouraged to diversify into a different business, a different line of business, or a different asset every week for five years, and we always say no. Well, why don't you buy this? Why don't you buy that? Why don't you buy this? It's because we don't know those businesses, right? Uh, we could enter into any of a thousand different businesses. We could buy any of a thousand different things. We could, and we could diversify, but I would rather intensely understand one thing, Bitcoin, obsessing over it, obsessing over the first-order nuances, the second-order nuances, the third-order nuances, the fourth-order nuances, the reflexivity, right? Uh, I obsess over that, and we do it all the time. We talk to everybody. We create, in, we have a risk model. And we have a stochastic risk model. We publish it to our website. You know, you can take all of our credit instruments, and then you can plug in the price of Bitcoin, and you can plug in your forward volatility estimate, and you can plug in your forward price estimate, and then you can, you can adjust all the parameters, and it spits out the risk and the fair credit spreads, and it updates every 15 seconds. I look at it every day, and we calculate every metric. And, you know, what I, you know, if you said, "Put some silver in there, put some gold in there, put some real estate in there," it totally breaks the model, right? Like, I would have to become an expert. You know, what is the risk of Miami Beach real estate? Well, you know, that's different than New York real estate, and New York real estate got different after the last election. So my view is, the world's full of a lot of opportunities and a lot of assets. And I'm not going to say that other people won't make money understanding those other assets. They do make money. People make money trading Nvidia stock, or trading MAG7, or trading equities, or trading commodities, trading other crypto assets. What I would say is that it's in, it's in your interest to laser-like focus. The world doesn't care whether I'm a, a good, uh, a good manager of a hundred different things. The world wants me to be the best manager of one thing. And you should, you should aspire to be the best in the world at the one thing you do, right? And if you're not the best in the world, you want people to say, "Well, you know, there's like five superstars in the basketball, you know, or two or three. You want to be on the short list of the superstars." You do not want to be the guy that's like, "Oh, he's Michael Jordan, but he also plays a little bit of poker, and he also plays a little bit of baseball, and I hear he's a good race car driver, but I'm going to trust him with my money." It's like, because I mean, people just don't, you don't need the jack of all trades. is like, I just want, if I'm going to watch someone or or trust someone, like, it's like, you ever get in an airplane, you're like, "Do you give a crap that the pilot's a good father, and he's really good at baseball coaching, and he has interesting political opinions, and he can juggle, you know, fire torches, or do you just want him to land the plane?"

Mhm.

You know, it's like, and, and, and, and if I hear that the guy spends half his time doing the other stuff, I'm like, "I don't know about this one." And so we know what we don't know. We stay in our lane. We focus on it. You know, everything, anything in the world that might have an impact on Bitcoin, I care about. But I'm not going to opine on who's going to win the Oscars, and whether that was a good movie, and tell you what your political views or your religious views ought to be, or delve into geopolitics. I'm not even going to give you, you know, there's 10,000 other businesses. You know, "Well, this will, how's this going to work?" Is, you know, it's like, you know, there's someone else that knows the business better, that has more skin in the game. It's like, we have $62 billion invested in BTC. We have skin in the game. We have soul in the game. This is what we do. Yeah, I don't expect you to care about my opinion on any of 10,000 other things. I might share, share them with my friends and family. It's not a professional opinion, right? It's a personal opinion. And, uh, I think in your professional context, strive to be right, the acknowledged expert in the world. And if you're not, if you utter an opinion, make sure you put in the work, and you made the investment, and have the skin in the game to deserve to be considered.

If you deserve someone's attention because you've made the investment, that's all you can ask for. And, and, and I think that's where humility will keep you from getting yourself in trouble.

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The acknowledged expert in the world of Bitcoin said, "Sell the kidney if you have to, but keep the Bitcoin." This one went crazy viral.

You know, if you, if you, if you say non-controversial, you know, if I, um, if I were to post, you know, "There's some storms over the Caribbean, and like one in a thousand of them becomes, you know, a storm in Miami, and occasionally some of those storms create floods, and, you know, if that happens, you might want to think about it, but probably won't make a difference. And meanwhile, there are a lot more important things in the world than this." No one's going to retweet that. If, if I say, "There's a storm over the Caribbean that's going to put a 20-foot wall of water over Miami, and we're all going to drown," that gets retweeted, you know. So online, if you want to make a point, sometimes you have to be colorful, or people want you to be a little bit witty, or, or I need some quotable quotes. You need to be entertaining, or you need to be a little bit edgy. And so believe me, I think you should keep your kidneys. But, but really, the message I have is, the message I have really is, the Bitcoin is a, is a stronger form of capital preservation than your house, than a bar of gold, than a bunch of silver, than the stock, than an index, than a credit instrument, than a, you know, a stack of currency. All of those things are weaker. And when it comes time to sell something, sell something else. Whatever the something else, you probably have crap in your life. I, you know, I'll see someone and they're like, "I have a, I have a sexy sports car." You know, that's got a half-life of seven years. You know, Bitcoin will keep you well. You know, you've got $200,000, you bought a sports car, good for you. You'll be wealthy for a decade. You have $200,000, you buy Bitcoin, you'll be wealthy forever.

Mhm.

So when it comes time to sell something, sell the thing that has a half-life of seven years, or two years, or 10 years, or 20 years. Don't sell the thing that will make your children's children wealthy, right? Bitcoin is going to have economic value 500 years from now.

It's the crown jewel.

Like the royal family of of Britain, they still own the center of Britain. the, you know, the royal, the emperor of Japan still owns the middle of Tokyo, and the royals in the UAE, they own all the good property. So own the stuff that's going to have value in a thousand years. They would never sell Windsor, you know, Windsor Castle, Buckingham Palace. You know, just like you're a New Yorker, don't sell Central Park. I'm going to sell Central Park to make a dollar. It's like, Jesus, it's worthwhile a thousand years from now. You might want to cultivate it. And Bitcoin, I think, is even more valuable than the nicest, most desirable real estate in your favorite place on Earth. Bitcoin is going to be around. It's cyber Manhattan. A thousand years from now, your children's children's great-great-10x grandchildren will be rich if you kept it. And, you know, and if they kept it, and if you sold it to buy a Ferrari, you know, it's like, "Oh yeah, my my great-great-great-great grandfather had a very sexy horse and carriage. I could have been the richest guy in Florida, but my great-great-great-grandfather wanted velvet in his horse and buggy, and he wanted a nice little bridle because he wanted to impress a girl." I'm like, "Dude, sell the horse and buggy. Keep the Bitcoin."

Keep the kid, keep the kidney as well.

Yeah, keep the kidney.

What's, what's the endgame for Strategy?

Our endgame, we're like a reserve bank. We have a reserve asset, you know, uh, Bitcoin. So, we've accumulated $60, $70 billion dollars of Bitcoin. We will sell credit. We, we are stripping the performance and the risk off of the Bitcoin. Bitcoin's got 40 V, and has got high performance, but most of the world wants zero V. What? They want a bank account that pays them 10 or 11%. They don't want a roller coaster where they're pulling G's and throwing up that pays them 40%, but they have to wait a decade.

You said the market is 100 times bigger for people who want the 10% a year versus the 40% that is volatile, right?

Yeah. So, so what if you walk down the street and ask a 100 people, "What do you want?" Do you want to work hard for a decade and be rich at the end of the? That's like being a doctor, right? Do you want to go to med school and work hard for nothing for a decade, and stay up all night and stress out that you're going to flunk out, but then at the end of 10 years, you'll be comfortable? Or do you just want to be comfortable now? And most people, they want the bank account that pays them the 10%. They, uh, they want to live happily ever after. Or another way to say it is, they want to compound their wealth comfortably.

If you want to be more aggressive, it's like, okay, well, give me the 10%, and I'll lever it up three to one, and I'll get 25% yield like in DeFi. But I want to preserve my principal. And the general, the general idea is, people, if they have a certain amount of wealth, they don't want to risk it all in order to make more. They want to put it to work in a responsible way, and they want to, and they want to comfortably compound their wealth. They want to manage it. And so our endgame is to create that digital credit. For every dollar of equity capital of Bitcoin that we have, we call it digital capital. For every dollar of digital capital, you can create 10 to 20 cents of credit. And so we will, you know, we've sold about $10 billion dollars of credit. We've created 10, 10-plus billion dollars of digital credit. We'll create $20 billion of digital credit over the next year or more. Then we'll grow that 30 to 50% a year. So, $20 billion to $40 billion to $60 billion to $80 billion. And what's the long term? And so say we have a trillion dollars of Bitcoin of capital. Well, we can have $200 billion to $400 billion dollar of credit, and that then pays a fraction, 10% yield of the performance of the capital. Long-term, the capital should be going up 20% a year, and then the credit could be paying 10%. And, uh, and so what we're doing is, we're creating this digital credit, and that becomes the basis, the fuel of the money, the money economy of digital money, digital yield, DeFi, TradFi. You know, how big is the market for 10% return of capital dividends on an investment-grade credit instrument? There's $300 trillion credit, and that $300 trillion of credit gives you after-tax about 350 basis points. So, what if I could give you three times that much? Okay. So, I, is there $30 trillion market there? Yeah. The addressable market is trillions and trillions of dollars. So, our, our endgame is to create that credit and strip away, we strip away the risk. We're stripping the currency risk. We're stripping the economic risk. We're stripping the volatility. We're distilling the yield, compressing the duration, and we're handing people that want to, that want to invest their capital on credit, this very, uh, low volatility, call it like a digital money market fund for people that trust digital assets and believe in digital capital, right? And then, because we're doing that, that creates amplification for the equity. So our common shareholders, MSTR shareholders, they outperform Bitcoin. So Bitcoin does 20% over the long time term, they would do 30, we would expect, or 40, right? And, and right now, say Bitcoin has been, it did 40% a year for the past five and a half years, and our common stock is 60% a year. So, we give amplified Bitcoin to the equity holders. We give damped, low-risk Bitcoin with cash flows to the creditors. And then, because we're actually raising that money, we're the biggest buyer of Bitcoin. So, we're powering up the Bitcoin network. And if you're a capital investor in Bitcoin, well, we, the Bitcoin price was $10,000 when we started. It's $80,000 now. There's, uh, trillion dollars of wealth that's been created. We're not the only actor, but we're an actor. So, our job is to power up the Bitcoin network and keep driving that network. And I think we'll buy it at $100,000, we'll buy it at $200,000, we'll buy it at $500,000, we'll buy it at a million, 2 million, 4 million, 8 million. So, it's a very simple business, which is just dry Bitcoin to millions of dollars. Expand the capital network to hundred trillion dollars, hundreds of trillions of dollars, create trillions of dollars of digital credit, and then create a lot of money for our common stock shareholders. And then the last point I'll make is, there's a thriving ecosystem right now. If you look downstream of us, corporations are using our credit to power them. People are using our credit to power the ETFs. Companies like Apex and Saturn are creating yield coins that like, like stablecoins that pay you 8% or 10% or 15%. And those tokens or yield coins are going into DeFi protocols, and people will loop that and generate 25 or 30%. So there are yield products, investment products, yield coin products, digital tokens, public funds. At some point, I think a bank, wouldn't it be nice if your bank just said, "We'll just give you 8% on your money instead of 0% or 3%?" You know, why, why not, right? And so, at some point, we will power bank accounts, we will power crypto accounts, we will power, uh, yield coin tokens, we'll power DeFi and, and finance and trading. And of course, we'll power the people that don't trust any of it. Like, let's say you hate all of it, and you, and you don't trust corporations, and you don't trust crypto. You just want to hold the Bitcoin, hold your own keys, you know, be self-sovereign. We're powering you up, too, right? We're going to, you're going to own Bitcoin that's worth a million dollars a coin, and you're not going to have to trust anybody. So, everybody kind of gets what they want. And we're even powering the TradFi people, like investors that have, buy private credit or junk bonds or investment-grade bonds. They're buying illiquid, low-yielding, risky instruments, and we're going to give them something twice as good or three times as good. So we're really just in the business of fixing the money and digitally transforming the capital markets, and we're creating this digital equity class, MSTR, digital capital, BTC, and digital credit, STRC. And I don't know why that just can't continue year after year at a bigger and bigger scale.

You said when we started, the Bitcoin price was $10,000. Now it's $80,000. You said we'll buy at $500, a million. Where is Bitcoin price when Strategy and Michael Saylor's job is done?

Um, first of all, my job will be done when I can't do it anymore, and I will gracefully retire and move on. But Strategy is a corporation with an infinite life expectancy. You know, the next generation of leadership is, is CEO Fong Lee, and Andrew Kang, and CJ, and they're much younger than me, and they'll be going for 10, 20, 30 years after I am, and then they'll pass the torch to someone else. You know, Lloyd's of London has been been around for hundreds of years, you know, and so I don't know why the company can't continue for hundreds of years. It'll, its job will always be done, and its job will be to create the credit from the capital, you know, in order to create an on-ramp, a low-volatility, highly liquid on-ramp for people to create their digital money, digital currency, digital yield, and all the other derivative products. Um, it's, it's a, it's a mission. And, you know, why wouldn't you just keep doing it as long as the civilization needs the money fixed?

Where do you think the Bitcoin price would be trading today if Michael Saylor, our savior, never had his "aha" moment and didn't dedicate his life to buy as much Bitcoin as possible?

I, I don't know the exact number. My view is Bitcoin would have been successful without me, and if, and without our company, and if we hadn't done it, someone else would have stepped into that role. But, you know, presumably somewhere between $10,000 and $80,000. It wouldn't be as high as it is right now. We've spent $62 billion to support the network, and we spent a lot of time advocating it. I don't know, halfway between. Maybe it'd be $40 or $50,000 instead of $80,000. It's hard to know, but generally, it'd be a little bit lower than it is right now. But on the other hand, the other theory, the counterfactual is, maybe somebody else would have become the Strategy. And if we left a vacuum, they would have done everything that we did. And, and so that's always possible. The, the beauty of a decentralized network is, is, uh, there's always a vacuum to be filled, and there's millions of companies, and everyone has the ability to, uh, plug into that network and add value to it wherever they see a vacuum or a niche. So, you know, maybe, you know, maybe there would be someone else that would have done it, done it better than us, and Bitcoin would be higher, and maybe no one would have done it, and it would have not grown as fast, but it's probably somewhere in between that.

You mentioned STRC. The word is going crazy about this STRC instrument that you invented last year. Explain STRC to my mom who is 65 years old, is retired, and has accumulated $500,000 US after a lifetime of hard work.

Sure. STRC is a preferred stock. Uh, it's targeted to trade around $100, between $99 and $100. It's senior to the common stock. So it has liquidation preferences. And the, and the company's, you know, it, it is, uh, a preferred stock with about $8 billion outstanding, and an enterprise that has $85 billion of enterprise value. So you could think of the senior 10% of the enterprise is Stretch. And the mission of Stretch is to pay a monthly dividend such that it trades around $100. And so right now, that monthly, that variable monthly rate is 11.5%. Uh, we pay that each month. It was like 95 cents or something, 90-something cents last month. It's a return of capital dividend. And what that means is that when you receive the dividend, you reduce your basis in the investment by the amount of the dividend. So if we pay you $10 in dividends on a $100 share, you reduce your basis to $90, but you pay no tax. And then the next year, you reduce it to $80, and you pay no tax. And after 10 years of $10 a year, you would reduce it to zero. At that point, it would become a qualified dividend distribution. So you would start paying long-term capital gains tax on it. But the, the way to think of it is, it's tax-deferred fixed income. And the company uses all of its resources to strip the volatility to make it trade pretty close to $100. If it trades below $99, we'll raise the dividend, or we'll raise capital, or we'll do something to get it back to $100. Uh, and when it trades at $100, we sell that, uh, security in order to raise capital. So, we, we wouldn't sell it at $99, $99.99, we won't sell it. But at $100 and a penny, we sell it to the market in order to allow other people to access it without overpaying. We, we never want someone to pay more than $100 and a penny for it. And, uh, you know, you could think of it as it's like a, a digital money market-like instrument. It's not a pure money market. It's a little bit riskier. It's a little bit more volatile than a money market, but, but it is a stable instrument, and it's designed to generate three times, you know, the performance of a money market for people that believe in digital assets. And, and it's the most tax-efficient credit instrument that you can buy because if you buy bonds, you pay ordinary income. Yeah. You have to pay 40%, 50% tax on a corporate bond. If you bought a bank preferred stock, it's qualified dividend distribution. You'd pay long-term capital gains tax at the federal and the state level. But with Stretch, you get these two big advantages for generational wealth. One advantage is when you buy a $100 share, you get $100 of dividends tax-deferred, and you can reinvest them, and it compounds. And then if you pass the share to your heir, if you give it to your

daughter or you give it to your son in your will, they get a step up in the basis to $100 and they collect another $100 worth of dividends tax deferred. So your family might very well collect dividends for 20 years all tax deferred which you can reinvest and you can't do that with a bond and you can't do that with a normal preferred stock and and so it's a very interesting way to preserve wealth if you don't want to see your principle fluctuate. You don't like volatility and uh you aren't really pleased with the bank providing you with zero or a money market where you get like 2% after tax.

So my mom has her $500,000 in savings and she sees I can make 10% a year, $50k, that's amazing. Should she invest her entire $500k savings into STRC? I think allocation's a decision that everybody has to make and it all comes down to, you know, how comfortable are you with the risk you're assuming. So, probably the answer is not probably not overnight. You wouldn't want to uh a Bitcoin maximalist, you know, a person that's got a lot of money in Bitcoin and they believe in Bitcoin, they might very well prefer to put most of their working capital, the money they need in the next four years. They might put that into STRC or digital credit because they're a Bitcoin maximalist. The average investor would probably say I want to have my investments across um, you know, two, three, four different sources of credit and uh I really just think it depends upon, you know, what's your time horizon and how comfortable are you with Bitcoin and you you have to basically you have to trust Bitcoin and you have to trust the issuer. So the issue is would you put all your money in one bank called strategy and then would you would you trust that the Bitcoin network is robust and is not going away and uh, you know, that's a statistic decision. So probably some portion depending upon how comfortable they are with digital assets and digital capital.

How do you manage to always come up with new ways to raise dollars to buy more Bitcoin? You said before I use AI in my question I had, do do you do you have an aha moment while you take a shower? Do you have an entire department of strategy that works on that? How do we raise more US dollar to buy more Bitcoin? How does it work concretely?

Well, I mean, first of all, the history of the human race is challenge and response. You have a challenge. You're hungry. Where do you get food? You have a challenge. It it's raining. Where do you get shelter? You have a challenge. It's winter came. You're freezing. How do you warm up? You know, you have a challenge. The fire went out. How do you restart the fire? Yeah, it's always a challenge. In business, it's always a challenge. So, um we have uh worked to overcome challenges for the past I mean I mean ever since I went in business, right? Like bam bam. I could give you if I was writing the book, it would be 99 chapters and every chapter would end with a cliffhanger and a near-death experience. And by the time you got to the you wouldn't get to the 99th chapter because you got to the 17th chapter, you'd be fatigued. I just can't. How many movies have 17 chapters and each one is brutal and painful? It's like normally three or four. So the history of the company is 99 chapters and every one of them was uh a challenge to be overcome and if we didn't overcome it, it's the end of the company.

But if you look at us starting in 2020, the challenge was how do you buy Bitcoin with cash? Then how do you buy Bitcoin with a tender offer? Then how do you buy Bitcoin with equity? And then how do you buy Bitcoin with a convertible bond? Then how do you buy Bitcoin with a senior bank bond or a senior bond? And then how do you buy Bitcoin with an asset-backed loan? And uh then how do you buy Bitcoin with an equity ATM or shelf registration? And as we went through each of those, we discovered things that worked well and things that did not work well. And uh, you know, I use this I have this phrase from Winston Churchill. He says, you know, the Americans, they'll do the right thing after they've tried everything else. And so, you know, how do we get to say stretch? Well, we tried everything else. Like, sailor will do the right thing after he's tried everything else, right? So, we're working our way through and it's like, what do you want to try? I'm going to do this. I'm going to do this. And after we did we did senior bonds, we're like, that doesn't work. There are too many covenants and that's a a yoke around our neck we can't grow. So, we have to repay that. We did an asset back loan. We borrowed money from uh a bank, Silvergate Bank. Crypto crashed. The bank failed. We bought back the loan at a discount. We're like, "Okay, that doesn't work. We won't do that anymore." Then we did the converts. We became the biggest issue of converts in the world. And we learned a lot about the convertible bond market, but they all traded cheap. They were all undervalued. And we we basically maxed out the capital and the market had no more capital. We outgrew the market. So why did we go to the next thing? Well, we got too big. It's like, okay, you're a developer in Key West and pretty soon you've developed half of Key West and why did you move to Miami? Well, I just got too big for the market. So, like no one wanted to greenlight a 50-story building in Key West. And so, how, you know, what do I do? I better go to another place. And so, we found the preferred stock market because we realized we needed to tap into larger pools of capital. And then, you know, we did strike and that was moderately successful and we did strife and that was double more successful and we did stride that was even more successful. But, you know, it's like there are always little problems like it's too volatile. Like stride, oh, it pays me an extra 5% but sometimes the principal trades down 5%. Like, do you want to get paid 5% more over a year but lose 10% of your principal in a week?

Scary. So, we're like, we kept thinking, well, how do we perfect the credit instrument? How do we find the perfect instrument? And people said, well, pay us monthly, make all the volatility go away, make a trade at 100, maybe, you know, if it trades plus or minus $2, make a trade plus or minus a dollar, make a trade plus or minus 50 cents, make a trade plus or minus quart. Make it better, better, better, better. It's like, you know, with uh John D. Rockefeller, he called the company Standard Oil. Most people focus on the oil part, but he thought he called he referred to his company as the standard. And it was standard oil because because they took crude oil and they distilled it into kerosene. But if the kerosene had impurities, it might blow up your heater or blow up your lamp or your house might catch fire or it might corrode the engine, right? rocket. You know what rocket fuel is? It's kerosene. What's jet fuel? It's kerosene. You know why we don't put gasoline or diesel in jets? Blows out the engine. You know, we can't run it. We needed super pure. And so they kept working to distill super pure oil, right? Perfect. The highest the highest form of of petrochemical or distilled uh crude oil is kerosene. It's rocket fuel. It's literally what you use if your life depends on it and you need the maximum energy per unit. And so you know what's our engine? Well, we kept trying to make it better and sometimes we had a success but we outgrew the market. So now we have to invent our way out of the box. You're in a box, innovate your way out of the box. And along the way we took every good idea, public stock ticker good idea. When I was going to do the preferred, my friend Eric, he says, I said, you know, maybe I should make it MSTR.P or something. He said, no, four-letter ticker, not five-letter, four-letter ticker. It must be STR, a four-letter ticker. You know, all the other preferred, they're like five, six, seven letters. You can't search them. You can't remember them. You can't find them. How are you supposed to buy it? Right? So, we wanted the right name, the right ticker on the NASDAQ. We wanted it to sell to everybody with Robin Hood and Schwab accounts. 80% of Stretch is held by retail. It's got to be it's consumer product.

Take the keyboard away, right? You know, just like the iPhone. So, we kept incrementally improving it. And what was our what were our tools? I mean the thing that really accelerated our growth, digital capital. Bitcoin is digital capital. You have a block of pure digital economic energy. You can carve out anything you want from that. Just like a barrel of crude oil, you know, we get Lycra and we get kerosene and we get gasoline and we get Napa out of a barrel of crude oil. You get a lot of stuff out of a barrel of crude oil, right? You eat it, you burn it, right? you wear it. Most people don't think that it's all in the barrel of oil and the entire prochemical industry downstream is all about extracting that thing of value from the barrel of oil. We use digital energy, digital capital. And now if you combine that with digital intelligence, AI is just digital intelligence. You can create a credit instrument, digital credit. This is 40 V 40 ARR fluctuating. What if you want 10% in dollars with one V? I can create that. I can create some of that. I can't create if I have a hundred billion dollars of this. I can't create a hundred billion dollars of of perfect high-grade one vault, but I can create a billion dollars of it probably. What if I want 6% in yen that's 20x over collateralized with investment grade risk I can create that from this. So what we did I want you to imagine I have a block of uh plex lexan plastic just a big block of it or or a block of marble and I have a computer and a computer-generated milling machine. I'm like well I want a picture of a beautiful woman. I want you to carve it out of a block of marble. I want a picture, right, of a cherub, you know, or a a unicorn. Carve it out of the lexan or or the the clear plastic. So, what we're doing is we're chiseling out a financial instrument out of pure economic energy. And um you couldn't you couldn't do this before you had digital capital. So we discovered Bitcoin first and after a few years we realized ah it's digital capital you couldn't do without digital intelligence and in 2023 it didn't quite work. So it's really 2024 2025 when digital intelligence got really smart. AIS are really smart now. We couldn't do it without uh the concept of digital credit. We invented that using the AI, using the capital and then we distribute it on digital channels, right? All of these broker dealers everywhere in the world, it's just flying. And right now it's it's being distributed as digital tokens on DeFi, digital finance exchanges and and uh and digital credit networks everywhere in the world. And of course, we communicate it with digital media like what I'm doing here. You know, I used to fly around the world. Took me a month. I I would take a month, spend a million dollars, and I would talk to 2,000 people in the month. A hundred people in 20 different cities. 20 times a 100 people. I get to 2,000 people. It takes me a month and I burn a million dollars of jet fuel. And you know, you're going to release this thing, right? and I'm going to communicate to orders of magnitude more people after a 15-minute drive to your studio. And so I it's like people used to retire. I'm going to retire. I'm going to teach college. Okay. Well, you're going to teach 200 people a year for 20 years. And after 20 years of work, right, you're going to have educated or taught 4,000 people. You know, I got a a Lex Freriedman podcast. that's run like 11 or 12 million times.

It's like while I'm sleeping, we get to more people on a residual than if I devoted 30 years of my life to teaching. So, it's all digital, digital communication, digital distribution, digital capital, digital intelligence, digital credit, and and we're just very lucky to be born to to live when we live and be able to do what we do because everything I've described, you know, you roll the clock back five years, you just couldn't have done it. I I wouldn't have done it. I c I couldn't imagine it. It's just, you know, we have been catapulted into a new digital world of digital transformation. you know, sometimes kicking and screaming by COVID. You know, by the way, I used to if you'd said, "I want to work remotely and let's like use Zoom or a video call," I would have fired you in 2019. I was like, "No way. Everybody showed up at the office." And then 2020, we all got locked down. It's like, "Okay, guess what? Kicking and screaming, I guess I have to embrace Zoom and video." And and you know by 2021, you know, we're all doing podcasts and we just realize, okay, well, this is like a million times more efficient way to communicate or get stuff done.

You're experiencing insane swings. Crazy volatility. Sometimes you're up $30 billion, everyone calls you a god. Sometimes you're down a couple of billion dollars and people come out and ridicule you or mock you. So you associate between the god and madman status at the pace of bitcoin volatility. How much do you personally get affected by all the fud around you and strategy when the price goes down a lot?

It doesn't bother me that much. Some sometimes I I pay attention to read the room so I can figure out what to tweet. But you know I I had a difficult life. Like I went to MIT and it was really hard. It was the smartest people in the country and I came from a public school and uh and we worked Monday, Tuesday, Wednesday, Thursday, Friday, Saturday and Sunday, 16 hours a day, seven days a week, except some sometimes we got four hours off on Friday night and we got very angry that there were tools and nerds that were working on Friday night and we weren't. Okay. A and and it was just utterly brutally difficult and it was pretty much here's the hardest problems in the world and you figure it out and if you can't figure it out you know you can't that's just you you're failed and so when I left MIT I worked 70 hours a week 50 hours a 50 weeks a year 70 hours a week 3500 hours a year for 10 years straight while we were building our business that wasn't hard like that people ask me was that hard I'm like no that was really easy compared to MIT. MIT was so much harder than working 70 hours a week, 50 weeks a year. I like like I got to actually ask for help from other people. Like I had other people in the company and we worked with tools at MIT. It was like they drop you into the Amazon rainforest, you know, with a rusty knife and a piece of rope and they say, "We'll come back in four years if you're alive, right?" And and you just figure it out. It's it is like well can I actually take a useful tool with me? No, you have to build everything from scratch. And so I lived through that and then in our business you know you start a company we had a boom and bust our you know I lived through seeing our stock go to $333 a share and I watched it go to 42. Okay. So so I I've had volatility.

I read that in 2000 you lost $6 billion of paper wealth. Is this what you're talking about?

Yeah. Well, that was that wasn't the worst of it. That was just in one day, right? That was one day uh a bad day.

The worst of it was a couple years later when the stock went from, you know, it had gone from $100 down to a dollar down to 80 cents, 60 cents, 50 cents, 48 cents, 46 cents, 42 cents. And we were you know 3 days from bankruptcy failing. So you know that's by the way that's like n calculate that's like 99.8%

draw down.

Okay. So like when people are like oh yeah you're down 20%. Are you stressed out? Like no I'm not stressed out. You know on October 6th on October 6th Bitcoin hit an alltime high. Okay, that's October, November, December, January, February, March, April. We're seven months, one week, seven months. You know how long it take? Okay, so seven months ago, we were an all-time high and people and everybody's losing their mind and throwing in the towel and giving up. You know how long it takes to make a baby? It's like you can't even make a baby in seven months, okay? You can't get through college, right? To get through college, it takes four years for an undergraduate degree. It takes 16 years starting from first grade. And you know, you want to be a doctor, you want a master's degree or a PhD. So what I said was four years is very fast for success. 10 years is normal. Seven years or sorry, seven months is a blink. And I think that I think what we have to keep in mind is that one of the great uh features of crypto is there's news every every day, every minute. It's like on Saturday morning there's a there's a crisis. On Sunday morning it's resolved. People have already gone through a year's worth of gains and losses between Saturday and Sunday and it's just very volatile, very anxiety-inducing. But that's the feature. That's what makes it interesting and that's because it's generating a 24/7 365 news cycle. It's sucking all the auction out of the room. It's the most interesting thing in the world. It's the most liquid, most tradable thing in the world. You live in Singapore, you know, you see bad news, you lever, you lever a short trade 27 to1 and the crisis gets resolved. You go long 50 to1 and no one's trading Upper East Side real estate during that time frame. No one's trading art. No one's trading the S&P and so volatility is vitality. This this kind of um this kind of uh anxiety or jitteriness is actually just indicative of the world's most global free capital market. Bitcoin's volatile because it's useful. Because a guy in China who's worried about a government decision in China that you've never heard of, that you don't know about, they can trade Bitcoin based upon that. It's reacting to things that have nothing to do with Miami real estate or New York or fill in the blank Renaissance Italian art. And so, does it bother me? Not at all. I think you have to be energized by it. It's a benefit. it. The only reason you're talking to me, the only reason that that you're interested or anybody else is interested is because I strapped myself, you know, to the crypto reactor, right? The crypto roller coaster. And and this thing is interesting to 500 million people in the world. and uh, you know stuff that's stuff that's boring like what do you think about the value of um of real estate in New York Central Park? Do you care? No. Why? The English word for interest, the classical definition is I have an investment in the thing. If I have an investment in the thing and I might make or lose money, I'm interested. So, the secret to the Wall Street Journal is they only wrote stories about publicly traded things that you could buy or sell or you might own. If I write stories about things you can't own, oh yeah, the the value of the emperor's family's real estate in Tokyo has gone up or down. What do I care? I I can't buy it. I can't sell it. I can't short it. I can't bet on it. It's not interesting. Bitcoin is the most interesting thing in the world because everybody can have an interest in it either directly or indirectly through a derivative. You have to embrace that. You have to revel in that. That is the feature. That is not the bug. And the last point I'll make is you're an investor. You should have a four-year time horizon. If you're not willing, if you won't hold it for four years, you know, you're a trader.

You're not an investor. And ideally, you should be thinking 10 years. The famous quote from Buffett is if you wouldn't hold it for 10 years, you shouldn't hold it for 10 minutes. And if you have a four-year time horizon, then then the question is, well, so what's the, you know, the weighted 200 the 200 week moving average, you know, and how's that moving? You look out that way. If you want to be jittery and and focus on where it moves every week or month or day, you are a trader. You're doing it for entertainment. If you're a good trader, you know it. If you're not a good trader, you're a fool, right? To tra you either know you know what you're doing or you're just a fool. And so I I would never give advice to anybody that they should trade this stuff with a less than four-year time horizon unless they are an expert and they know more than me. And if they do, they know they do. And otherwise it's like sit back, enjoy the if if you want to have the ball, then expect 40 V in four to 10 years. And if you don't want that V, if you don't want, you know, if you want that, you got to be prepared to pull the G's, right? If you want the jet engine, you pull the G's. You want the roller coaster, be ready for that. If you don't want that, but you still believe in crypto and Bitcoin, buy the credit, by stretch, and you'll get a comfortable ride, right? Because like MSTR is like the F-16, you know, and uh and Bitcoin is like this uh barntorming plane. And you know, and uh and then Stretch is like the passenger airliner. It's like the passenger jet. And you just maybe it's better to say MSTR is like the rocket and Bitcoin's like the fighter jet. And then stretch is like the 777 or the Airbus passenger jet and you decide how you want to travel. It's it's not that complicated.

You used a few metaphors with um babies and children. Do you have children?

I do not.

Why?

I'm I'm unmarried. I guess I never found the right the right woman. I have I I have family members. I in they have children. I have siblings. I I'm inspired by them. Uh I I am I guess singularly married and and devoted to my business and professional interest. And I have been I continue to be.

You said something in a podcast recently that working hard is the worst advice you can get. You don't want to make money by being talented or working hard. Can you explain?

Heinland had a quote. He said, "You don't you don't win wars by dying for your country. You win wars by making the other guy die for his country." You could also say, "I don't want to be a martyr. I want to be a winner." You could also say, "Better to work smart, not hard." You could also imagine, you know, do you want to be the dude uh, you know, the 6'6 inch tall, 300B Hercules with a shovel, or do you want to be, you know, the ordinary person with a forklift, you know, and um the moral of John Henry, if you remember, John Henry was the was the strongest worker on the railroad and he worked himself to death and his heart burst. And at some point, don't try to outwork a forklift. So, and you look at the modern era right now, you want to work smart, not hard. I've worked hard. I I've worked 3,000 hours a year, 10 years in a row, done everything possible, and I have beat my head against the wall, and made no progress. I so I've lived it, you know, and and you want to do it, go take a shovel and start digging ditches, you know, and don't don't get a caterpillar tractor and don't use machines. You could just start walking across the country right now, too, instead of using a car. It's like I I guess I would say, you know, don't run fast, drive your car, right? And um and today the issue is is um the AIS can compose Shakespeare and sonnets and poetry. Like you can go back to school and you're a podcaster, right? You say you want to be successful in China and Japan and do you speak Japanese? Do you speak Chinese? What if if you said to me, 'Mike, I'm going to go to school and I'm going to learn to speak fluent Chinese and I'm gonna learn to speak fluent Japanese and every time I do a podcast, I'm going to do it three times over and I'm going to sub I'm going to dub it in Chinese and Japanese. It'll take me about 10 years and it's going to cost me like $500,000, but I want to actually distribute it in Japan and China. Mhm.

And I would say, you know, the AIs can translate this to Japanese in like split second and they could also translate to Chinese. And you know, you can actually create a routine that will cause the AI to take this and translate it to Portuguese, Spanish, French, German, Japanese, Chinese, Russian, Ukrainian, the British dialect, you know, everything you want. And I'm like, but but you go ahead and go back to school and like learn to speak because that Yeah, that's just Yeah. working hard. Bo, you'll be it'd be very impressive if at your age you mastered 10 languages. I'd be impressed, but I don't think it's a good business decision. It's like it's just like um the AIs can, you know, you got a book, everybody's like, I'm going to write a book. Guess what? The AI will write the book for you. You know, the AIS will write the book. The AI But the AI will write the book in a hundred languages. Okay? It's not um it is not a differentiating contribution to the civilization anymore. You could give me you could literally give me any topic and I could go to my AI and I could say take this one paragraph prompt and write a 10 chapter book in a hundred languages. I'll be back. Click and I could walk away. So, there's a lot of content. Look, Voltater was the greatest thinker, right, of his age, the age of Voltater. Will Durant literally named the book about the 1700s, the age of Voltater. And if you look at the works of Voltater, they would fill a shelf across this room. And that guy was a hyper genius. And it used to be that being able to spit out perfect pros in French on any topic made you a genius. It's just not so useful today. Right? The robots are going to do all the work. The cars are going to drive themsel. The AIs are going to draft 100-page legal documents. So when I say that, I don't mean don't work. I mean if you work in a warehouse, use the forklift. If you own a warehouse, you probably want to create a hundred robots that do all the work. And if you're in the business of creating content, you know, maybe you want to be thinking about how I harness the AIS to create better content and distribute it better. Yeah, these things are a million times more productive. You know, like when I when I'm doing work, I go to the AI, I'm like, I want to do this and I want to do it this way. you know said well what about this >> then I say well the lawyers told me I couldn't do it how do I explain that you know are they right and then I say draft me a a briefing so I can explain to my team why this makes sense uh make it a little bit more elaborate and I get 25-page document and then I send it I say this is what we're going to do and this is why we're going to do it and you know and I I could also just go back to law school But the point is really, you know, I could go back to law school and I would be onetenth as effective in a decade after spending a million bucks. Or I could humble myself and ask the AI for help and it gives me the answer in two minutes. And so everybody ought to be thinking, how do I use technology, digital technology, digital assets, digital capital, digital intelligence, digital media, digital something to create a product or a service. Your parents didn't have, they couldn't create. Nobody imagined it back then. It's only possible now. But it's a hundred times or a thousand times better than the stuff we used to use. And that's the way to think if you want to get ahead because in general the AIs are demonetizing labor. It's like, you know, people used to work in farms pulling plows or something, right? You know, it's like they just won't, right? I mean, all of the things that people used to do, we're just not going to do them anymore. So figure out what we didn't used to do that you can do now that has value to the civilization. Almost certainly it's with tools that didn't exist 20 years ago. Conventional wisdom will be don't do it. We didn't do it. We don't do it that way. We never did it like that. You know that you know that's conventional wisdom. If you want to be successful then you have to break conventional wisdom. You have to think for yourself. You have to be an innovator and creative. And the world's full of examples of people that are doing that. You see Elon Musk rethinking things, rethinking the auto industry. You you see you see lots of people see Palmer Lucky, you know, think different, right? And the way you'll know they think different is they invent some cool new thing that no one ever showed you before and then you try it and it works. And so we're going to see more and more of that. That's the secret.

Last one because I have to. There's no second best crypto asset. There's only one crypto asset and that's Bitcoin. This one of the top Michael Sailor memes. Do you still believe the same?

I do. I think Bitcoin is the dominant digital monetary network of the world. Human civilization, it settles on protocols there. For example, with mathematics, there was Babylonian math B, you know, 360 degrees, 60s, 12, 24 hours. There was Greek math. There was Roman math, Roman numerals. So, Arabic wasn't the first protocol. It was just the best Arabic math. Zero. It wasn't Greek. It wasn't Roman. Right? Why are Christians in Northern Europe using Arabic math? Because it was a better protocol, right? And that's been good for a thousand years. There is no second best math protocol, right? If you look at um language, we're speaking English. Why? Because all the rich powerful people speak English. Because the British won the Napoleonic War. If Napoleon had won, we'd probably be speaking French. If the Russians had won, right, we'd be speaking Russian. Billions of people speak English. If you speak English, you'll get your message across better. You'll sell something at a higher price. You'll buy things at a lower price. More people will listen to you. You'll make more money. There is no second best language. It's the best language.

That's why this podcast is in English, even though my mother tongue is

definitely not English.

It's It is what it is. And and with Bitcoin, Bitcoin is digital capital, right? What you've got glass beads, you got bales of tobacco, you know, and in the biblical times they use ox, cows, cattle as capital, you know, bushels of wheat. We've used bars of silver. You know, for a while, you know, I think Andy was on the silver standard, then there was the gold standard. And at the end of the day, the human civilization settles upon the highest powered capital asset, the highest powered money. And Bitcoin is is the most thermodynamically sound. And so, well, how do you know? Well, because it's like worth $1.5 trillion. Okay. Well, how did it get to be worth that? Well, the smartest people with the most money and the most power, they had to choose a protocol. And they could have chose any protocol. There were 10,000 protocols. They could have chose all the Bitcoin forks. They chose this one. Well, how do you know they chose it? Because they have the most money and the most power and it's the most it's literally the most powerful and has the most money in it. Now, um what happens when all of the powerful, wealthy, influential people choose, uh a numerical protocol, uh um electrical protocol, right? Uh a language protocol, a mathematical protocol, or an economic protocol, right? Or even like computer protocol, networking pro TCPIP. I can give you 10 other ways to do it, right? And I you know there are 10 other languages there are 10 other maths you know there's 10 other whatever but at the end of the day there's a massive network effect you know and um, you know you see this in the in the history of technology and I studied technology at MIT I studied the history of science so you know the railroad track gauge it's like the Roman war chariot carves grooves we railroads the same width if you have that width you want to manufacture the train cars that width Right. Just like why is every container the same size? Because they're all modular. Because I can move them from a container ship to a truck to a plane to a train. Well, what if you want to make it six inches wider? It doesn't fit. Well, couldn't you make it narrower or wider, a different shape? You could, but all of the rich powerful people picked the one format. And how do you know? Because if you look at the port in Miami, there's like ships and they're stacked up with these containers and every every port in the world, whether it's the Chinese or whether it's the Russians or whether it's the Europeans or whether it's the Americans or the Europeans, they have the same format and it just is what it is. And why? Because people aren't stupid. And at some point, why don't we create cars that are 32 feet wide? You could. You could. They just don't fit in the parking space and they won't get in the garage and they won't drive down the road. And so humans create machines that work compat that are compatible with protocols because once a protocol hits critical mass, there's a massive network effect and all of the money and the power and the influence of the world falls. How many companies have manufactured a car that's like this wide? How many of them agreed on language and religion and politics? None of them. But they all can agree on make the car a certain width. And uh and so Bitcoin is the winner. Why? Because it was the best. It was the best suited protocol. You could have made it 2% inflationary. You could have made it, you know, different. You could have made it more functional. It turns out the lack of functionality and the stability was the feature. it was the best suited to be a digital capital network for the world. That's what it's become. And uh once something locks in like that, you know, it's nearly impossible to to replace that protocol. You have to have some cataclysmic, you know, death of all the dinosaurs due to an asteroid strike 80 million years ago type event. It's like, well, the world goes dark for a million years and then a million years later, maybe something else comes back. That's how we replace the dinosaurs, right? Mammals became the apex predators instead of the dinosaurs after an asteroid strike. But I'm not expecting an asteroid strike. And so, the logical thing to do and the advice to give to your kids is learn Arabic, Matt, reading, writing, arithmetic, right? Learn to read English. Learn to write the English language. Learn to work with Arabic numerals. Learn Bitcoin if you want to be wealthy and powerful because that's where all the money is. That's where all the power is. And why like like I really wish people spoke, you know, Swahili. I know you wish it and you were born speaking Swahili, but the point is that's not where all the money and the power is. So you can either be the richest, most powerful dude, you know, in a little pond, or you can accept the rest of the world as it is and decide that you want to be a participant in the global digital economy. And the global digital economy is going to run on digital capital and Bitcoin is digital capital.

There's no second best. Thank you so much, Michael, for doing that. That was that was fantastic. And from all of us, the Cyber Hornets, thank you for carrying us, the whole industry, on your shoulders for the last six years through great times and through bad times. We would certainly not be here without you, and I would not be either. So, from all of us, thank you.

Well, thank you. You're kind. I appreciate being on the mission and on the journey with each and every one of you. As you probably know by now, I host some of the biggest name in Bitcoin and crypto on my podcast, but a lot of the best stuff never makes it on air. The Shift newsletter is where I share that raw behind-the-scene alpha, the insight, stories, and lessons straight from my guests that you won't hear anywhere else. If you want the real inside take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.