Strategy Inc (MSTR) Earnings Call Transcript & Summary

We don't out [indiscernible]. So I'm guessing it was quite a party last night. 8 a.m. is an early call, I get it. Anyway. I'm Trish Regan. For those of you that did not meet me yesterday, we had a wonderful conversation with Vivek Ramaswamy, Former Presidential Candidate. I myself, I'm a former host on all 3 of the big business networks, CNBC, Bloomberg and Fox Business, and we now have my own show, The Trish Regan Show and 76research, which is an independent digital financial content company. Anyway, I'm so thrilled this morning to get the chance to introduce you to a man who really doesn't need an introduction. If you're familiar at all with Bitcoin, you are familiar with Michael Saylor because he is innovative and courageous and thoughtful and kind of a genius. I think we've had the chance to talk to a couple of geniuses here too, over the last 24 hours. But just to give you a little background on Michael, it's kind of incredible. I got to tell you, I'm reading his bio, and I knew he was really, really smart, but then I saw he had a dual degree in aeronautics and astronautics. So I didn't even realize those are 2 entirely different things. As well as, by the way, the history of science, this is all from MIT. He was valedictorian. He went to MIT on a full scholarship from the Air Force Reserve, which is just amazing, Officer Training Corps Scholarship. The other thing that you may not know about Michael Saylor is not only is he a computer genius who is willing to make big calls at really challenging times, right? Don't forget, this is the guy who went all in and made that call on Bitcoin in August of 2020, putting all of his cash reserves in the company, a software company, into Bitcoin, and it was a bet that has paid off for him, but certainly, I'm sure, at times, quite nerve-racking, but he's a true believer, and he's going to tell us today why he thinks Bitcoin is actually going to $13 million over the next 21 years. So I'm excited to hear that. But he also has a background in music. And I just find that really incredible because it's one thing, right, for the brain to think about science and technology and the future, it's another thing to have that other component, that other side to you, and he certainly does. He's got a background as a drummer and as a guitar player. In fact, while at MIT in his free time, he'd play guitar in a rock band and learned to fly gliders. So that's what you call a well-rounded individual in more ways than one. Anyway, truly a visionary, and we're so lucky to have him here at H.C. Wainwright today for this conference as the keynote speaker. I want to welcome to the stage everyone, a visionary, Michael Saylor.

Thanks for joining me today. In about 20 years, people look back and say, where were you during the digital gold rush? And if you recognized it and you did something about it, you'll be rich. And if you recognized it and talked about it, you'll have good stories. And there'll be a lot of people that didn't recognize it, and they'll be wherever they are. And I'm going to spend my time this morning describing it to you. And hopefully, you'll be one of the ones that get rich. So let's start. My clicker, okay. The investors dilemma. Investors have a simple dilemma, how do you make money? And what does it mean to make money? Well, how do I outperform the cost of capital? If we look at the performance of a bunch of assets, and this is most assets over the last 14 years, what you can see is that investing in a bunch of things don't even beat the CPI, but there are a number of things that will beat the CPI. I mean, your typical diversified portfolio, your stocks, your real estate, et cetera. But the question is what's the real benchmark for an investor? And I don't think it's the CPI. The CPI is a very synthetic metric, which is cherry-picked by a bunch of government-paid economists in order to be the lowest possible measure of inflation. If things get too expensive, they throw it out of the CPI. A much better measure would be the monitory inflation rate or the expansion of the M2 money supply. And it turns out that the expansion of the money supply very, very closely tracks the performance of the S&P Index over 100 years. And when you think about it like that, what you realize is that when you invest your money in the S&P Index, you're not making money, you're just not losing money. If you were rich 100 years ago and you held a diversified portfolio of stocks, you're still rich. If you bought a bunch of currency or bonds, your poor. And you can see here, over the past 4 years, the S&P or the monetary inflation rate, looks like about 13%. And not many things beat that inflation rate. It's very, very difficult. In fact, if you're beating that hurdle, you probably beat it with big tech. You beat it with Apple and Amazon and Google and Facebook because the best idea in the 21st century has been buy a big tech digital monopoly like a Meta or a Microsoft, somebody that everybody needs, nobody can stop and if you bought it before people understood it, you're probably doing okay. And even after they understood it, you're probably okay. But diversification generally is selling the winner to buy the losers. If you diversified out of Amazon, you lost. If you diversified out of Apple, you lost. If you diversified out of Microsoft into any of the 100,000 other business software companies, you lost. And why is that? Because in the modern era, if you can establish a digital network, which goes to 1 billion people, it's got such a crushing economic advantage that it's unlikely that anybody else is going to be able to catch up with it and Microsoft is proving that today so many years after it was founded. Now the question is what's the solution? Is Bitcoin the solution? Well, the last 4 years, Bitcoin's performance is 46%. It's totally crushing every other asset class and every other idea, and it's definitely beating the rate of monetary inflation. This is a chart put out by Bitwise yesterday. This is the last 14 years of Bitcoin. As you can see, the top-performing assets at the top of the chart, Bitcoin is winning the Investor Super Bowl 11 out of the last 14 years. If you're paying attention, you got to wonder like why is it winning? And is this a gimmick? Now the advocates of Bitcoin, such as myself, who wear orange ties, we think that Bitcoin is the first perfect money. We think Bitcoin is paradigm shift. We think Bitcoin is the singularity where science collides with economics. We think you have to rethink economics, you have to rethink capital, you have to rethink money, you have to rethink business, you have to rethink corporate finance. That's what we think. And that's why we're winning. We think there's a fundamental technology shift here, there's a fundamental paradigm shift here, and we think we're going to keep winning. We think Bitcoin is digital gold. We think it has all of the virtues of sound money, none of devices of physical gold, which was that barbaric relic. There's a lot of problems with gold. We think that Satoshi got rid of or engineered out all of the problems and just kept the good stuff. That's what we think. What do the skeptics think? Skeptics of Bitcoin think, it's too good to be true. It's money for criminals. There's no use case. It's too volatile. It's backed by nothing. The government is going to ban it, it's going to be [indiscernible] by the next Yoyocoin or it's going to be hacked. And we hear this over and over and over and over again. And if you ignored something that's won 11 of the last 14 years, either didn't know about it or maybe you thought one of these concerns was enough to keep you out of the asset. In my experience, everyone is against Bitcoin before they're for Bitcoin, including me. And my journey from skeptic to believer, this is my public utterance on December 18, 2013. Bitcoin's days are numbered. It's just a matter of time before it goes -- it suffers the same fate as online gambling. Government's going to ban it. This is what I -- by the way, that's what I thought that Bitcoin was about $100 a share or $100 a Bitcoin. When Bitcoin was $10,000 a Bitcoin, 100x later, this is what I thought, "Oh my God, I have seen the light. Bitcoin is going to change the world. It's unstoppable. It's growing exponentially smarter, faster and stronger. This is the Bitcoin journey, and everybody goes through this journey. You're born a denier. It's [indiscernible]. It's a scam. This is the Peter Schiff. You're born a Peter Schiff, maybe you stay a Peter Schiff. One hour is enough to be a skeptic. After one hour, you've learned just enough to hurt yourself. In 10 hours, you think, well, maybe it's an asset. I think I'll trade it. I'm going to buy it cheap and sell it when it's expensive. And then, I'm going to buy it back cheap and I'm just going to arbitrage something this way and that way. After 100 hours of study, of thinking about it, you become an investor. This is a digital monitoring network. This is like Google for money. This is Facebook for money, Facebook for rich people. Rupert Murdoch never brought 100 million friends to Facebook. When Rupert Murdoch buys into Bitcoin, the billionaire brings billions with them, right? The trading idea is not that complicated in the investor ideas, it's the next big tech network. It's a digital monopoly for money. After about 1,000 hours, you become a maximus. And a maximus is, this is an ethical imperative. The world is a better place with this, right? The money is broken, the world is broken, billions of people are suffering, fix the money, fix the world. That is the Bitcoin journey. Now depression. It's 100 hours to an investor. I only have 41 minutes left. Welcome to the 1-hour Bitcoin investor crash course. I am going to try to get you to an investor level by the time I'm done. But first, we require a return to first principles. This is my alma mater, MIT. That's the great court. All around the molding of the great court are all the great scientists, Newton and Curie and Maxwell and Darwin. And they're trying to tell you that certain people had ideas that changed the world, you might want to study them. So let's start with some basic principles. What is Bitcoin? Bitcoin represents the digital transformation of energy. Apple is digitally transforming photos and Google is digitally transforming books and Amazon digitally transformed the storefront, and NVIDIA is working to digitally transform intelligence. But what does it mean to digitally transform energy? The human civilization, it's built on energy. We're here because of energy. The fact that humans figured out how to capture, create, channel energy, that's what makes us what we are. The first big energy paradigm shift or big energy revolution was fire. We basically extracted energy for matter and we turned it into heat and light. And without that, we're no better than the apes. The next big energy transformation is water, which is really capturing the energy and gravity via the fluid of water, and that discovery of how you extract energy from water flowing downhill and turn it into mechanical energy, it's what makes mills. We'll give that to the Romans and the Greeks. James Watt figured out how to put energy into a factory without a water supply, portable energy. The significance of the steam engine is you could put a factory in a city that didn't have a stream, didn't have a waterfall. It's a big deal. It made the industrial revolution possible. It elevated the British to a new level to dominate the world. John D. Rockefeller pioneered the manufacturing of standard oil, that meant chemical energy that you could transport, you could store, you could convert in the mechanical thermal light, electrical energy or petroleum product, a lycra, polyester. You want to get rich, jump on to an energy revolution. Think about how much money was made here. So much money that there's still trillions of dollars worth of oil companies, all founded by this one man. Electricity, it's electrical energy that you can channel cleanly and silently over long distances and convert into heat, light, sound, vision. We extract clean energy with a nuclear reaction changes the world. Now by the way, a little aside, we attribute that to Enrico Fermi. He did that at University of Chicago. University of Chicago was the university founded by John D. Rockefeller. There's a little bit of irony there. What's Bitcoin? Bitcoin is a discovery of digital energy that can be programmed by a computer and channel through time and space. Okay, that's a lot to wrap your head around. There's a lot of applications with digital energy. What does it mean? I mean something conservative. It means that I've got $1 billion worth of something, and I can move it anywhere else in the universe or hold it for 1,000 years and it's still something, right? We haven't figured out how to do that until Satoshi. What's the most lucrative application of digital energy? It's the digital transformation of capital. Okay. I learned a lot of stuff in school. I got a pretty decent education. I went to the finest trade school in the world, Harvard people used to call us. They did not teach me about money. They did not teach me about capital. They did not teach me about economics, and most of what I did get taught was just wrong in the economic political sphere. But let's start with a basic observation, right? Global wealth is distributed across a lot of assets. There's $900 trillion worth of wealth here. You can come up with different charts, but this is a reasonable one. Now you could think of it as, I own some real estate, I own some bonds, I own some money, some currency, I own some equity, I own some yacht, I own some gold. But the real question is, why do you own this stuff? And it's divided in 2 categories. You own it because it's got utility. You want to look at the yacht, you want to live in the building. You want to hang out in the yacht, you want to fly the aircraft. Maybe you need the currency for working capital to operate your bakery or your manufacturing plant, maybe you have your money in coal or oil or some other feedstock. So that's one reason to have assets. And the other portion of this is just long-term capital. I'm just storing value. It's a rich person that has a bunch of money and they don't know what to do with it, so they buy something, right? Whenever you hear about a billionaire that bought 16 expensive houses, you're like, well, they can live in one, why they keep buying things? Well, because they think it's a better investment than just putting the money in the bank. So when you think about the world that way, you say long-term capital, store of value, that's half the money in the world or half the wallet in the world, $450 trillion. What is capital? This is -- by the way, if you go in Chat GPT or Google capital, define capital, the definitions are awful. I feel like you go back 300 years, they had a better idea of what capital was than if you look at the world today. Nobody thinks about capital, right? Not since 1971, so you'll find really awful definitions of capital. But what is it really? Well, it's money, wealth, power, value. It's economic energy. Capital is economic energy. If you had 1% of all of the capital in a country 100 years ago, how do you keep it, right? You can keep 1% of the currency, but that might not be equal to 1% of the economic energy. So when you think about first principles here, you realize that Bitcoin represents the transformation of our capital, from financial and physical assets to digital assets. The first law of money says, L equals V divided by M. The lifespan of an asset is equal to the value of the asset divided by the maintenance cost of the asset. If you buy a $10 million yacht and you spend $1.5 million a year to maintain the yacht, your $10 million is gone in 6 years, right? Your money -- the useful life of the yacht is 6 years. You're not going to stay rich buying and investing in yachts or fill in the blank. If you buy a house in Miami Beach, you're going to pay as much in taxes as the house costs you within 20 years. It's not a store of value. When you start to apply this formula to all these assets you can put your capital into, you realize that some of them have very short useful life. The Argentine peso won't hold your capital more than 2 years, nor will the Turkish lira. The U.S. dollar might hold your capital for 10 to 15 years. You invest in stocks, maybe 25; bonds, not more than 30; diversified mutual fund, the S&P Index, you're still getting diluted by that. So all of these financial assets have a useful life 10, 20, 30 years. And why? Because of all these risk factors. This morning, the news is Apple gets a $14 billion tax bill, oops. The next news is Google gets fined $2.5 billion by the EU, oops. Ports, taxes, war, crime, oops, maybe there's a tariff that's going to interfere with your trade. Think about all the risk factors when you're buying a financial asset, hyperinflation, right? Maybe you suffer from a new regulation. It's just illegal to do what you do, oops. If you invest in a stock and read the 10-K, there's 20 pages of these risk factors. I am an expert on these risk factors. We came public in '98. Our company must have published hundreds and hundreds of pages of risk factors. So there must be hundreds of thousands, maybe millions of pages of SEC filings on risk factors. This is the dilemma of storing your capital and equity if you're an investor. So what wealthy families do, they run to physical assets. And they invest in what, probably not yachts and Ferraris, but maybe gold or paintings or land. Land is everybody's favorite thing, but land gets taxed at 1% a year. The average property tax rate is 1.1%, and that means it's gone in 91 years if the property value doesn't get assessed up. When the government assesses the property value up, they tax your land away from you in 30 or 40 years. You don't own it, you're renting it. So there's a lot of physical risk factors here, right? A lot of taxes, right? We come up with a ton of ways to tax property, a lot of other risks you might run into, and they're so creative. A riot -- the headline this morning, Riots in Downtown D.C. do damage to certain properties. What if the traffic pattern changes, right? So many different risk factors. So these are the dilemmas of holding physical and financial assets. Satoshi discovered a method to transfer value without a trusted intermediary. Go find the Janet Yellen speech, the legend of Satoshi and Janet Yellen, the Secretary of the Treasury says, Satoshi, a person or person's name Satoshi figured out how to transfer value without a trusted intermediary. This gets repeated over and over and over again. Okay. Well, here's the news flash. That's not the most important insight, and that's not the most important thing Satoshi discovered. It's just the thing that people repeat because it's trait. Yes, I can send $1 billion from here to Tokyo without a bank. This is the big idea. Satoshi discovered a method to store value without a trusted intermediary, channeling energy through time and space. When I transfer $1 billion from here to Tokyo, I move the money through space. When I store the $1 billion for 1,000 years, that's revolutionary. Nobody in the history of the world ever figured out how to store capital for 100 years or 10 years or 1,000 years. But of course, if you think about it, you realize that the implication of not needing a trusted intermediary to transfer value is, I don't need a trusted intermediary to store the value. Now I found something completely new. I found an asset without the financial risk of a currency of stock or a bond or the physical risk of real estate or property. I have created a revolutionary advance in asset useful life. The lifespan of all your traditional conventional assets is 30, 40, 50 years, and you're going to get up every morning and watch CNBC to find out whether Apple won or lost the freaking tax lawsuit. And I watch that, and I thought, man, that's just awful news for Apple shareholders today. You get a $14 billion tax bill. That's why you have to pay attention every day of your life and every quarter, and you got to rebalance your portfolio. What if you didn't have to pay attention, right? When you buy a bitcoin and you even put it in cold storage or put it with a custodian, you're paying 10 basis points. The first law of money says, you divide the value of the asset by the maintenance cost. So something divided by 10 basis points lives 1,000 years. This is the longest duration financial -- longest duration asset, the human race has figured out, right, we've invented. This is digital capital, capital economic energy, digital capital, digital economic energy. Well, what is digital capital mean to an investor, okay? You got $1 billion or $100 million, you buy a $100 million building in Manhattan. That's capital invested in real estate. That is the conventional best idea of the 20th century for every rich family in the world. I've met -- I can't tell you how many multibillionaire, wealthy families I've met. They all own real estate. They all own property. Bitcoin offers the benefit of holding that building, but without the liabilities of a conspicuous, immobile asset. So what do we do when we digitally transform the building? Well, first, we strip away all the bad stuff. No tax, no traffic, no tenants, no torts, no trouble, no mayor, no weather, no corrosion, strip away all the bad stuff and then add the good stuff. It's invisible building, right? No one's going to hate you, resent you and want to take your wealth from you because they walk past your big building every day. It's invisible. It's indestructible. It's immortal. It's teleportable. It's programmable on a computer. It's divisible. It's musical. I promised one musical reference. What do I mean? You can vibrate the building at 10 kilohertz. You can vibrate the building 10,000 times a minute, 10,000 times a second. I can move it 87,000 times on variable frequencies on a weekend. I can construct a symphony with the capital. Why don't you try to move a real building once a second? What about A440? Try to move a real building at 440 Hertz. You can't do it. This is something that you can actually manipulate in a harmonious faction on the frequency of the economic universe. And it's fungible. You own a $100 million building in New York City, it's not like a $100 million building in Tokyo. $100 million of Bitcoin is like $100 million of Bitcoin in Tokyo. Everybody understands what you're getting, and it's configurable. So digital capital is like all the benefits of holding something tangible with none of the detriments, right? And people can't quite wrap their head around that yet. That takes a while to think through, but that's okay. When they figure it out, by the way, you'll pay $10 million of Bitcoin. Until they figure it out, you get Bitcoin at a discount. Digital Capital is global capital. Look at the map of the world. I'm going to give you $100 million and drop you in Africa and tell you to buy anything you want, hold it for 100 years. What do you want to buy? Where do you want to buy it? I would represent to you, there's nothing on the entire continent, you would rather buy than a Bitcoin -- than Bitcoin in that situation. Look at South America, look at Africa, look at Asia. Look at these prices and think about investing $1 billion in any of them. Think about capitalizing a company. You've got the wealthiest company in Nigeria. What are you going to capitalize it on? The Nigerian naira, right, the Turkish lira, the Lebanese pound. The Chinese don't want their currency. The Europeans don't want their currency. If you talk to people in the stable coin industry, they'll tell you, well, we got digital dollars, we've got digital euros. They don't want digital euros. They want digital dollars. And they want the digital dollars for a short period of time, that's because it's tied to North America. Nobody wants to own anything that isn't tied into the most secure and most powerful network in the world. And that being the case, if you're a wealthy person, if you're a middle-class person, if you're a working class person and you need a savings account anywhere on earth, and you have a mobile phone, you're going to want a Bitcoin. And that's what Bitcoin represents here. It's superior to foreign debt equity, real estate, currency as capital asset. This is difficult for someone in Manhattan to grasp. You live in the greatest city in the world, right? And presumably, the most secure city in the most secure economic network in the most powerful country that's ever existed, right? Anybody that owns an apartment in Manhattan would say, I'd never sell it. Everything else is a trade down, right? Everything is a trade down. I gift it to my children, I'm not leaving. But now put yourself in South America, in Venezuela or Argentina or Brazil or put yourself in Nigeria or put yourself in Lebanon and Syria. The Chinese have capital controls, you can only take $50,000 out of China every year. Why do you think that is? Because everybody wants to take their capital out of China. The Chinese currency would collapse if they actually eliminate the capital controls. What about volatility? Everybody talks about volatility. Well, why is it volatile? Well, it's volatile because anyone anywhere can trade it because it's useful, because if you need to sell $1 billion or something on Saturday night in a missile crisis, you can do it. It's the only thing you can do it with. It's volatile because there's no limitations because there's thousands of active exchanges because it's not supported well on the traditional banking system. It's volatile because it trades 8,760 hours a year, 5x the traditional market. It's volatile because you can bypass the exchanges and it's volatile because it's cross-collateralized every other kind of crypto. That's why it's volatile. But the volatility is a feature, it's not a bug. And this is a very important idea, right? We live in a world where most corporations think capital is toxic and volatility is a bug, and they try to eliminate volatility and they give away their capital. And I'm here to say, volatility is vitality, it's life, and you should keep your capital, right? The volatility represents the advantage of Bitcoin. For investors, it's going to drive superior returns over the long term. For traders, it gives you a superior yield in the near term. For financiers, it's a superior opportunity to securitize that asset. And for analysts, it's just a superior interest. There's always something going on. What about performance? Everyone is searching for an asset uncorrelated to the S&P 500 with higher returns on a risk-adjusted basis, right? This is the Holy Grail, a portfolio theory. Well, you can reason from first principles, let's just think about it, Bitcoin's an asset without counterparty risk. It doesn't give you risk facing a competitor, a country, a corporation, a creditor, a culture or currency. All these other assets have a certain risk facing one of these elements. So from first principles, you can conclude, this thing is and should be and will be uncorrelated. But you don't have to use first principles. This is Fidelity's analytics, right? So this is published. Bitcoin has the highest sharp ratio. Therefore, it has the highest risk-adjusted return. And you can see the correlation to the S&P. It's not correlated to the S&P. So either you reason from first principles or you look backwards at the statistics and some people learn from studying data and some people think about it. I mean, the problem with looking backwards is when Godzilla arrives to the playground, all of your statistical models of historic performance of kids playing in the playground, they're all out of the window, right? I mean, I can change the world by bringing extraordinary new energy and power into it. But that being the case, the statistics say it is the uncorrelated asset with the best performance. Well, let's look at this chart. This is 5 years since MicroStrategy adopted the Bitcoin standard. Bitcoin is up 46%. The S&P is up 13%. So what you see is conventional cost of capital is 13%, digital cost of capital is 46%. What's the safest investment? Bonds minus 4% a year. The government requires banks capitalized with bonds, oops. It's too good to be true. Won't the government ban it, right? I mean, that's the reaction. People look at this and they're like, well, the government wants you to use their bonds, and this is just 10x better, aren't they going to just ban it? Okay. Well, we get that question a lot. In fact, we get a lot of questions. We get, will it be banned, can it be copied, can it be hacked? These are the 3 questions that I had to ask, my Board had to ask, my officers and directors, they had to ask before MicroStrategy went on this Bitcoin journey. If you're a company, you'll have to answer these questions. So I ask these questions to the silicon [indiscernible], ChatGPT. And I said, and you can do it yourself. I said list every country where it's legal to own Bitcoin. And it says pretty much everywhere, it's legal to own Bitcoin. Okay, well, that's interesting. I said, list every country where it's illegal to own Bitcoin. It said, well, China may be, but it says, actually, it's not illegal to own Bitcoin in China. They just -- you just can't ban it -- sorry, you just can't mine it and trade it. But you can own it. And then it said, these are the countries, Algeria, Bangladesh, Egypt, Morocco, Nepal, Iraq, Qatar, Tunisia, North Macedona. So if those are your economic leaders, right? If you aspire to be like those countries, then maybe -- and if you think that we're going to go the way of those countries, maybe you're afraid of it. But you'll see here, even Chat points out that most of the concerns are around capital controls and fraud and they'll probably, over time, get comfortable with this. I asked has Bitcoin ever been hacked and it says, no, it's never been hacked. The network has never been hacked. All the things you think are hacks are really just exchanges failing, like Mt. Gox. Lot of banks that gave you mortgages on real estate and the bank failed, but that doesn't mean the real estate's gone, the real estate is still there, the building is still there. So no, it's never been hacked. Has it been copied? Yes, it's been copied a few times. Bitcoin Satoshis Vision, Bitcoin Cash, Bitcoin Gold, that's interesting. Well, what happened? How do they perform? Well, none of these forks have come close to Bitcoin's success. They all failed. That's the polite way of Chat telling you they failed. But here's the actual chart. This is what Bitcoin Cash does against Bitcoin, it collapses Bitcoin Gold, collapses Litecoin, collapses Satoshi Vision, collapses Dogecoin. You can see when Elon went on Saturday Night Live, there's a spike, since then, collapses, Ethereum collapsing, right? So yes, it's been copied. It's been copied 4 million times. They're all losing. I asked Chat why institutional investors should allocate to Bitcoin. This is what it said. Diversification, inflation hedge, growth, potential, digital gold narrative, reasonable. Then we asked the guy that runs $10 trillion...

No, I know you have been a leader in willing to embrace crypto. You haven't made it so that people can be in Bitcoin. We hear that you were thinking about Ethereum. These are incredible things. How -- now BlackRock is not known to say a [indiscernible] by any means. So you obviously must believe that this may be as an alternative. This is an alternative in order to be able because of the deficit, maybe something long term people should have?

Absolutely. As you know, I was a skeptic. I was a proud skeptic. And I studied it, learned about it, and I came away saying, okay, my opinion, 5 years ago was wrong, here's my opinion to say, this is what I believe in today. I believe in the opportunity today. I believe Bitcoin is legitimate. I'm not trying to say there's not misuses, like everything else. But it is a legitimate financial instrument that allows you to have maybe uncorrelated, non-correlated type of returns. I believe it is an instrument that you invest in when you're more frightened though. It is an instrument when you believe that countries are debasing their currency by excess deficits, and some countries are. I believe we have countries where you're frightened of your everyday existence. And if you have an opportunity to invest in something that is outside your country's control, then you can have more financial control. And so I'm a major believer that there is a role for Bitcoin in portfolios. I believe you're going to see that as one of the asset classes that we all look at. I look at it as digital gold, as I said before, and I do believe there's a real need for everyone to look at it as one alternative to, I would say, the optimism that I have in the...

So there you go. All of the same impressions, the same journey, the same experience, the same insights. If you spend enough time, you start to realize that there's an opportunity here. BlackRock went ahead and launched IBIT. IBIT is the leading Bitcoin spot ETF product and is the most successful ETF launched in the history of ETFs. And so that's the benefit of doing the work and embracing the asset class. People ask what backs bitcoin? It's backed by power, okay? 700 exahashes, all the computer power of every computer on earth from the other cloud providers. 18 gigawatts is like 18 full-on nuclear reactors, it's more than the power that drives the U.S. Navy. $800 billion invested, that's just the rolling -- the 200-week simple moving average of Bitcoin. That's how much money has been put into Bitcoin. 220 million holders of Bitcoin and 420 million crypto enthusiasts. That's political power, right? In fact, Bitcoin is the most powerful crypto network in the world. It's got the most popular support, regulatory support, technical support, computer power, electrical power, political power, economic power. Once you understand these things, it's not any one thing. It's many, many things. But the result is, all the smart money in the world looking for a way to store its value forever has sifted through 4 million cryptos, picked this one, put $800 billion into it, all the stupid money is buying the other stuff. So you're asking, well, what's going to protect this network? Well, all the smart people with all the money and all the power, pick the winner. What protects Google, what protects Apple, what protects Microsoft? Why is Meta entrained? It's because at the end of the day, there's a bunch of people trying something, and there's got to be a winner. What protects Amazon? Well, there's a winner, right? This is the winner. And what's this the winner of? It's the winner of the Digital Capital Award. This is the dominant digital capital network. The MicroStrategy Bitcoin story, we started defensive, we went to opportunistic, we then became strategic, right? There's a Saylor Tracker. Every single green dot is MicroStrategy buying Bitcoin. As you noticed, I timed the highs and the lows well. We just buy all the time. There are no red dots. There is no selling, there is only buying. You buy when it's high, you buy when it's low. This is another way to see the chart. MicroStrategy simply built up its Bitcoin holdings progressively to 226,500 Bitcoin. We've invested $8.3 billion in that. And what's the result? Well, we bought an asset that was appreciating 46% a year and we sold the asset doing minus 4% a year, and then we levered it. Most companies hold minus 4% bonds. In fact, that's what they'll teach you at Harvard Business School. Okay. What happened? Well, this is as of yesterday. As of close of market yesterday, MicroStrategy stocks up 910%. The best performing stock in the S&P 500 is NVIDIA, up 854%. MicroStrategy beats every single stock in the S&P 500, crushes them, right? What's the -- what else do you know? Look at Tesla, Google, Apple, Microsoft, those are all digital monopolies. That's what you get. So what's the secret here? Well, the secret is simple. You take an asset up 376% and you lever it and securitize it. If you can borrow $1 billion at 0% interest and buy Bitcoin with it, I mean, you tell me, is there any idea that you have that you wouldn't borrow money -- $1 billion of money at 0% interest, no recourse, no covenants for 7 years and buy that thing, what's the return on that, right? If you just bought the S&P Index with 0 cost money, you would have done okay. So MicroStrategy levers bitcoin. Look at Bitcoin versus the S&P, and you can see the cost of being conventional versus the cost of the opportunity of the digital transformation. And I will say, for the most part, it's impossible for your company to beat the Magnificent Seven. You're not going to beat Apple and Microsoft and Meta with any conventional strategy. You're going to have to think different, just like Steve Jobs said, think different. That's another way to look at the top 10 performing stocks in the S&P. And you see even the #9 performing stock is only doing up 300%. It's really hard, and that's because they're using their P&L to do the heavy lifting instead of their balance sheet. What we're looking at is the birth of an asset class, right? Bitcoin is evolving from idealist institutions, right? The first years were the idealist crypto cowboy years. We just went through the crazy years. Now we're in the era of institutional adoption. And then there's a point looming on the horizon, we call 0.99 in the year 2034. What is that? Well, we'll get to it in a second. First of all, these are the milestones that made Bitcoin an asset class and a macular consumption by Satoshi. Pizza Day when Bitcoin started first trading, Satoshi walks away. Now there's no founder, it becomes a commodity. IRS designation is property in 2014, the Blocksize War settles the issue of will it be copied, the fork of the Blocksize Wars. The first Bitcoin miner to go public in 2017, Fidelity enters the space in 2018. COVID hits and catalyzes a revolutionary change in financial thinking in 2020. MicroStrategy, Square, Tesla, Coinbase, all start to adopt Bitcoin. Positive comments by Gensler and Powell in '21, '22, this is an asset, it's not going to be banned. You could see it then. The speech by Janet Yellen, the legend of Satoshi speech. That was a big milestone. If you were paying attention to it, you would have seen that was a bullish indicator. The Bitcoin spot ETFs are launched in January of this year. The SAB 121 movement to repeal SAB 121 in Congress in May, that's the rule that keeps banks from custodying Bitcoin. The embrace of crypto by Trump and Kennedy, Morgan Stanley approves IBIT and FBTC for solicited sale in August of this year. Fair value accounting for Bitcoin takes place in January of 2025. This is driving the digital transformation in the capital markets. The digital future is faster, it's smarter, it's stronger. We don't want 19th century speed or 20th century speed, right? Bars of gold settled in T plus 1 year. Takes a year to settle. No one's got a year. So we went to stocks and bonds. They took a week to settle in 1970 and '80. Eventually, they got down to a day. Bitcoin settles in an hour, I can move $10 billion in an hour. But that's just the beginning because we're going from someone, somewhere, sometime can settle in a day to a week to anyone, anywhere, anytime can settle any amount of money in an hour. But Bitcoin is an open digital protocol. And what that means is it's going to improve exponentially faster, stronger, smarter. Now think about T plus 1 minute because that's what you can do when you start to embrace the open protocol. And on the Lightning network, T plus 1 second. But really, we're headed toward a world where we're going to settle T plus 1 millisecond. So you can see here, gold was never going to work in the 20th century. And you can see why T plus 1 day for a few people is never going to work for the digital future. And that takes us to the digital gold rush. Today, there's 19.7 million Bitcoin. In 2034, there will be 20.8 million Bitcoin. You've got 10 years. That's the gold rush. We're headed toward a point when 99% of all the bitcoin is mined, that's the point of absolute scarcity. The last 200,000 Bitcoin come out over 106 years. What does that mean? There's going to be reflective price shock at 0.99. At 0.99, and you've only got 3,759 days, that's all you have. There's only 1,145,000 Bitcoin for sale. At today's price, it's $74 billion. MicroStrategy will buy $5 billion of Bitcoin in 1 year. This is not a lot, this is a trivial amount. The price cannot stay at this level. That's $20 million a day. We announced a $2 billion equity offering. We raised $2.4 billion in the first 6 months of this year. Look at those numbers. It's not that much. This is a phenomenon. After 0.99, Bitcoin creation is offset by lost Bitcoin. The supply is effectively fixed. It's the inflection point where Bitcoin becomes the world's first deflationary asset. There's never been anything like it, right? It's more scarce than land in Manhattan. It's more scarce than anything you can name, anything you've ever invented. The fact is, no one's ever seen this before. Therefore, you can't compare it to anything. It becomes the world's first perfect money. Of course, there's not a textbook written on it. The Austrians didn't imagine it. You couldn't create it before them. Institutional adoption of Bitcoin, they're all coming, right? This is the institutional distribution of Bitcoin today, 12 ETFs in the U.S., 28 global ETFs. They're holding 1 million Bitcoin. Every one of them is solving a custody and a compliance issue. There's 27 publicly traded Bitcoin miners, there's 28 public companies with Bitcoin. There's all sorts of derivatives. You can see this is an asset class, and you can see the distribution across institutional investors. This is no longer a Crypto Bro thing. What's the future? Bitcoin is going to be driven by approval of bank custody. That's going to be profound when you can move -- when you can buy, sell and hold Bitcoin in a JPMorgan or a Bank of America. And that will come sometime over the next 4 years. Approval of in-kind creation, digital assets framework, artificial intelligence is going to drive profound increase in equity values in capital, which is going to flow into Bitcoin. It's happening. No one can stop it. The issuance of sovereign debt is going to drive Bitcoin, right? We don't have to worry about the government's not borrowing money, right? It's going to happen. Integration with big tech is going to drive Bitcoin. Awareness and chaos, they're going to drive Bitcoin. So this is coming. There's an open-source model called Bitcoin 24. You can just Google Bitcoin 24, it's uploaded to GitHub. It's a 21-year macro model. It allows you to forecast all of these asset classes and Bitcoin and crank in all your own assumptions. My assumptions? I actually see a base case, which is Bitcoin grows from 0.1% of the assets to 7% of the assets of the world, a 29% ARR, eventually, we're at $13 million per Bitcoin, right? And the model spits out these kind of distributions and these kind of ARRs. This is the world in 21 years. It doesn't look that different than the world today. It's just that Bitcoin now is digital capital. It's still not as big as equity. It just happens to be a global monetary index for people that don't want to take equity risk or real estate risk. Bitcoin Cyber Manhattan -- imagine a city and cyber space, 276 blocks wide, 276 blocks high, 276 blocks deep. You buy a block, that's a Bitcoin. Buy 276 blocks, you got a [indiscernible]. They're not making any more. So it might make sense just to get some in case it catches on. A quote by Satoshi Nakamoto, January 17, 2009, 14 days after the launch of the network. It had no value. You have more information, but the dynamic is stronger, the trend is clear, right? The value proposition is keep your money forever or get rich, right? It's a very clear value proposition to everybody on earth, digital capital. You're a capitalist, there's a digital transformation in the capital markets. So I would invite you to investigate further if this is interesting to you. And thank you for your time today.

Thank you so much. All right. So again, our thanks to Michael Saylor, just a fascinating brilliant presentation. Go on to your meetings. Thank you so much for coming.