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Michael Saylor Says $80K Bitcoin is "Satoshi's Gift to the Faithful" | Markets Outlook
00:16:35
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- [00:00]
A
There are those people that run from the fires and then there's people that put the fire in the automobile or the jet airplane. And we kind of need the people to build the airplanes and build the automobiles if we're going to move the civilization forward. So the volatility comes with the territory.
- [00:24]
B
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- [01:47]
A
I can't speak about that. We released that on a routine basis via 8Ks. But what I can say is on Monday morning of this week, we did buy $830 million worth of Bitcoin. So our last buy was just a few days ago and it was quite.
- [02:03]
B
This is not a typical Q4 for Bitcoin. I mean, how are you watching the markets? Where do we go from here? We know that you are extremely bullish and all in, but what is a day like today? How does that impact you? What are you feeling today?
- [02:18]
A
As I say, volatility is vitality. Bitcoin is a volatile asset. If you're going to hold the asset, you need a four year time horizon. As minimum, a ten year time horizon is really the right time frame. If your time horizon is less than four years, you should hold the credit instruments like digital credit. And if you're an equity investor in a digital equity like my company, you need that same 4 to 10 year time horizon. 4 is the short term, 10 years is the long term. I'm an officer of a publicly traded company. And what are we doing? We are in the business of buying a high energy, highly volatile asset and stripping the risk and the volatility off of it in order to sell it to people that are much more risk adverse, that are much more volatility adverse, that just want that yield. And so if Bitcoin wasn't volatile, it probably wouldn't be high performance and then our value added wouldn't be that great, right? Like for example, I say to people, if you knew Bitcoin was going to go up 2% a month forever with no volatility, neither you nor I would be in business because all the conventional finance investors, all the conventional journalists, they would dominate the market. Warren Buffett would own all of it and there wouldn't be an opportunity for us. So I look at the volatility as its challenge, but it's also the bug, is the feature. And I say to people, you know, volatility is Satoshi's gift to the faithful. He basically gave you the ability to rise to the top of your profession as an analyst, as a journalist, as a corporate operator, as an investor. And if the volatility goes away, no one cares about your opinion on any of this. It's like, you know, you've got fire and we've got the phrase burned fire burns you and electricity shocks you. And Henry Ford created an automobile, you know, with a burning engine, with a fire in the engine. And we created electronic transmissions. And so you put electricity and fire in the car and you've got a killer consumer product. And I think the key here is you got to look at this market and say this is indicative of energy. You can harness the energy, you can't be scared of the energy, right? There are those people that run from the fires and then there's people that put the fire in the automobile or the jet airplane. And we kind of need the people to build the airplanes and build the automobiles if we're going to move the civilization forward. So the volatility comes with the territory.
- [05:05]
B
Of course, you know, I know you've responded on X, but micro well strategy shares are down almost 70%. That's a pretty big fire. I mean, what's your message to shareholders? Is it just hold on and, and things will get better?
- [05:20]
A
My message is if you have a four year time horizon or longer, if you have money you don't need for four years and you don't want to take any counterparty risk to a currency, a country, a company, a culture, a competitor, then you buy Bitcoin. And if you're an equity investor and if you want amplified exposure, if you want to invest in the future of digital capital and the future of digital credit and you're enthusiastic about like we think we can sell a Treasury credit product that's really compelling and very interesting to a billion people, right? A billion people would love to have a bank account that pays 10%. If you would like to invest in that future as an equity investor and you don't need the money for four years or longer, then you can hold the equity. If you need the capital in the next four years, then you probably want to be a more risk adverse investor. You need to look at a credit instrument and if you need exactly down to the penny $87.17 in two weeks, you probably want to put your money in a bank or a money market because that's just what you need. And so I think every investor has to decide what's their risk tolerance, what's their time frame and are you a credit investor, are you a capital investor or are you an equity investor? And then once you've made that decision, you can decide how to allocate your portfolio.
- [07:19]
B
CoinDesk Bitcoin Treasury Month is brought to you by Genius Group, a bitcoin treasury company listed on the New York Stock Exchange under the ticker GNS. Genius is on its way to hodling 10,000 Bitcoin in its treasury while educating the world on a bitcoin first future Genius has launched the Genius Academy with courses from the likes of Saifa Diya Namous, author of the Bitcoin Standard, Natalie Brunel and many more. Start your genius learning journey for free today at GeniusAcademy AI and earn Bitcoin backed gems. Genius Group Genius isn't measured in iq, it's measured in Bitcoin. Looking for the best way to unlock your crypto's liquidity figure is exactly what you need. Being the largest non bank mortgage lender in the US with over $19 billion. Unlocked on their lending platform, explore their industry low crypto backed loans at 8.91%, interest rates at 50% LTV. They differentiate themselves by offering decentralized NPC custody which protects your crypto ownership in a segregated wallet. They've also recently launched liquidation protection, which protects you from liquidation during large price drops. Whether you're funding a major purchase like a down payment on a home, investing in new opportunities, or even buying more Bitcoin figure makes it straightforward and transparent. Visit their app or click our link below to take out a crypto backed loan with figure today. And what's the plan if the common Stock falls below 1x M NAV the company?
- [08:39]
A
If you think about it, we have a dividend obligation and the dividend obligation works out to about $2 million a day. $2 million a day works out to 5 basis points of our trading liquidity. So let's say if the Stock is trading above 1 times M NAV, then you're talking about a 20th of 1%. It's like nothing. But let's go to the situation where the stock falls below 1 times M NAV and we don't want to sell the equity. We can either sell the commodity bitcoin or we can sell derivatives on the commodity or we may even sell derivatives on the equity. But let's put that in perspective. Bitcoin's trading $100 billion a day. $2 million works out to, it's like 2, 100. No, actually it works out to 1/5 of 1 basis point of all the trading of Bitcoin each day. It's like it's not 1% of 1%, it's 1/5 of 1%. It's so small that it would pop up in the fifth significant digit, you know, as a rounding error. So the company's dividend obligations are fairly de minimis. You can literally calculate them on our website. I think it's a. If Bitcoin goes up 140 basis points a year, we can pay the dividends forever and generate shareholder value. Right? It's that small. And if bitcoin goes up 0% a year, we have capital for the next 70 years. And in 70 years we'll have to figure out to do something different and we'll figure out what we're going to do to deal with it. But the company's financially very, very strong. And we have a huge number of financial options at our disposal because we are an operating company and any of them could be used if we needed to.
- [10:39]
B
And lastly, I just want to ask you about the J.P. morgan report that came out this morning, warning that strategy could be excluded from benchmarks like NASDAQ, MSCI, and it could trigger an estimated $2.8 billion in automatic outflows. That's just from the MSCI alone. What's your response to that?
- [10:57]
A
I think it's a bit alarmist. I'm not so sure the numbers are nearly that high. I think actually the numbers would be much smaller. I also think it's already priced into the market by a factor of 10 if you count it. I don't think there's any relationship between the decision making of MSCI and the NASDAQ 100 or the S&P 500 index allocators. The company is an operating company. It's just like insurance companies use capital in order to create financial products and banks use capital create financial products. We use capital to create digital credit finance products. It's possible there are people in the world that don't fully appreciate digital credit or digital Treasuries. That wouldn't surprise me. We had that challenge with bankers. They didn't want to bank Bitcoin. We had that challenge with accountants that were a little bit skeptical of digital assets accounting. The accountants embraced the asset, the bankers embraced the asset, the politicians embraced the asset. We had the challenge with credit rating agencies and they just embraced the asset. We're starting to get credit ratings. We have the challenge under the Basel Accords where Basel Accords allocate zero value to Bitcoin. And now they've announced they're going to reconsider that. So I'm not concerned that we have these kind of concerns. I think we'll educate all of the companies in the space. Ultimately, it's above my pay grade to decide whether MSCI embraces digital asset holders or digital credit or not. It's just like it's above my pay grade whether the s and P500 puts us in the index. But what I would say is over the long run, it doesn't matter because over the long run this will create near term volatility. But if the world wants a bank account that pays them 10% rock dividends, and if Bitcoin is digital capital superior to gold, then it's not going to matter what an equity index allocator decides. If the insurance companies don't want to buy Bitcoin and the banks don't want to buy Bitcoin, or the index allocator doesn't want to support a digital treasury company, the free market is going to allocate capital and it will adjust. It just creates a bigger opportunity for some other equity investor that will pile into this particular asset class and support these kind of companies. So it is what it is. It'll work itself out. I think whenever there's a lot of volatility in the market. And right now, clearly we've had a lot of volatility of late. We're living through about a 35% drawdown. You know, I remember what it was like when we had this, the crypto winner and there was a 75% drawdown. When you have a massive drawdown, everyone looks for a reason why and they will grasp it. Is this the reason why everybody wants a reason for, for to explain their pain or the storm or the volatility? Is it the crypto exchange, you know, liquidation bots, or is it this or is it that? At the end of the day, if you look at the chart of bitcoin for the past 15 years, there's 15 major drawdowns. It always comes back to an all time high. There's five brutal pullbacks in the past five years. This is not the most brutal. All of those things have happened without the support of the politicians, without the support of the banking industry, without the ETFs, without the IBIT derivatives market, without the support of MSCI, without the support of the S and P index. I could go on and on and on. The reason that digital assets are spreading around the world is because there's a billion people. They want to hold the money in their hand, they want to move the money at the speed of light, they don't want to be dependent on 20th century financial structures, they don't trust gatekeepers. And they would like to move forward with their lives with some control, with financial freedom and sovereignty and property rights. And those fundamentals are stronger than ever. We just had the Secretary of the Treasury, Scott Bessant show up at the launch of Pub Key in Washington D.C. last night. Right? And so in the midst of all the, you know, the crypto chaos and people worrying about, well, will these guys say that and will this happen? You have the most powerful financial regulator in the world implicitly showing his support for the crypto economy, for digital gold, for Bitcoin, and explicitly giving guidance to banks that it's okay to custody crypto assets, it's okay to actually handle them as part of staking and fee allocations, and it's okay to extend credit. And that is the most profound thing that's happened in 17 years in this industry. And if we keep our eyes on that, then the near term volatility is just going to be noise. We have to work our way through it cheerfully, constructively. It'll eventually pass. People will look back and smile and say you remember the day when that news story came out.
- [16:23]
B
Michael, thank you so much for your time. Thanks for joining me. And I'm sure we'll see you again soon.
- [16:29]
A
Yeah, looking forward to it. Thank you.