Compiled by | Aki Wu Blockchain Blockchain
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In an interview on Natalie Brunell's podcast, Michael Saylor, Executive Chairman of Strategy, stated that Bitcoin's recent flat price movement is a sign of strength, not weakness. The market is currently in a consolidation phase, with early holders gradually cashing out, while institutions are waiting for volatility to decrease before entering the market. The interview focused on "reconstructing the credit market with Bitcoin." He believes that the traditional credit market is "yield-hungry and lacks liquidity," while Bitcoin collateral can create stable cash flow without selling physical assets, and can integrate Bitcoin into mainstream funding channels for credit and stock indices. The company primarily uses equity financing, supplemented by derivatives such as futures/options, to pay dividends, and seeks ratings and inclusion in mainstream indices.
Disclaimer: This article is a transcript of a video published on September 19th, and some information may be outdated. The content does not constitute any investment advice and does not represent the views or positions of Wu Blockchain.
source:
https://www.youtube.com/watch?v=CbODA93ByS0&t=195s
Why is market sentiment towards Bitcoin weakening now?
Michael Saylor: I believe that both macroeconomic conditions and community sentiment naturally ebb and flow. Bitcoin experiences periods of rapid rise and euphoria, when emotions are extremely ignited, adrenaline surges, followed by celebration and linear extrapolation (as if "landing on the moon"). Then the price retraces and consolidates, with many expecting a rapid rebound, but instead it trades sideways for a while.
There's a natural tendency to feel frustrated. But I don't think there's anything to be discouraged about. The fact is, if you zoom out and look at a one-year period, Bitcoin has risen by about 99%, almost doubling. If someone says they've heavily invested in an asset that has seen a near 100% annual return—should they be happy? Of course they should. It's just that the path to that return is often more volatile.
As for the recent sideways movement, I believe it's largely because Bitcoin, with its approximately $2.3 trillion market capitalization, is in a "bankless" state. Many holders cannot use BTC as collateral to obtain loans. When you hold a lot of Bitcoin but lack fiat currency and can't borrow money, the only thing you can often do is sell your coins. Bitcoin is currently somewhat like a "Magnificent 7" level startup, where employees are extremely wealthy on paper due to stock options, but cannot use them as collateral for loans, so they have to sell. Outsiders might ask: are employees selling stock because they lack confidence in the company? The answer is no—they simply need to send their children to college, buy houses, and support their parents.
Therefore, the current selling pressure mainly comes from veteran crypto OGs who are diversifying their positions by around 5% or similar methods. The market is digesting this selling pressure, strengthening support, and volatility is converging—which is actually a good sign. For an asset to mature, it needs more long-term capital (large enterprises and institutions) to enter; early OGs who bought in at a cost of $10 or even $1 are moderately cashing out to feel more secure; and only after volatility decreases will super-large institutions enter the market on a large scale. The paradox is that when super-large institutions enter and volatility decreases, the market will seem "boring" for a while, the adrenaline will subside, and people's sentiment will turn bearish. But this is just a normal growth stage in the asset monetization process.
Can Bitcoin, which has "no cash flow," become a high-quality asset?
Natalie Brunell: I recently attended some events with TradeFi practitioners, and their reasons for not allocating to Bitcoin were almost identical: lack of cash flow; and some financial institution employees were prohibited from directly purchasing Bitcoin due to compliance issues. What are your thoughts on these concerns? From TradeFi's perspective, what progress have we made? What changes are needed to get more people to embrace Bitcoin?
Michael Saylor: I believe that many of the most important “property assets” in Western civilization — such as diamonds, gold, Old Master paintings, and land — do not generate cash flow in themselves.
The same applies to many truly important things in our lives: marriage and children don't generate cash flow; real estate doesn't generate cash flow; the Nobel Prize doesn't generate cash flow; yachts and private jets also don't generate cash flow. Many things in the world that are generally considered "valuable" are not judged by cash flow standards. Moreover, regarding money, the "perfect money" shouldn't have cash flow—the definition of money lies in high liquidity and strong salability. If you want something to act as money, it shouldn't have too much "use value": for example, gold is more suitable as money than silver precisely because it has fewer industrial uses; once materials with high use value like copper and silicon are introduced, they become unsuitable as money.
Some might argue, " Without cash flow, it's not a good investment asset ." This viewpoint has largely been formed over the past two generations. Since 1971, the mainstream global asset allocation concept has evolved into: long-term capital = a 60/40 debt-equity portfolio—bonds provide coupon payments, while equities provide dividends or profits, and the world understands assets accordingly. Ultimately, the S&P 500 became the dominant benchmark.
If we look at index investing, approximately 85% of index funds are allocated to the S&P 500. Many people, when they talk about "long-term capital," think of using stock indices (like the S&P 500 Index) to preserve and grow their wealth. Vanguard commercialized this concept, launching and popularizing the Vanguard 500 and the concept of index funds. When the idea of "a fund composed of 500 constituent stocks" achieves extreme success, and the entire institutional system of S&P, Vanguard, and the mutual fund industry is built on this mindset, they are unlikely to immediately embrace a superior, disruptive new concept; instead, they are more likely to be path-dependent. This is a practical issue.
In an era where prices are denominated in US dollars, the US economy is booming, the dollar is the world's reserve currency, and there has been no global world war since the end of World War II (1945), you find yourself in a specific context at a specific point in time. In the language of differential equations, this is a particular solution obtained under given boundary conditions: if all boundary conditions are fixed, then substituting these numbers will yield the corresponding answer; the solution holds true as long as these assumptions/boundary conditions remain unchanged.
However, once the material changes from aluminum to steel (a metaphor for a change in external conditions), the original formula no longer applies. At this point, you can no longer use particular solutions, but must return to the "homogeneous solution." Instead of formulaically looking up tables and applying formulas, you must derive from first principles like a physicist would. In reality, most people never truly derive anything from first principles in their lifetime—they all use "partial solutions" provided by others.
This "Trojan solution" fails when the entire monetary system collapses. For example, in Lebanon, if your bank account is frozen and your currency becomes worthless; in some African countries; or in Argentina experiencing a currency collapse—even if you hold assets with cash flow, they will be virtually worthless in their local currency. Ironically, assets traditionally considered "safe and generating cash flow" are not safe when denominated in the Nigerian Naira, Venezuelan Bolivar, Argentine Peso, Lebanese Pound, Iraqi Dinar, or Afghan Ni. The same applies to Russia before the ruble's dramatic devaluation in the mid-to-late 1990s.
Those who cling to old ideas possess a "special solution" that only works within highly stable, closed systems. Such systems have neither undergone stress testing under external pressure nor truly faced the challenge of new ideas. Those who can truly understand Bitcoin often come from extremely chaotic environments where their own currencies have collapsed, forcing them to think independently; or they are essentially first-principles thinkers—questioning everything like scientists and re-deriving the underlying principles.
The most ironic thing is that Vanguard's CEO said Bitcoin is not an investment because it has no cash flow; yet, my company's largest shareholder is Vanguard. As Musk said, "The most ironic outcomes are often the most likely to happen."
What pain points do you see in the traditional fixed income sector, and how can Bitcoin be used to solve them?
Michael Saylor: When you talk about the credit market, you'll find three characteristics. First, there are mortgage-backed securities (MBS) with a collateral ratio of about 1.5 and yields of roughly 2%–4%. Then there's fiat currency credit—backed by the government's promise to "continue printing money," which sets the so-called "risk-free rate." For example, Japan is about +50 basis points, Switzerland about -50 basis points, Europe about +200 basis points per year, and the US about +400 basis points per year, and it was recently lowered by 25 basis points.
Furthermore, there's corporate credit, backed by a company's cash flow—whether it's a high-quality company like the "Magnificent Seven" (such as Microsoft and Apple), a high-yield bond (junk bond), or a struggling company. Their credit spreads generally range from 50 to 500 basis points. For example, you might buy a corporate bond in Europe with an annual interest rate of 2.5%. However, the actual monetary inflation rate is often much higher.
Therefore, Japan, Switzerland, Europe, and the United States are all in a state of financial repression to varying degrees: the nominal yield of so-called "risk-free" fiat currency assets is lower than the rate of monetary expansion and also lower than the rate of appreciation of scarce and popular assets. This is the first challenge. The second challenge is that these instruments have poor liquidity (somewhat similar to old-fashioned preferred stock), are difficult to trade, and sometimes do not trade for extended periods, and are insufficiently collateralized. The credit market we observe is weak and unhealthy. For example, if you are in Switzerland and put your money in a bank and only receive 0% or even have it deducted by 50 basis points, this situation is hard not to call a "yield famine." Many markets are eager to generate returns.
Michael Saylor: On the other hand, in the venue where I gave a speech a few days ago, there were about 500 people. I asked, "Please raise your hand if you have a bank account." Almost everyone did. But if I asked, "How many of you have annual returns on your current account or savings account exceeding 4.5%?" almost none. Then I asked, "If a bank account could offer an annual interest rate of 8-10%, would you be willing to accept it?" Everyone in the audience said yes, but who is offering such long-term interest rates? Nobody.
The opportunity we see in the market is this: unless you hold Bitcoin, own an asset that can store value for a long time (what I call digital capital), and are willing to hold it for 30–40 years, no one will give you a fair, long-term return. Tell me: who will give you 10% interest for the rest of your life? Your bank won't, companies won't, governments won't, and MBS issuers won't.
Why is a long-term interest rate of 10% difficult to achieve in the traditional system?
Michael Saylor: The reason is that no company can be confident of consistently generating returns higher than 10% annually over the long term; and mortgage borrowers can't afford that cost. Furthermore, stable governments are unwilling to do so; they want to pay you far less. Weak governments are forced to offer higher interest rates, but their monetary and political systems are often on the verge of collapse, so you can't find a reliable national borrower who can pay those rates long-term. You also can hardly find companies willing to do this—most companies' corporate finance strategy isn't "issue more debt and manage it well," but rather "borrow less and buy back stock."
We have discovered that Bitcoin is digital capital. Bitcoin's growth has consistently outpaced that of the S&P 500. Once you acknowledge that Bitcoin's long-term appreciation will outpace the S&P 500, and my assumption for the next 21 years is a compound annual growth rate of approximately 29%, then you can use this type of appreciating asset as collateral to create credit.
Bitcoin is digital capital that appreciates faster than the cost of capital; the cost of capital here can be approximated by the long-term returns of the S&P 500. Credit issued against it is digital credit. This digital credit can have longer or shorter durations, can have higher yields, and can be denominated in any fiat currency because Bitcoin is stronger (scarceer and less prone to inflation).
A key point in the credit market is that the currency in which debt is denominated should be weaker than the currency of the collateral you hold. If you denominate your debt in a stronger currency but hold collateral with a weaker currency, you will experience a yield curve inversion and eventually go bankrupt. This is common in some countries, where residents borrow in US dollars but repay with their local currency income, only to see their local currency collapse, ultimately leading to bankruptcy.
Therefore, we can choose to issue debt in relatively weaker denominated currencies such as the Japanese yen, Swiss franc, euro, and US dollar. In this way, we can bear the risk of these currencies while providing higher yields (similar to the coupon rates of distressed bonds), but cover the risk with a collateralization ratio far higher than that of US investment-grade companies—not 2–3 times, but 5 times, or even 10 times the overcollateralization.
Therefore, we can create credit instruments with lower risk, longer duration, and higher returns, and then publicly issue (list) them with a quasi-perpetual structure to obtain better liquidity. In short, the goal is to provide a smarter, faster, and stronger credit product that offers better long-term liquidity, lower risk, and higher returns.
For any Bitcoin treasury-type company, the opportunity lies in this: you possess the world's highest quality collateral—Bitcoin, which is digital capital. If you issue digital credit based on this, you can create the world's highest quality credit instrument. The volatility and returns derived from this credit side will be transferred and amplified onto the equity of common shareholders. Thus, you gain " amplified Bitcoin" exposure on the equity side, while on the debt side, you "tame" Bitcoin into a low-risk, low-volatility, and yield-generating asset.
What was previously criticized as "lacking cash flow" is now being given cash flow. Ironically, many investors who prefer traditional credit—those who only want to buy cash flow—will buy bonds, or even the stock of a loss-making company, even if its operating cash flow can't cover its interest payments, but they still emphasize "at least there's cash flow." What we're doing now is enabling Bitcoin to generate cash flow, turning it into a credit asset so it can be included in bond indices; simultaneously, creating equity exposure that can outperform, allowing it to be included in stock indices. Both paths can continuously raise funds; they are both entry points for capital. Capital flows into the Bitcoin ecosystem through these entry points, and we then purchase Bitcoin, thereby providing funding and momentum for the Bitcoin network.
What are perpetual preferred shares? What customizable terms do they offer compared to bonds and convertible bonds?
Natalie Brunell: You pointed out the serious mispricing in capital markets: traditional collateral is often overvalued, while Bitcoin is undervalued. You saw an opportunity in this and launched a series of credit instruments—STRIKE, STRIDE, and now STRETCH. Let's elaborate: many people don't understand what preferred stock is. Although it's called "stock/share," in practice it's more like a credit instrument, even similar to a bond, and it provides returns. Could you explain the nature of preferred stock? Also, you're issuing perpetual preferred stock; what makes this structure unique in the market?
Michael Saylor: Preferred stock is a second class of shares distinct from common stock. Common stock represents ultimate ownership of a company but typically does not offer any special preference or guarantees. Preferred stock, on the other hand, can stipulate dividends: for example, fixed monthly or quarterly payments, or fluctuations based on the SOFR (Secure Overnight Financing Rate), which can also be fixed or monthly. You can include cash flow and profit rights in preferred stock.
Preferred stock can also include conversion clauses: for example, it can be converted into common stock at a rate of 1/10 or 1/5, or it can be fully convertible. You can set certain rights upside, certain returns, liquidation priority, or even make it a higher priority stock and add guarantee clauses, such as cumulative preferred dividends—which accumulate if we miss a distribution; or stipulate default penalties—interest is charged for missed distributions. In short, preferred stock is a versatile "container" into which you can include almost any type of clause you need.
Natalie Brunell: And it's not debt, right? Unlike convertible bonds, you don't have to repay the principal when it matures. You raise funds through preferred stock, but you don't have to repay the principal.
Michael Saylor: Yes, it's generally different from debt instruments, which require principal repayment at a certain point in time. Of course, you can also make preferred stock "look more like debt": for example, by giving holders a put option, requiring the company to repurchase it in cash; or by giving it a redemption option, making it look more like debt.
Conversely, you can also make it more like equity: for example, non-cumulative preferred stock—the principal never matures, and even if distributions are suspended, no accrued interest or debt is generated (STRIDE is non-cumulative). Therefore, preferred stock can be adjusted across the entire spectrum from very debt-like to very equity-like, which is a very flexible security form for a listed company.
Michael Saylor: If you're a publicly traded company and hold a significant amount of Bitcoin, you can design such a security yourself and then publicly offer it. The first step of innovation is "making" this tool; the second is listing it—for example, using a four-letter code (like STRC) for an IPO. The third step is: once publicly listed, you can also submit a shelf registration for it. This means that initially you might sell $1 billion at once, and then you can almost continuously increase the offering size, for example, selling another $50 million every week; it's very similar to how ETF shares increase with inflows—like IBIT growing, almost "daily subscriptions, daily expansion."
Therefore, when you create a publicly traded, off-the-shelf registered preferred stock, you've essentially created a "quasi-proprietary ETF." It combines the advantages of an ETF with the benefits of a proprietary asset—because you're creating this credit instrument in real time; rather than like a "junk bond ETF," which collects funds from investors first and then buys a bunch of other people's junk bonds on the market. ETF providers merely add a "shell" to someone else's assets; but when you turn a "digital credit instrument" into preferred stock, you're actually creating a native instrument, with its chain vertically connected to the underlying asset, Bitcoin.
Natalie Brunell: Over-collateralization.
Michael Saylor: That's right. With this structure, you can design a preferred stock with 10x over-collateralization, a 10% annual dividend yield, and perpetual dividend payments. Once the terms are set, I can issue a certain size of product based on these conditions.
What problems do Strike, Strife, Stride, and Stretch each solve?
Michael Saylor: So far, we've designed four types of instruments. The first is called Strike. Its idea is to pay dividends at 8% of par value, with a par value of $100, and continuously pay 8% dividends; at the same time, it gives holders a conversion ratio—they can convert 1/10 of their shares into MSTR common stock. Thus, if MicroStrategy's stock price is around $350, this instrument effectively embeds approximately $35 of equity value. In other words, it offers both upside potential and downside protection through liquidation preference, while providing a continuous cash flow through dividends. The design philosophy of this type of instrument is to capture upside potential with minimal downside risk, while simultaneously generating returns during the waiting period.
The second type is Strife (STRF), which offers a 10% dividend yield at par. Simply put, you can think of it as a "long-term (even perpetual) high-yield note" with a face value of $100 and a 10% dividend payout. We also place it at the top tier of the capital structure and stipulate in the covenant that no preferred stock with a higher priority than the STRF will be issued; therefore, the STRF will always be the highest-ranking long-term credit instrument. This is important for "risk-averse" credit investors—because it means their principal is more strongly protected.
This is a positive factor from a "credit" perspective, and it also enhances our credit rating in the eyes of investors. After our issuance, it traded at a price higher than its face value, with a significant increase. The pricing logic is as follows: as the company's credit improves, market acceptance of Bitcoin increases, and the price of Bitcoin rises, the price may return from 85 (at a discount) to 100 (face value), then to 110, 120, 150, or even 200. Because this is a permanent instrument, it is entirely possible that it will remain at a premium for a long time, thus anchoring the company's cost of capital. In other words, if you were to ask, "How should the market price the long-term (equivalent to 30 years) debt interest rate of a company with Bitcoin as its core asset and investment-grade credit?", the current market price essentially provides the answer.
The third type is Stride (STRD). Its design is based on Strife (STRF), but removes two provisions related to the "penalty clause" and "cumulative dividend clause," while maintaining the same overall structure. Thus, it still offers a "10% dividend/yield at par value," but its nature changes from senior long-term credit to subordinated long-term credit. The former is more like debt, with a higher tranche in the capital structure and lower risk; the latter is closer to equity, with a lower tranche and higher risk, ranking only above common stock. After issuance, STRD traded with an effective yield of 12.7%; in comparison, STRF's effective yield was approximately 9%. This creates a credit spread of 370 basis points between the two most "safe" and most "risky" instruments.
Some might ask—and somewhat counterintuitively—why was Stride (STRD) twice the size of Strife (STRF) and more successful, despite having no accrued dividend rights, no penalties, and being a subordinated tranche? The answer is simple: they believed in Bitcoin and trusted the company. At the same time, they wanted returns. If you were putting your money in an account, would you prefer 12.7% or 9% annualized return? The question becomes: do you trust the "bank" that holds your money? Once you trust them, and they offer you 12% instead of 9%, you'll naturally choose the former.
So who will trust the company? The shareholders themselves. Just like who will trust Bitcoin? Bitcoin holders. Ultimately, it comes down to what you choose to trust. These kinds of tools offer two core benefits:
1. First , it gives those who believe in the company and Bitcoin the opportunity to earn a 12.7% return, which is very attractive to them;
2. Second, it allows companies to continue building collateralized assets under senior instruments, which is credit positive: good for Strife, good for Strike, and good for everything else. At the same time, it provides companies with a way to scale up leveraged purchases of Bitcoin, which itself has no counterparty credit risk.
In theory, if the market can absorb $100 billion of Stride, we will issue $100 billion of Stride, increasing the company's leverage to 90%, and then use that leverage to buy Bitcoin. This benefits Bitcoin and common stock; the rise in common stock will in turn benefit Strike's "equity embedded portion." Simultaneously, because we buy a large amount of Bitcoin, it means that Strife's collateral will reach 50 times overcollateralization. Therefore, this is beneficial to credit, convertible bonds, stocks, Bitcoin, and Stride holders—creating a flywheel effect. This is why we launched Stride.
The last option is Stretch. Its premise is this: Many people say, "I want fixed income, like raising a bank interest rate from 5% to 10%, but I don't want volatility." They don't want the market price of their principal to fluctuate by $10. If they buy at $110 and then the price drops to $105 due to interest rate changes, they'd lose a year's worth of interest. Therefore, they wanted to find a solution that anchored the price around $100, minimized volatility, and still allowed them to withdraw their returns.
Therefore, the core idea behind Stretch is: we eliminate duration risk. Products like Stretch have a very long duration, equivalent to a 120-month interest rate duration, which causes the principal price to fluctuate significantly around its face value. In fact, for every 1% change in interest rates, the principal price could change by 20% if the underlying asset has a 20-year duration. Therefore, we need to completely eliminate duration—not 120 months, but just 1 month. When you eliminate duration, you also eliminate volatility; after all, the volatility of a 30-year bond is far greater than that of a 1-month asset.
We aim to reduce volatility by stripping away duration. To do this, the product structure had to be changed to monthly instead of quarterly, so we changed the dividend to a monthly cash payment and introduced a floating monthly dividend yield. This is the first time in modern capital markets that a company has issued preferred stock with a "monthly floating dividend." We call it Treasury Preferred. This is something we invented using AI—I designed it with AI. No one had thought of doing this before because there wasn't an underlying asset that could support such a design. However, Stretch isn't a "zero-volatility, high-interest current account," nor can it guarantee that if you deposit $1082.32 today, you can withdraw the exact same amount tomorrow. It's not quite there yet. But it's very close: you can put in funds you need to hold for a year and receive a 10% dividend with extremely low volatility; if you need to withdraw your funds, you can sell them on the secondary market to redeem your principal.
This is more like a money market instrument backed by Bitcoin. Of course, it doesn't have the low volatility of a real money market fund, but its goal is to compete for the short end of the yield curve, backed by Bitcoin.
If you promise not to sell Bitcoin, then where will the Bitcoin-backed dividend funds come from?
Michael Saylor: We currently have about $6 billion in preferred stock. We pay about $600 million in dividends each year. The company's enterprise value is approximately $120 billion, and we sell about $20 billion in common stock each year. So you can think of it this way: we basically sell the first $600 million of that common stock to pay dividends; and the rest of the $20 billion, we use to buy more Bitcoin.
In other words, we raise capital in the equity capital market at an extremely rapid pace. Only about 5% of the equity proceeds are set aside for dividend payments; the rest is used to increase our Bitcoin holdings. In the event that we are unable to sell shares for any reason, our substantial Bitcoin holdings allow us to issue credit instruments or sell derivatives to address the situation.
For example, we can sell Bitcoin derivatives—we can hedge by selling Bitcoin futures or selling out-of-the-money call options. Another method is called "basis trading," where you use your existing Bitcoin holdings as collateral to sell futures to hedge your position and earn basis profits. Therefore, the primary way companies pay dividends is by continuously selling common stock ; a secondary method includes selling Bitcoin derivatives. Furthermore, the credit market is open to us, and we can access different credit markets for financing from time to time.
Natalie Brunell: Is the goal to get these instruments credit ratings from major rating agencies? What does that mean?
Michael Saylor: Yes. Our current goal is to make the company the first Bitcoin asset repository to receive an investment-grade rating, and more broadly, the first investment-grade crypto company; at the same time, to get all the instruments we issue rated by rating agencies. This will require a lot of meetings and communication, but I am very confident that we will eventually achieve it.
Why has it still not been included in the S&P 500?
Michael Saylor: The S&P 500 has a set of inclusion criteria, and we only met those criteria this quarter. We haven't met them for the past five years. You have to be profitable and meet a series of conditions. I think we won't be eligible until we adopt fair value accounting. The second quarter of 2025 will be our first eligible quarter. We don't expect to be included in the S&P 500 the first time we qualify. Tesla wasn't included the first time it qualified either.
We're a disruptive new company, and a disruptive new asset class. For a traditional committee that's risk-averse and makes decisions about the flow of billions, hundreds of billions, or even trillions of dollars, waiting a few more quarters is perfectly reasonable. They'll likely say, "Let's see how the second quarter goes. If this business continues to show sustainability two to five quarters later..."
Honestly, if someone adopts a new idea after four quarters of performance, that's already considered quite innovative and progressive. Often, people wait three to five years to acknowledge something. So I don't expect to be included in the first quarter. I think we'll be included after several quarters, once we've established a track record that can be validated by the industry. In fact, S&P has already included Coinbase and Robinhood in its constituent stocks. I don't think they're against the crypto asset class, or against Bitcoin and digital assets. It's just that exchanges have existed for over a century; their history is longer and they're easier to understand.
The so-called "Bitcoin Treasury companies" are a revolutionary new species that is about to explode. I define the starting point for the entire Treasury company industry as November 5, 2024. Now, we have roughly gone through three quarters, and it is very clear that this is a legal, compliant, and independent new type of company. This is also reflected in the market; in 12 months, the number of companies in the industry has grown from 60 to 185, and the industry is in a high-speed growth mode.
Natalie Brunell: We have indeed grown to nearly 200, but as you've seen, the premium to net asset value (NAV) is converging, and there's been some consolidation. Could you talk about the market reaction crypto the Bitcoin treasury? Do they see Bitcoin treasury companies as the "institutional" allocation of the future? How do they value these companies? Do you still see slow adoption? Will there be any catalysts to change that?
Michael Saylor: I think the market is still in a learning phase. I just spoke with 25 investors, and I asked them: How familiar are you with this? For example, “Tell us about Bitcoin; will Bitcoin be banned?” — We really have to start from the beginning: Bitcoin wasn’t completely banned in 2023. Then we have to go through the entire crypto industry, explain various credit instruments, and explain equity. Overall, most market participants are still catching up.
To illustrate: imagine it's 1870, when people are just beginning to refine crude oil, and a wave of new companies are emerging around the question, "What can oil do?" Then, ideas for acrylic or polycarbonate (Lexan) come up, followed by various petrochemical materials and products such as polyester, spandex, and nylon. Some talk about kerosene, others advocate for diesel or gasoline, and still others discuss asphalt. All the investors sit together asking: Is this really a good idea? How big will this industry be? They're still pondering, "How large can the kerosene business be in 180 countries?" Incidentally, kerosene's first use was in lighting—first for illumination, then as engine fuel, then for heating, then as aviation kerosene, and now even rocket fuel.
Therefore, I believe this industry is still in its extremely early stages. Companies are still learning how to articulate what they do and are determining their business models; investors are trying to understand these models and the industry; and regulators are dynamically evolving the rules—everything is happening in real time. This is a “digital gold rush.” In the decade from 2025 to 2035, a multitude of different business models, products, and companies will emerge, making a lot of money and making many mistakes, while also creating a great deal of wealth—this is the noise and chaos of the market.
Amidst the backdrop of public opinion and social division, what kind of "peaceful" coordination mechanism can Bitcoin provide?
Natalie Brunell: The past week has been heavy for many people. This country seems more divided than ever, with people attacking and tearing each other apart online. Do you have anything to say? Because you clearly find a lot of hope in Bitcoin, and you always emphasize how it empowers individuals. Nothing benefits both the rich and the poor like Bitcoin does. I think we need a message of hope right now, especially in the aftermath of Charlie Kirk's assassination.
Michael Saylor: The message I want to convey is that we have far more consensus among ourselves than the mainstream media makes you believe. Take the Bitcoin community, for example; there are often two opposing factions within it. When I'm online, the discussions can be very heated, highly colored, and emotionally charged; people get caught up in their emotions and lash out at me; one group of developers can be furious with the other. Ironically, we actually agree on 99.9% of the issues.
Digging deeper, you'll find that inflammatory content spreads more easily; rumors travel faster than the truth; and extreme stances spread more aggressively in cyberspace, on social media, and in the wider ecosystem. I've even noticed that during periods of peak company success, the amount of hate speech and toxic information posted online is often the highest. I'll follow the trail and examine the accounts that post negative, hateful, and accusatory content.
What I often see is: it's not a real person at all—never interacting with anyone, only three hundred or so followers, and no shared interests with me. One more look, and you realize: it's a bot account. Many toxic and inflammatory online behaviors are actually forms of online guerrilla marketing: for example, someone short my company's stock might hire a digital marketing company to mass-produce bots that post malicious, sarcastic, and cynical content, creating the illusion of protest. The same applies to the political sphere: much "emotional mobilization" is actually paid online manipulators; people pay others to take to the streets and post online. Then mainstream media focus their cameras on these paid protesters or fake bots, telling the cameras "public sentiment is surging online" or "people are outraged in a certain place," pushing this to millions of people, creating the appearance of social disorder and boiling public resentment. Unfortunately, when you keep amplifying fake protests, a very small minority will be incited to violence, and the false becomes reality, leading to tragedy.
I want to say that perhaps this is the warning that tragedy—the " Kirk incident "—brings us: there are indeed some dysfunctional mechanisms in society that specialize in "creating division," thriving by amplifying division. If we simply operate on these "megaphones of division" and turn them off, people can actually come together again—by turning off the toxic megaphones.
Another point is to learn to discern: if you read 37 negative comments, you might think everyone hates you. Online, I often feel like everyone hates everything I do; but in the real world, I've never met a single person who openly expresses dissatisfaction. You might ask: why do people offline seem happy, while online people seem so unhappy? The reason lies in camera angles. There's a saying: "Only those who bleed make the headlines."
Natalie Brunell: Yes, I know the news industry all too well.
Michael Saylor: So the camera is always looking for "social unrest." But my view is that much of this unrest is "bought." Some people create unrest in cyberspace, and they create unrest in real life; then unhealthy media amplify and spread it. The public is actually experiencing aesthetic fatigue and becoming increasingly vigilant—this growing distrust of these systems is the activation of society's immune mechanism. Overall, this will catalyze more positive behavior and constructive public participation. I am confident and optimistic that, over time, we will move towards a healthier world and a healthier political community. But the prerequisite is: don't blindly believe everything you're told, don't believe everything you read, and learn to think independently.
At the same time, if you find a bunch of bot accounts amplifying toxicity on your timeline, don't interact with them. Just like when you see 52 people hired to protest on a street corner, don't argue with them—they're paid "mercenaries," and you can't convince them; they're paid to hold that view. We've seen similar scenarios in the crypto industry: when Greenpeace and the Sierra Club claimed "Bitcoin isn't environmentally friendly," you couldn't convince them either—this wasn't genuine discussion or feedback, but paid protest. I hope society will examine the consequences of paid protests and then take a step back and think things through.
Natalie Brunell: Ultimately, Bitcoin is more like a peaceful revolution: it may defund power structures that profit from the "attention business" and shift value towards a more peaceful, more beneficial system for the masses. That's basically what I got from your idea that "Bitcoin brings hope."
Michael Saylor: This is what we've always said: Bitcoin is a peaceful, fair way for us to resolve our differences. As more people adopt it, peace will spread, fairness will spread, truth will spread, and toxicity will subside.
