Bitcoin 2025 Q&A Michael Saylor: Why Bitcoin

Source: Bitcoin 2025 Conference "Q&A Michael Saylor" session; Translated by: AIMan@Golden Finance

Moderator: You mentioned that just holding Bitcoin is enough, but have you ever thought about building something like a Bitcoin bank? Or is this contrary to your philosophy?

Michael Saylor: "Bank" is a regulated or reserved term in Western civilization. So now it refers to a company that accepts commercial or retail deposits and is regulated. If you are a regulated bank, you may actually be prohibited from engaging in other financial activities. So we don't have any plans to become a bank. We are more keen on pioneering the field of Bitcoin-backed credit instruments. We want to have top-notch Bitcoin-backed equity and Bitcoin-backed credit.So, this is a set of financial products, but not a bank.

Moderator:A lot of people believe in diversified investment, but you are all in on Bitcoin. What gives you such strong conviction about this choice?

Michael Saylor: Bitcoin is the only digital commodity. If you want to be a public company, then you need to be capitalized on a commodity. And Bitcoin is the first commodity in the history of the world that has consistently outperformed the S&P Index.

So, if you are a public company, the choice is very simple - there is only one best asset, there is no second best asset.

I mean, my conviction about investing in Bitcoin is like an aerospace engineer's conviction about using aluminum to build airplanes. The reason you use aluminum to build airplanes is because if you use steel, the airplane won't fly. So Bitcoin works for public companies because it outperforms the S&P, it's more volatile than the S&P, and it's a commodity. So you can go 100% leveraged, and every mathematical model you can think of says that the correct answer is to hold 100% in Bitcoin. If you diversify, all you do is dampen, dilute volatility, which reduces the value of options. When you go from 100 volatility to 40 volatility, your options market value might go from 100 billion to 1 billion. So you're destroying your options market. And if you dilute Bitcoin with anything else, you're destroying its performance.

So the first answer is that it makes no sense because options are destroyed, equity is destroyed. The second answer is that you can't build a Bitcoin-backed convertible bond, a Bitcoin-backed convertible preferred stock, or a Bitcoin-backed fixed income preferred stock if you're not backed by Bitcoin.

For example, if Berkshire Hathaway bought $100 billion worth of Bitcoin tomorrow, they might own more Bitcoin than we do, but they can't issue equity and credit instruments with the performance of Bitcoin because they are diversified. So, at the end of the day, it makes sense for us to own 100% of Bitcoin because it gives you the first best result, and then all the securities we construct inherit the volatility and performance of Bitcoin. If we diversify, we are essentially destroying and weakening our own securities and our own performance.

Host: You just said, "There is no second best choice." This is a meme you created. How do you think about the importance of marketing, memes, and mimetics in your boardroom? How important is it to what you are doing?

Michael Saylor: I think we live in a world of information overload, too much information and entertainment content. You can sit down and watch a video of Magnus Carlsen playing chess, or even watch countless commentators commenting on the same game of Magnus Carlsen if you want to dig deeper. Everything is infinite: infinite entertainment, infinite information, infinite news, and everyone is inundated and bombarded with information. So, if you have a message to convey, it's important to condense it into something very efficient. People don't have time to read 30 pages, they don't have time to read two pages, and they probably don't even have time to read two paragraphs. If I were to write a book arguing why Bitcoin is the superior investment asset, maybe only 0.1% of people would read it in ten years. But if I simply say "there is no second best option," if I can get a three-year-old with a beard to say "there is no second best option," like "Baby Saylor," it would be a million times more efficient. So I think these are important because unless you package the information in a viral format, you simply can't spread the information effectively enough.

Moderator: Great. We get a lot of questions about NAV (net asset value per share), and a lot of people are curious about it. So do you think it's possible that NAV could go below 1 in a bear market? If it does, how would that affect your strategy?

Michael Saylor: I think an important point about this is that I sometimes see analysts like on Twitter say, "Oh, it's just like GBTC (Grayscale Bitcoin Trust), Grayscale's NAV has gone below 1 before." But what they ignore is that Grayscale is a trust company, a closed trust, and we are an operating company. Trust companies do not have the option to refinance, raise debt, sell securities, buy securities, recapitalize, or repurchase their own shares. So you should think of a trust company as… well, I’m probably going to pick the wrong metaphor and people are going to hate me… it’s just a form of corporate entity that doesn’t have operational flexibility in terms of managing its capital structure. An operating company has much more flexibility.

We can buy stock, sell stock, recapitalize, we can take on debt to repair or close gaps. So, at the end of the day, I think the example that people saw in the crypto market where Grayscale’s stock price was below NAV was because it was a trust company, not an operating company.

Theoretically, when an operating company or a company that’s in some kind of business has a stock price below NAV, it’s because investors have lost confidence in the management team and they believe that the irrational behavior of the management team is destroying shareholder value. For example, if I gave myself a compensation package of a billion dollars a year and announced it, the stock price would plummet and people would say… If I just said, “Hey, I have $64 billion in Bitcoin and I’m going to pay myself a billion dollars a year for the next 64 years,” people would lose confidence in the company and they’d say, “The management team is robbing shareholders.” They’d sell the stock and the stock would trade below NAV. It's because the management team's actions are not aligned with the interests of shareholders that the stock is below NAV.

That being said, we have structured the company in a way that it can generate earnings and profits even at or below NAV. For example, we have $64 billion of Bitcoin. If the stock price drops to $1 tomorrow, we certainly won't sell equity, bullshit, we'll sell preferred stock. We'll sell equity at 10 times the overcollateralization of Bitcoin, 10% yield, and generate billions of dollars of income from the sale of preferred stock or fixed income instruments. At some point, people will say, "Wow, they were generating income anyway." And then the value will go back into the equity. Or we'll... you know, sell preferred stock... If someone is stupid enough to short my stock to $1, I'll sell $1 billion of preferred stock and then buy back the common stock, right. I'll recapitalize the company and the common stock will go through the roof, and then they'll complain that we bought what they were selling.

So, an operating company can do that. A trust company, a trust fund, an ETF can't do that. A closed trust can't do what I'm describing. So the way I look at the world, and the way we look at the world is when someone is irrationally mispricing something, if it's mispriced under, we buy it, if it's priced at a huge premium, we might sell it, not to drive the price down, just to capture the premium. We structure all of our preferreds so that this preferred I sell to people who want the yield in dollars, that preferred I sell to people who want the convertible feature, another preferred I sell to people who want the yield in yen, I'll also sell this thing to people who might want the yield in euros. I'll create this for people who want leverage.

Ultimately, we're creating value. If one of these securities is trading weak, we either stop selling it or we start buying it. And... If you didn't go to business school, I'll condense it into one sentence: This is what business school teaches - keep your options open. That's what you learn in business school. How do you create value? You have to create option value. So you ask, why do you have this preferred and that preferred, why do you sometimes do this and sometimes not? We're creating option value. The more optionality we create, the more opportunities we have.

Take the STRF product, which is a product tied to interest rates, for example, someday someone will start talking about interest rates collapsing, maybe someone will write a report about the Fed being under pressure to lower interest rates, and then SOFR (Secured Overnight Financing Rate) will collapse, or the forward rate curve will collapse, and the price of the STRF product will go up. This has nothing to do with Bitcoin, it has nothing to do with our equity, it has nothing to do with MNAV, it has to do with people's perception of whether Jerome Powell will change something. So we are creating optionality in the credit market. Just like other people will say, "I think S&P is going to start providing credit ratings for Bitcoin companies like MSTR." Then the price of these things will reset, and demand will surge. If we have an ATM (marketplace-based issuance mechanism), when demand surges, we can sell $10 billion in a week. If we don't have an ATM and demand surges, we can't sell anything in a week, and then we talk to some bankers for four weeks, and by the time we act, the opportunity has passed.

So what makes our company a behemoth is having multiple ATMs in multiple capital markets, all tied to different predictions, like your predictions on interest rates, your predictions on Bitcoin volatility, your predictions on Bitcoin itself, your predictions on crypto policy. All of these futures are constantly changing, and we're straddling that future and being able to buy, sell, or hedge any of them in real time, whether it's millions, tens, hundreds, or billions. Sometimes you might do nothing for a month or two, and then you might do a $2 billion trade in two hours. So maybe you'll do something on an ongoing basis, but we've built our business to straddle the crypto economy and the traditional financial economy and profit from volatility. We've been pretty thoughtful about that. So, you know, that's the joke: if you're a closed trust and you're trading below NAV, that's a dead end. If you're an operating company and we're trading below NAV, we're profiting from that, and that's good for me. The less rational the market is, the better it is. If you short our stock to 10% of NAV, we're making billions of dollars a day. So we have a very anti-fragile structure. And, I think we're very optimistic about the outlook there because I'm pretty sure the market is going to remain volatile.

Moderator:Do you think Bitcoin will start as a store of value and eventually become a global currency like other forms of money have in the past?

Michael Saylor:I think if you read the...if you read the history of the Rothschilds, the greatest bankers of the 19th century, they had a network. The Rothschild Bank was that network, and the primary capital asset that was traded was sovereign debt. They traded British debt, French debt, and German debt, with a par value of 100. They moved these instruments very quickly - bearer bonds. And then they...that's how the entire banking network worked in the 19th century. And then when they did cash settlement, you know what cash settlement means? The Rothschilds cash settlement in the 19th century...

The reason I bring this up is because Bitcoin is a peer-to-peer cash system. All these people, they always @ me on Twitter, saying I don't understand what peer-to-peer cash is. When the Rothschilds settled a bearer bond trade in cash in the 19th century, that meant they exchanged the bond for gold bars or coins. So cash meant gold, it meant metal money, whether it was in the form of bars or coins. But even so, gold was too slow and cumbersome to settle very frequently. So throughout the century of the gold standard, there was a fiat currency - these bonds were traded through the cash system (gold).

I think this is important because if you look at Bitcoin today, Bitcoin is digital gold, it's digital cash. What does that mean? It's a bearer instrument, a monetary instrument. What do I think is going to happen? I think it's going to continue to grow from trillions to tens of trillions to trillions of dollars, and become larger and larger in the capital stack.

I think other forms of money, fiat money, are here to stay. You're going to have sovereign debt, corporate debt, other types of municipal debt. As long as there have been cities, they've issued debt; as long as there have been countries, they've issued debt; as long as there have been corporations, they've issued debt; as long as there have been families who want to buy homes, they've issued debt -- mortgage-backed debt. You're going to have all these forms of credit. When people do cash settlements, the settlement network will be Bitcoin.

Was the world in the 19th century built on a gold standard? Yes, gold. But what was in circulation? Sovereign debt. Will the world in the 21st century be built on a Bitcoin standard? Yes. What will be in circulation? Every form of credit with every reputable counterparty. And then above that, there's the equity layer of public companies, private equity. You'll have all sorts of other collectibles. I don't see a world where those things go away, I don't see a world where they need to go away. So I just see a world where there are multiple types of assets, but the king-like top asset, the root asset, everything else is settled on that, or everything else is oriented to that - the center of gravity of the financial universe that's forming in the 21st century is Bitcoin. It's like... things will fall to the center of gravity, which is the center of the earth, and none of you have been there. But that doesn't mean it doesn't control everyone. Everything will be positioned in a frame of reference. Moderator: Let's talk about AI, Musk said "AI could increase global GDP by 10 times, and we know that part of that value will go into Bitcoin." So if GDP grows that much, does that, in your opinion, significantly increase the terminal value of Bitcoin? Michael Saylor: In classical economics, they talk about the economy being driven by land, labor, and capital. AI is digital intelligence, Bitcoin is digital capital. The consequence of AI is that AI will do the work of a billion people, then 10 billion people, then 100 billion people, then 1 trillion people. Then AI will go into robots, and robots will do the physical work of a billion people, then 10 billion people. Then it will go into your cars, your appliances, everything. So what is happening? We will have a digital transformation of the workforce, and the demand for labor as we know it will change, it will go down. Robots don't need as much space as we do, and AI doesn't need space at all. So the demand for land as an input to the economy will go down 10 times. The demand for labor as an input to the economy will go down 100 times. What's left? Capital. Capital will explode.

You know, you're going to have companies that are worth a million dollars, a million robots creating a million robots that may only have 22 employees, but are worth trillions of dollars. No need for land, no need for labor, but capital. Where is the capital going to go? It's going to go into Bitcoin.

I mean, if you create extreme wealth, there are going to be two kinds of people. One is the people who have bought Bitcoin, who are going to have private wealth, and they are going to live off of that, or live off of something that is denominated in Bitcoin. And then there are the rest of the people who are going to get wealth redistributed through the political system. There will be no shortage of material, material will be infinite, and it will be redistributed through a political economic process, and it will be interesting.

But the consequence of AI is that it will create a lot of capital, and the capital you want will be digital capital because it is the best capital, and it is the most useful capital. When AIs are thinking a million times a second and transacting with another AI a million times a second, they will be transacting in Bitcoin, and they will be transacting in digital capital a million times, a billion times faster. They will absolutely not exchange buildings, they will absolutely not exchange gold bonds, gold bars, or gold coins, they will absolutely not trust the sovereign credit of anybody else, they will not trust private credit, public credit, sovereign debt, they will not use cash. They will be using purely digital capital in cyberspace.

So all of this is bullish for Bitcoin, and it will drive the price of Bitcoin higher. And, you know, if you haven't figured out how to make money by putting AI into your business - which is hard - then I'll give you a simple answer: You just buy as much Bitcoin as you can because we know where all the money is going to end up. Capital is all going to flow into the Bitcoin network, and the more everything else grows, the more Bitcoin will grow. So you can just go there and wait for the world to make you rich.

Moderator:One of the Mr. Prescotts asked a great question: Is there a point where when one entity holds too much Bitcoin, it negatively impacts the network or reduces its utility?

Michael Saylor:No, I think the network protocol is protected by the distribution of mining, the distribution of the protocol itself, the distribution of the nodes, the distribution of the holders, the distribution of the exchanges, the distribution of the derivatives, and the distribution of the regulators on it. It's a global phenomenon.

A firm…if BlackRock owns 3% or 2% of Bitcoin, or if Strategy owns 2%, 3%, 4%, or 5%, it doesn’t matter. Because in the process of us going after that 2%, the price of Bitcoin went from $10,000 to $100,000. Which means that in the process of us going after that…By the way, technically, if you look at the Sailor tracker, you’ll see that all the work we did to get to 2.5% generated about $23 billion for us. But it generated $2.2 trillion for other people. It’s not like I got the money. What was the percentage of $2 trillion? Other people had $2 trillion, we made $20 billion, and we only took a tiny fraction of that.

So, just like when Wall Street owns 5% of Bitcoin, that means 95% of the $2.5 trillion is not Wall Street’s. When Wall Street owns 10% of Bitcoin, and the price of Bitcoin is $1 million per coin, that means there’s nearly $20 trillion of non-Wall Street money that’s distributed around the rest of the world, everywhere else. This energy… It’s impossible for anyone to take over Bitcoin in a hostile way because the more you actively buy Bitcoin, the more you empower all the other people who disagree with you. You see, the harder I work, the more powerful all the people who have different opinions become.

So I call it: it’s a perfect machine made of imperfect parts. Yes, the world is full of people who own Bitcoin or are in countries you don’t like, in ways you don’t like, doing things you don’t like, but they are empowering you, and the harder they work, the more they empower you. So what happens? It’s like if Berkshire Hathaway decides to buy $100 billion of Bitcoin tomorrow, what does that mean for the rest of us? It’s not going to hurt you, it’s going to help you. What if they do the opposite?

So I think Bitcoin is a classic antifragile network that is becoming more and more stable, more and more conservative, more and more indestructible, and more and more antifragile. Any entity that embraces it, whether you agree with their values ​​or not, is making it stronger. They are all just hardening the network against the next attacker.