WEBVTT - Strategy Founder Michael Saylor Talks US Regulation Helping Bitcoin 0:00:02.540 --> 0:00:07.070 Bloomberg Audio Studios, podcasts, radio, news. 0:00:07.830 --> 0:00:11.730 Corporate Bitcoin buying is also picking up again. Strategy leading 0:00:11.789 --> 0:00:15.130 the charge. Michael Saylor's company just added another $ 21 million 0:00:15.210 --> 0:00:19.200 of Bitcoin, extending a renewed buying streak as prices recover 0:00:19.300 --> 0:00:23.500 and more companies move crypto back onto their balance sheets. Strategy, 0:00:23.540 --> 0:00:26.720 check this out, now holds roughly $ 70 billion in Bitcoin. 0:00:27.080 --> 0:00:28.220 And Tim, that's about 4% of total supply. 0:00:29.550 --> 0:00:31.870 Well, let's get to more on strategy. Joining us from 0:00:31.910 --> 0:00:35.069 DC FinTech Week at the World Bank for an exclusive 0:00:35.110 --> 0:00:38.510 interview is Michael Saylor, founder and executive chairman of Strategy. 0:00:38.550 --> 0:00:42.350 It's the world's largest publicly traded Bitcoin accumulator. Michael, always 0:00:42.390 --> 0:00:44.770 good to see you. Thanks so much for joining us. 0:00:45.229 --> 0:00:48.209 Bitcoin had a great summer, still, though, about 30 percent 0:00:48.250 --> 0:00:50.300 below last year's all time highs. 0:00:50.409 --> 0:00:51.120 What is your. 0:00:51.000 --> 0:00:53.540 View on where Bitcoin goes from here? 0:00:55.970 --> 0:00:58.450 Well, we think we're at the beginning of a bull market. 0:00:59.450 --> 0:01:03.730 We normally look at where Bitcoin is versus 200-week moving average, 0:01:03.770 --> 0:01:09.080 and we bounced slightly below it. Now we're moving up 25% premium. 0:01:09.120 --> 0:01:15.600 So the headwinds were restrictive trade policy, restrictive foreign policy, 0:01:15.700 --> 0:01:21.420 restrictive currency or monetary policy. And now we're rotating into 0:01:21.500 --> 0:01:26.580 some tailwinds. We've got a very favorable regulatory environment. We've 0:01:26.610 --> 0:01:31.950 got banking adoption accelerating. We've got tokenized securities and the 0:01:31.990 --> 0:01:36.830 digital asset space accelerating. We've got the formation and the 0:01:36.850 --> 0:01:40.039 strengthening of digital credit networks and, of course, banking credit 0:01:40.080 --> 0:01:42.699 coming online. And all these things are very auspicious for 0:01:42.720 --> 0:01:43.220 the asset. 0:01:43.760 --> 0:01:47.320 Having said that, I feel like, Michael, everyone is competing 0:01:47.440 --> 0:01:51.900 for capital against AI. So much money flowing into it. 0:01:51.950 --> 0:01:54.770 We see it just kind of squeezing out investments elsewhere. 0:01:55.110 --> 0:01:57.710 How long do you think that continues? And what kind 0:01:57.730 --> 0:01:59.910 of an impact are you guys feeling in the crypto 0:01:59.930 --> 0:02:00.730 space as a result? 0:02:03.400 --> 0:02:06.540 Well, you can see that AI is going to demonetize 0:02:06.580 --> 0:02:09.780 a lot of equities that are based upon labor and talent. 0:02:10.320 --> 0:02:12.480 And so there's a lot of risk in the AI trade, 0:02:12.520 --> 0:02:16.250 especially across equities, either equities that are attempting to create 0:02:16.270 --> 0:02:19.790 the next magic product and they might miss, or equities 0:02:19.850 --> 0:02:22.790 that are based upon tens of thousands of humans and 0:02:22.830 --> 0:02:27.510 they're getting demonetized and degraded. On the other hand, there's 0:02:27.530 --> 0:02:30.470 going to be a rotation into scarce desirable capital, whether 0:02:30.500 --> 0:02:34.360 that's Palm Beach real estate or gold or digital gold 0:02:34.419 --> 0:02:39.400 in the form of Bitcoin or some trophy asset. Capital 0:02:39.460 --> 0:02:41.679 investors are going to look for things that the robots 0:02:41.740 --> 0:02:45.680 can't make more of. And certainly the king of commodities 0:02:45.740 --> 0:02:48.560 right now is Bitcoin because it's digital capital. 0:02:48.919 --> 0:02:51.150 So why haven't we seen that yet? Because the narrative 0:02:51.190 --> 0:02:54.870 that you're explaining right now, we've seen it Let's say 0:02:55.010 --> 0:02:58.669 with the SaaS-pocalypse, and we've seen concerns about software companies, Michael, 0:02:59.710 --> 0:03:03.559 when it comes to the AI trade. If the thesis 0:03:03.860 --> 0:03:06.740 that you espouse comes true and that people will look 0:03:06.760 --> 0:03:10.669 for stuff with scarcity, why hasn't it materialized with Bitcoin yet? 0:03:12.950 --> 0:03:15.130 Well, if we look at the Bitcoin standard error, which 0:03:15.190 --> 0:03:18.870 started when we bought our first Bitcoin in August of 2020, 0:03:18.870 --> 0:03:23.620 Bitcoin is up approximately 38% a year every year. MSTR, 0:03:23.660 --> 0:03:27.220 the digital equity that our company represents, is up 52% 0:03:27.220 --> 0:03:30.540 or 53% every year. The only stock you know of 0:03:30.580 --> 0:03:34.440 that's outperforming that is NVIDIA. Every other MAG7 stock and 0:03:34.760 --> 0:03:37.880 all the other major S & P stocks are underperforming that. 0:03:38.720 --> 0:03:43.300 Bitcoin is outperforming gold. Gold is outperforming the S & 0:03:42.840 --> 0:03:46.740 P index. And ultimately, if you look at the entire complex, 0:03:47.320 --> 0:03:51.400 digital capital is the strongest performing capital. And digital credit, 0:03:51.580 --> 0:03:56.710 like STRC, is paying double to triple other conventional credit instruments. 0:03:56.870 --> 0:04:01.850 And the digital equities like MSTR or Strive ASST, they're 0:04:01.930 --> 0:04:07.910 outperforming most, you know, 98% of the other publicly traded stocks. 0:04:08.610 --> 0:04:10.890 So I am curious, though, Michael, you know the debate 0:04:10.910 --> 0:04:14.500 that's been out there that crypto, overall Bitcoin, it's a 0:04:14.540 --> 0:04:18.159 safe haven or it's a growth asset. So how should 0:04:18.200 --> 0:04:20.730 investors be clarifying it or considering it? 0:04:20.740 --> 0:04:22.990 Yeah. 0:04:24.470 --> 0:04:27.370 Bitcoin is a block of digital capital. And so it's 0:04:27.390 --> 0:04:31.710 about a 40 vol, 40 ARR asset. You can carve 0:04:31.770 --> 0:04:35.100 that block of capital and step it down into digital credit. 0:04:35.130 --> 0:04:37.420 So you can create something with a volatility less than 0:04:37.420 --> 0:04:40.540 10 that pays a 10% dividend as a return of capital. 0:04:41.360 --> 0:04:44.060 Or you can amplify it and step it up and 0:04:44.100 --> 0:04:46.740 you can create an equity like MSTR, which is an 0:04:46.740 --> 0:04:50.230 80 vol asset. And when you feed the high vol 0:04:50.310 --> 0:04:53.730 equities in the derivatives market, you get extremely valuable options. 0:04:54.470 --> 0:04:59.290 So I think a Bitcoin is just raw financial energy. Look, 0:04:59.310 --> 0:05:02.130 there's more volatility in gold. Gold was showing a vol 0:05:02.150 --> 0:05:05.820 of 25, whereas the S & P is 10 to 15. 0:05:05.820 --> 0:05:08.400 And so if you're a vol trader, if you're a 0:05:08.400 --> 0:05:11.920 derivative trader, you want to feed high volatility into the derivatives. 0:05:12.060 --> 0:05:16.599 If you're an equity investor... You want either amplified Bitcoin 0:05:16.620 --> 0:05:19.080 or Bitcoin. If Bitcoin is up 40%, how do I 0:05:19.120 --> 0:05:22.000 get 50% or 60%? And the way you do that 0:05:22.080 --> 0:05:27.810 is you amplify the equity by using credit. in order 0:05:27.850 --> 0:05:30.770 to drive increase in Bitcoin per share. So there's something 0:05:30.810 --> 0:05:33.990 for every type of investor here, depending upon whether you're 0:05:34.010 --> 0:05:38.669 a short-duration credit investor, a long-duration credit investor, a long-duration 0:05:38.710 --> 0:05:42.589 capital investor, or you're an equity investor. I think that 0:05:43.089 --> 0:05:47.680 most of the markets fixated on AI, they understand digital intelligence, 0:05:47.740 --> 0:05:50.500 but what I'd say there is those investments are expensive 0:05:50.540 --> 0:05:54.500 and risky and complicated. Most of the market doesn't understand 0:05:54.600 --> 0:05:59.180 digital capital, digital credit, and digital equity. Those investments aren't 0:05:59.200 --> 0:06:03.820 that risky, and they're actually not that complicated. They're just contrarian, 0:06:04.140 --> 0:06:08.120 and people don't think this way. And so they have 0:06:08.160 --> 0:06:10.380 a hard time getting their heads around these new ideas. 0:06:10.540 --> 0:06:13.150 Hey, so, okay, Michael, new ideas, I get it. 0:06:13.260 --> 0:06:15.310 So if there's something there for everything, why did you 0:06:15.320 --> 0:06:17.950 guys actually sell some Bitcoin back in June? 0:06:17.970 --> 0:06:21.570 It was just a handful. Bitcoin was trading at around $ 73, 000. 0:06:21.010 --> 0:06:27.290 It kind of broke with your longstanding idea of recommendations. 0:06:26.770 --> 0:06:28.330 To never part with Bitcoin. 0:06:28.790 --> 0:06:31.690 So it was a tiny amount, but do you regret 0:06:31.740 --> 0:06:33.520 doing that? And why sell in the first place if 0:06:33.560 --> 0:06:37.460 you think that it kind of makes sense in multiple environments? 0:06:39.810 --> 0:06:41.330 The way to think of our company is we're a 0:06:41.370 --> 0:06:45.210 structured finance company. So on any given day, we might 0:06:45.270 --> 0:06:48.710 buy Bitcoin or sell Bitcoin. We might buy dollars or 0:06:48.770 --> 0:06:52.060 sell dollars. We might buy equity or sell equity. We 0:06:52.100 --> 0:06:56.880 could sell MSTR or buy it back. We might buy credit, STRC. 0:06:57.020 --> 0:07:00.360 We might sell it. To the extent that we can 0:07:00.480 --> 0:07:06.820 swap equity for capital, capital for cash, cash for for 0:07:06.839 --> 0:07:10.890 our securities or back for credit, then we can arbitrage 0:07:10.990 --> 0:07:14.110 any opportunity in the equity, credit, or capital markets to 0:07:14.130 --> 0:07:16.810 the benefit of our shareholders. If we were to take 0:07:16.850 --> 0:07:19.350 the position that we will never sell the equity, or 0:07:19.410 --> 0:07:21.970 we will never sell the capital, or we will never 0:07:22.030 --> 0:07:26.150 sell the credit, we actually degrade the value of the company. 0:07:26.250 --> 0:07:28.870 So it's important for us to be able to trade 0:07:29.070 --> 0:07:32.770 any asset pair in any direction, any time. And what 0:07:32.810 --> 0:07:36.130 we established this summer is the ability for the company 0:07:36.180 --> 0:07:38.500 to buy and sell the credit, buy and sell the equity, 0:07:38.520 --> 0:07:40.340 and buy and sell the Bitcoin. And that was a 0:07:40.380 --> 0:07:44.840 big unlock for all of our investors and every asset class. 0:07:44.900 --> 0:07:49.420 Well, you might call it unlock, but it spooked the 0:07:49.440 --> 0:07:52.320 crypto market and specifically spooked Bitcoin. And you saw Bitcoin 0:07:52.350 --> 0:07:55.070 move lower as a result of that because they saw 0:07:55.130 --> 0:07:59.750 Michael Saylor of Strategy sell something that he said people 0:07:59.770 --> 0:08:00.390 should hold on to. 0:08:01.060 --> 0:08:01.460 Forever. 0:08:01.500 --> 0:08:02.370 Was that a mistake? 0:08:04.390 --> 0:08:08.930 We were inoculating the market and the first move of 0:08:08.930 --> 0:08:13.660 32 Bitcoin, people overreacted to. But then later on, we 0:08:13.680 --> 0:08:16.500 were able to sell thousands of Bitcoin without the market 0:08:16.560 --> 0:08:18.740 reacting to it at all. In fact, later on, we 0:08:18.780 --> 0:08:21.640 sold thousands of Bitcoin and the market traded up So 0:08:21.680 --> 0:08:24.050 the important thing is that when you do something for 0:08:24.060 --> 0:08:27.630 the first time, sometimes you get a cramp. But you 0:08:27.670 --> 0:08:31.710 have to condition all of your investors and the market 0:08:31.770 --> 0:08:35.230 in general that you're going to buy and sell depending 0:08:35.309 --> 0:08:37.829 upon what's in the best interest of the shareholders. If 0:08:37.850 --> 0:08:39.449 you're going to run the company and do the right 0:08:39.510 --> 0:08:42.510 thing for Bitcoin and the right thing for the credit 0:08:42.530 --> 0:08:46.000 investors and the right thing for the equity investors. It's 0:08:46.040 --> 0:08:48.120 just growing pains and we're growing up. 0:08:48.820 --> 0:08:51.880 So then are you conditioning... the market and investors for 0:08:51.900 --> 0:08:54.450 selling more Bitcoin in the next few months. 0:08:56.760 --> 0:08:59.580 As a general rule, we're an acquirer. So we have 0:08:59.640 --> 0:09:01.839 acquired quite a bit of Bitcoin. I think we've acquired 0:09:01.880 --> 0:09:03.970 more Bitcoin than any company in the world this year. 0:09:04.710 --> 0:09:08.189 And you should expect that we will increase our Bitcoin 0:09:08.250 --> 0:09:13.210 holdings over time. We're moving into a bull market. So 0:09:13.250 --> 0:09:16.710 I would expect we'll probably be acquiring Bitcoin and we 0:09:16.750 --> 0:09:21.320 will be issuing credit into the bull market. In a 0:09:21.380 --> 0:09:26.500 bear market, you would actually use dollars to pay the 0:09:26.559 --> 0:09:30.600 credit dividend or you might raise dollars with Bitcoin. But 0:09:31.020 --> 0:09:32.610 it depends upon the market cycle. 0:09:32.760 --> 0:09:35.929 You've said twice during this conversation that we're in a 0:09:35.950 --> 0:09:38.630 bull market when it comes to Bitcoin right now. How 0:09:38.690 --> 0:09:40.569 high in this cycle do you see it going? 0:09:43.840 --> 0:09:46.640 Yeah, I think that it should definitely move back into 0:09:46.660 --> 0:09:49.229 the six figures, back beyond $ 100, 000. And our long-term forecast 0:09:49.250 --> 0:09:50.910 is Bitcoin grows 20% to 30% a year over the 0:09:50.950 --> 0:09:52.070 next 20 years. So, clearly, the last 12 months have 0:09:52.090 --> 0:10:02.340 been a contraction. I think we hit the bottom around 0:10:02.500 --> 0:10:06.620 slightly below 60,000. I think we bounced off it. Now 0:10:06.640 --> 0:10:09.800 we're moving up into the 80s. I think we'll continue 0:10:09.840 --> 0:10:11.250 to march forward from here. 0:10:11.250 --> 0:10:13.170 100,000 by when, Michael? 0:10:15.830 --> 0:10:19.120 I'm not a short-term trader. We make plans, you know, 0:10:19.140 --> 0:10:20.479 in centuries. But you understand this market. 0:10:20.520 --> 0:10:23.179 You've seen the ups and downs. I mean, and you've 0:10:23.200 --> 0:10:25.820 got conviction behind this number. I'm just curious, by the 0:10:25.860 --> 0:10:27.320 end of the year, by the middle of next year? 0:10:27.340 --> 0:10:30.160 You know, what I would say is if you need 0:10:30.210 --> 0:10:32.690 your money in the next three months, you should probably 0:10:32.710 --> 0:10:35.150 have it in a money market fund. If you want 0:10:35.490 --> 0:10:37.989 to make a decent return in the crypto economy and 0:10:38.010 --> 0:10:40.410 you need the money in three months to four years, 0:10:40.470 --> 0:10:43.830 you should buy the digital credit like STRC. If you 0:10:43.870 --> 0:10:46.670 don't need money for the next four years and you're 0:10:46.700 --> 0:10:49.340 a capital investor, you want to minimize your counterparty risk, 0:10:49.360 --> 0:10:51.140 you ought to buy Bitcoin and you ought to expect 0:10:51.179 --> 0:10:55.080 to get like a 20% to 30% ARR on that. 0:10:55.679 --> 0:10:57.560 And then if you're an equity investor and you want 0:10:57.580 --> 0:11:00.250 to outperform that, you should buy the digital equity of 0:11:00.309 --> 0:11:04.090 a company like MSTR or Strive. And you can expect 0:11:04.110 --> 0:11:07.870 to outperform Bitcoin because we're able to amplify our Bitcoin 0:11:07.910 --> 0:11:09.750 per share with our digital credit. 0:11:10.350 --> 0:11:12.690 Michael, if I may just go back to something you said, 0:11:12.730 --> 0:11:16.450 maybe because it's flu season. You said inoculating, you know, 0:11:16.550 --> 0:11:19.790 introducing when you guys sold some this idea of inoculating 0:11:19.830 --> 0:11:23.240 the market. So introducing an idea is the idea that 0:11:23.340 --> 0:11:26.079 crypto is going to be something you're buying and selling, 0:11:26.100 --> 0:11:28.920 like I've been hearing, and that you no longer hold 0:11:28.960 --> 0:11:30.980 to that idea that you kind of hold it forever. 0:11:33.610 --> 0:11:36.729 The idea is the company has something in excess of 0:11:36.730 --> 0:11:40.690 $ 70 billion of Bitcoin in any given day, and that's 0:11:40.730 --> 0:11:43.929 what backs the credit. So if the company is going 0:11:43.970 --> 0:11:47.150 to back billions of dollars of digital credit and pay 0:11:47.350 --> 0:11:50.870 billions of dollars of dividends in the future, then it's 0:11:50.929 --> 0:11:54.910 important to be able to monetize our primary asset when 0:11:54.950 --> 0:11:57.630 and if we need to. We can do that by 0:11:57.670 --> 0:12:02.120 selling derivatives like MSTR. We can also sell Bitcoin derivatives, 0:12:02.160 --> 0:12:04.240 but we can also sell the Bitcoin. And there are 0:12:04.280 --> 0:12:06.559 times when we would sell any of those in order 0:12:06.580 --> 0:12:08.920 to raise U.S. dollars, in order to back the credit. 0:12:09.250 --> 0:12:10.310 That's the big idea. 0:12:10.809 --> 0:12:14.110 I think it's fair to say that that strategy is the... 0:12:15.030 --> 0:12:20.160 is the original accumulator. It's the company that invented the 0:12:20.240 --> 0:12:23.240 digital asset treasury model. Since then though, many of their 0:12:23.380 --> 0:12:26.099 debts have emerged. ETFs too, there are a lot of 0:12:26.140 --> 0:12:29.969 ways to own Bitcoin. Why in your view is strategy 0:12:29.990 --> 0:12:30.770 still the best way? 0:12:33.710 --> 0:12:35.600 If you go online and you try to buy credit 0:12:35.630 --> 0:12:39.579 right now, you're getting 4% or 3.5% from a money market. 0:12:39.679 --> 0:12:44.320 You're getting 8% or 9% from private credit. It's illiquid. 0:12:45.080 --> 0:12:48.490 We're able to create credit that pays 10% to 12% 0:12:48.490 --> 0:12:50.770 as a return of capital, which means you defer the 0:12:50.809 --> 0:12:55.610 tax on it. It's the highest effective yield, and it's 0:12:55.690 --> 0:12:58.630 the highest performing credit in the world, and that is 0:12:58.790 --> 0:13:02.770 a $ 300 trillion asset class. The reason that you want 0:13:02.809 --> 0:13:06.460 to buy a company like Strategy is we are able 0:13:06.520 --> 0:13:09.730 to create credit, billions and billions of dollars of it. 0:13:10.460 --> 0:13:13.339 If we sell $ 10 billion of digital credit next year, 0:13:13.780 --> 0:13:16.760 then our hurdle rate's about 10%, which means that if 0:13:16.800 --> 0:13:20.280 Bitcoin performs more than 10%, we just made $ 10 billion 0:13:20.320 --> 0:13:25.300 in net income. If Bitcoin appreciates 20%, we made $ 20 billion. 0:13:25.880 --> 0:13:29.189 So the company is a money machine. And of course, 0:13:29.250 --> 0:13:32.750 Bitcoin's been appreciating 38% a year for the past six years. 0:13:32.809 --> 0:13:35.810 So we think that Bitcoin will exceed our hurdle rate. 0:13:36.309 --> 0:13:41.280 We think that our credit sales generate pure cash flow. 0:13:41.980 --> 0:13:44.320 We think we've got the best product in the world, 0:13:44.360 --> 0:13:46.220 which is credit. I mean, who doesn't want a bank 0:13:46.260 --> 0:13:49.100 account that pays 10% that doesn't get taxed? I mean, 0:13:49.179 --> 0:13:52.170 everybody wants that. So we have the best product in 0:13:52.210 --> 0:13:54.730 the world. And the only way to create that product, 0:13:55.050 --> 0:13:59.069 which is high performance credit, is to have the highest 0:13:59.130 --> 0:14:03.500 performance capital, which is Bitcoin. And we're holding the largest 0:14:03.580 --> 0:14:05.760 volume of capital in the world. That gives us a 0:14:06.380 --> 0:14:08.840 massive advantage in the financial markets. 0:14:09.280 --> 0:14:11.469 Hey, we want to switch gears a little bit, Michael, 0:14:11.500 --> 0:14:15.170 and talk about what we expect to hear from MSCI 0:14:15.410 --> 0:14:18.809 on Friday. It's considering rules that could exclude you all 0:14:19.670 --> 0:14:22.600 from its global equity indices. What kind of decision do 0:14:22.620 --> 0:14:24.720 you expect and how important is it to you? 0:14:26.870 --> 0:14:29.310 You know, it's not that important to us. It's a 0:14:29.360 --> 0:14:33.320 fairly de minimis amount of capital that they control. We 0:14:33.360 --> 0:14:37.480 think their position so far has been disappointing because they're 0:14:37.680 --> 0:14:42.890 imposing prejudicial values on digital assets and deciding that, you know, 0:14:43.170 --> 0:14:47.810 oil or natural gas or land or machinery is capital, 0:14:47.910 --> 0:14:51.700 but Bitcoin is not capital. is a value judgment, and 0:14:51.720 --> 0:14:56.500 they're acting like an unregistered financial advisor. I think it's 0:14:56.520 --> 0:14:59.160 a bad precedent for them and for the industry, and 0:14:59.680 --> 0:15:02.940 I hope they reconsider it. But having said all that, 0:15:03.680 --> 0:15:07.450 digital assets are smarter, faster, stronger. They are the future. 0:15:07.470 --> 0:15:11.730 MSCI may not want to share in that future, but 0:15:11.890 --> 0:15:14.810 I think the investors will disagree, and of course the 0:15:14.870 --> 0:15:15.790 nation disagrees. 0:15:16.330 --> 0:15:17.610 Do you expect to be excluded? 0:15:20.320 --> 0:15:22.560 I don't have any particular expectation right now. 0:15:22.960 --> 0:15:24.610 But would you be happy if you were included? 0:15:27.630 --> 0:15:29.090 I think it would be good for them and good 0:15:29.110 --> 0:15:34.030 for the industry if they drop their initiative, but that's 0:15:34.070 --> 0:15:34.890 above my pay grade. 0:15:35.270 --> 0:15:38.420 At issue, though, is the question of whether you or 0:15:38.480 --> 0:15:42.500 not you are a, quote, operating business rather than engaged 0:15:42.820 --> 0:15:50.060 in accumulating assets. Where do you view strategy is? 0:15:50.140 --> 0:15:54.120 Are you an operating business? It's a silly notion because 0:15:54.140 --> 0:15:57.480 insurance companies and banks have assets and they're operating businesses. 0:15:58.000 --> 0:16:02.470 If MSCI decided that insurance company financial assets were non-operating 0:16:02.500 --> 0:16:05.850 or the bank's assets were non-operating, then they would exclude 0:16:05.930 --> 0:16:08.330 every insurance company, every bank, and half the oil and. 0:16:08.270 --> 0:16:10.670 Gas businesses from the index. But insurance companies, to be fair, 0:16:10.710 --> 0:16:16.380 provide a service other than... accumulating assets in the case 0:16:16.490 --> 0:16:19.750 of making a payout. They provide a service to customers. 0:16:19.770 --> 0:16:22.710 Yeah, the product of the... Yeah, can I answer? The 0:16:22.730 --> 0:16:26.250 product of the insurance company is the insurance policy. And 0:16:26.290 --> 0:16:29.340 the product of the bank is banks buy credit. Our 0:16:29.420 --> 0:16:32.700 product is digital credit. So we sell a product. It 0:16:32.740 --> 0:16:37.240 pays 10% to 12% dividend yield. The insurance company... It 0:16:37.300 --> 0:16:40.910 sells you an insurance policy or an annuity, right? So 0:16:41.450 --> 0:16:44.590 all of these are finance companies. They're selling financial products. 0:16:44.610 --> 0:16:48.050 They're operating companies. They're in the index. So the thing 0:16:48.110 --> 0:16:52.410 that many people miss is that digital credit is the product, 0:16:52.490 --> 0:16:55.860 and you need an operating business that's actively managing its 0:16:55.910 --> 0:17:00.200 capital to create a product. Nobody doubts that J.P. Morgan 0:17:00.240 --> 0:17:02.980 is an operating company and they do stuff. Nobody doubts 0:17:03.020 --> 0:17:06.659 that AIG is an operating company. They do stuff. Nobody 0:17:06.700 --> 0:17:10.610 doubts any finance company as an operating company. You have 0:17:10.640 --> 0:17:14.170 to do things with the capital. We're not a holding company. 0:17:14.210 --> 0:17:17.230 We're doing things with the capital, right? You just went 0:17:17.270 --> 0:17:20.210 into detail about how people were having an apoplectic fit 0:17:20.330 --> 0:17:23.669 about us doing things with 32 Bitcoin. The thing that 0:17:23.690 --> 0:17:27.280 we were doing was backing the credit. The credit is 0:17:27.380 --> 0:17:29.760 the product, and we've found a way to create the 0:17:29.800 --> 0:17:33.080 world's best credit and do it with the world's best capital. 0:17:33.200 --> 0:17:36.520 So we are an operating company. That's not really a 0:17:36.560 --> 0:17:40.380 debate in the accounting profession. The accountants agree. The SEC 0:17:40.440 --> 0:17:45.889 filings agree. Under SEC law, that's very, very clear. MSCI 0:17:45.950 --> 0:17:47.949 is out on their own on this one. I don't 0:17:47.990 --> 0:17:50.690 know why, but again, not my decision. 0:17:51.090 --> 0:17:53.790 Hey, we do want to get your view on the 0:17:53.830 --> 0:17:57.250 regulatory backdrop. What do you make of it following the 0:17:57.310 --> 0:17:59.990 Senate's failure to advance the Clarity Act? 0:18:00.070 --> 0:18:01.910 It certainly got a lot of coverage here at Bloomberg. 0:18:02.270 --> 0:18:04.909 Also, the recent rulemaking efforts from both the SEC and 0:18:04.950 --> 0:18:06.230 the CFTC. 0:18:08.670 --> 0:18:13.399 Yeah, so we have very pro-digital assets regulators. Within a 0:18:13.460 --> 0:18:18.139 week of clarity stalling, we got positive guidance from Treasury, 0:18:18.270 --> 0:18:22.550 from the CFTC, and from the SEC. The CFTC gave 0:18:22.590 --> 0:18:26.210 very good guidance for crypto derivatives. The SEC gave good 0:18:26.250 --> 0:18:31.590 guidance for tokenizing securities. Treasury gave good guidance for digital currencies. 0:18:32.430 --> 0:18:35.540 The Clarity Act had 600 pages of restrictions in it. 0:18:36.070 --> 0:18:39.410 And so while it would de facto or de jure 0:18:39.490 --> 0:18:43.020 legitimize the industry, it did it with 600 pages of restrictions. 0:18:43.690 --> 0:18:48.480 When Clarity stalled, the restrictions went away and the guidance 0:18:48.520 --> 0:18:50.940 that came out is actually much better for the industry. 0:18:50.980 --> 0:18:51.120 So. 0:18:51.980 --> 0:18:55.080 The reason the industry is rallying and the reason Bitcoin 0:18:55.119 --> 0:18:58.820 is rallying is because Bitcoin doesn't need the law. And 0:18:58.840 --> 0:19:02.960 the rules coming out of the administration are actually progressive, 0:19:03.160 --> 0:19:07.050 pro-digital assets. And I think that they'll catalyze a wave 0:19:07.090 --> 0:19:10.230 of growth in the industry. I think clarity stalling was 0:19:10.250 --> 0:19:12.389 the best thing that could have happened to our industry. Wow. 0:19:12.810 --> 0:19:14.970 That's surprising to hear from you. I don't know if 0:19:14.990 --> 0:19:16.879 a lot of people necessarily think that. Just in the 0:19:16.900 --> 0:19:19.619 last 30 seconds that we have with you, Michael, is 0:19:19.640 --> 0:19:22.639 there a risk that all of this changes after the 0:19:22.680 --> 0:19:26.010 midterms or even in a new administration in just a 0:19:26.030 --> 0:19:26.570 couple of years? 0:19:29.350 --> 0:19:34.270 Look, the key to durability is to create a magic product. 0:19:34.710 --> 0:19:37.500 So if you sell a billion robots that everybody loves 0:19:37.560 --> 0:19:39.820 and a billion cars that drive themselves, and if you 0:19:39.840 --> 0:19:44.119 give everybody a bank account that pays 10% instead of 4%, 0:19:44.119 --> 0:19:46.850 or you give them digital assets that empower them and 0:19:47.030 --> 0:19:54.170 delight them, them, then you'll pry those magic products from 0:19:54.210 --> 0:19:57.750 people's cold, dead fingers. So the key is... Give 100 0:19:57.750 --> 0:20:00.949 million people a product they want. It doesn't matter who 0:20:00.990 --> 0:20:05.700 gets elected in 2028. They're not taking away people's Teslas 0:20:05.980 --> 0:20:11.980 or Starlinks or Uber or iPhones or AI because people 0:20:12.060 --> 0:20:14.050 love it and they see the value in it. So 0:20:14.090 --> 0:20:15.470 the key is product excellence.