MSTR Today: Don’t Get Left Behind in the Bitcoin Boom

0:00Welcome to MSTR today in the Treasury Titans. It is Saturday. It is September 5th. It is JLD and nothing in this video is financial advice and Michael Sailor wants us to know something. He wants us to know something really big. He wants us to say bye-bye bears and that's bears with a capital Bitcoin B Bye-bye bears. I've actually been on this road on this trolley in San Francisco with Aqua Tras behind us. How many people have been on this trolley? Let us know in the comments section and let us know in the comments section. How many people want to say bye-bye bears? Nothing in this video is financial advice and let's listen to Mr. Michael Sailor. Bitcoin is a rising tide that lifts all boats. There is no need to work yourself to death in the age of automation. Just get on the train.

1:03I mean that bear looks so flippant real. Water under the bridge with a capital Bitcoin B, let's go. Now. Bitcoin is a bridge that connects the physical and digital world. All the rich people in the world will want your Bitcoin. Yeah. Michael Sailor, I think we stolen food from Frog there from not mistaken. Loving this, loving these memes, these videos, keep on rocking it. And strategy says MSER has $52 billion of net reserve after debt and after preferred claims. That is a war chest that is an unassailable balance sheet.

2:03And do you realize what's going to happen during the bear during the bow market? Look what they did in the bear market. What's going to happen during the bow markets? Exciting times ahead, my friends. Joe says college football and a Bitcoin bow market. Gents, we are back. Let me know in the comments section. Are there any college football fans? I actually went to grad school at K-State University. That's Kansas State. Go wow cats. So that's my team. Love to hear yours. Let's go. Ron says there is no shot at a magical second bottom in this market. 16K is gone forever. 58K is gone forever. And here we are in this screenshot at 778. And I believe right now we're more like 798 as of the time that I'm recording this. But it's been a very flat weekend. We'll see how that plays out up or down. Nobody knows. Ben workman says the greatest opportunities belong to those who can see what something is becoming before the rest of the world can see beyond what is today.

3:04That is you, my friends, that are watching this video that are listening to this podcast. That is you. You can see what is beyond today. And you're going to reap the rewards as a result. It might not feel like it in the moment sometimes. But man, if you have a long term time horizon, the sky is the limit. And Jeff says Bitcoin is capital. The world just hasn't recognized it yet. Bitcoin option here says the five year performance of MSTR is 105% Tesla's 48% and Mr. will also help perform SpaceX and Tesla over the next few years. Get ready. And guess what Bitcoin option here? I am ready. Robyn says every time I see foreign currencies, I think to myself, why are they accepting this fake money? It's losing value so fast. And then I remember I do the same stupid thing with my own currency. I mean, look at this stuff. Absolute paper trash. James says I believe we are in Q1 of 2023. People didn't believe the bottom was in for Bitcoin until after SVB,

4:05that Silicon Valley bank crashed in March of 2023 when it produced a higher low. With the VIX at 14 and going into the midterms, maybe we need a high-volve event to repeat that. But either way, the bottom is in. And checkmate says bulls are always too married to their moon math thesis at the top to notice one is over. And believe me, a lot of us were there. We were a lot of us were there a couple years ago. He said I'm noticing many bears who remain married to their thesis of what the idealized Bitcoin bear market low has to look like. They missed the inflection points by several months as a result. So here's checkmate coming in and saying the bottom was in. Back in the high fifties, that was the bottom. That's what checkmate says. That's something that I'm going to have to say, you know what? I'm on board with that checkmate. I am on flip and board. And one thing I'm also on board with is let's try to not be too married to the moon math when the boom markets are raging.

5:06And three months, six months, 18 months, 24 months, whenever it's absolutely raging. Let's hope that we can still be some voice of reason at that time and say, you know what? Things are getting a little frothy here. I mean, the long term thesis is amazing, but this is a little frothy. And maybe we'll figure it out together. Maybe we won't. Time will tell. But I'll be here every day or almost every day. As many days as physically possible for me to deliver this content to you. So I hope you appreciate it. You can show your thanks with a comment, with a like, with anything that you just feel like would make, you know, this video get out to more people who are looking to learn about Michael Seller, about strategy, about Bitcoin Treasury companies. Enjoy the sponsor, enjoy the clip of Michael Seller. Just enjoy. Quick pause because this might matter more than your next Bitcoin move. Your personal data is being bought and sold online right now. Emails, phone numbers, home addresses, even family connections, all floating across hundreds

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7:09They can't harm you if they can't find you. Take your personal data back with in Cogni. Use code MSTR for 60% off an annual plan at incogni.com slash MSTR. That's code MSTR for 60% off an annual plan at incogni.com slash MSTR. All right, this question comes from Sergio. Could strategy eventually build a 20 to $30 billion USD reserve, mainly through STRC to deploy aggressively during future bear markets, and could a larger cash buffer also strengthen the case for S&P 500 inclusion? I think we'll always carry large cash balances going forward. And over time, we expect the US dollar reserve balances to grow. We expect BTC reserves to grow. We expect the operating cash or US cash balance that's unrestricted to grow.

8:14And we will use that opportunistically to buy back our credit, buy back our stock, our buy back our debt, or buy Bitcoin whenever we think it makes sense. So the company's optionality is growing. And at this point, we would expect we'll just keep getting larger from here. And we will have more trading options than we've had in the past. And on the question around S&P inclusion, I mean, there's two different things. Here, one is S&P, the ratings. The second is S&P, the index. On the ratings, we currently have a B-corporate rating. I think increasing the cash reserve will help with that. Right. And could over time improve our rating. Ultimately, what will improve the rating is whether they deem Bitcoin as capital that we have in our balance sheet right now, they see it as not true capital. And it's rated as zero value.

9:16If that changes, then our rating will go up. And that's probably the most important thing, more important than having US dollars. Index inclusion, I don't think is directly correlated to the US dollars. And our reason on our balance sheet. Jerry asks, is the focus permanently on Bitcoin per share accretion via financing, or could opportunistic spot purchases play a larger role in supporting liquidity and price discovery going forward? Our primary focus is to create digital credit that strips a large portion of the volatility off of Bitcoin and extracts a yield. So that's STRC. We're not really traders. We think that that market, which is the digital credit market right now is about $15 billion. We think it can become $100 billion, then $200 billion, then $400 billion, then a trillion.

10:16So the business of the company is to create the credit. The trade that we're making is we're willing to bet that Bitcoin will outperform our hurdle rate. Right now our hurdle rate is 10.5% or something we updated on our website every 15 seconds. The duration of the company, the duration is like 33 years. And so the business of the company is we're sort of betting some time over the next 10 to 30 years that we're right. Right? And we're not really traders from day to day. The reason you should buy the equity is not because we trade Bitcoin. If you really think that you found someone that can trade Bitcoin really well, you should invest in their private fund. The reason you should buy the equity is because the company has $60 billion

11:17dollars a capital and can create five or 10 or $20 billion a year of credit. And if Bitcoin beats the hurdle rate, that means the company makes $20 billion a year. And if you want to own a company that makes $20 billion a year that can grow 30% a year, then we're that company. Right? So if you believe in digital credit, then you would look at it and say, okay, well, the company that can do that is very valuable. I think that as a practical matter, we will hold more cash. And if Bitcoin is trading at an extreme premium to the 200 week moving average, we'll probably tend to acquire cash rather than BTC when we sell credit. And if Bitcoin is trading at a low premium or a discount to the 200 week moving average, we probably lean toward a bit more BTC than cash. So I think that where Bitcoin is in the cycle, make it may drive our cash to BTC allocations.

12:17But ultimately, we're not traders. And I think what people oftentimes they miss is, I don't realize that in a bull market, our equity premiums expand. So demand for the equity expands. The equity premium expands. Demand for the credit expands. The credit risk on the credit falls. And so both the equity and the credit businesses explode. And capital flows to the company. So in a bull market when the Bitcoin price is rising or is high, we will tend to have a lot more capital come in the door. And therefore we'll buy a lot more Bitcoin because that's when the capital comes. And in a bear market when Bitcoin is crashing, the equity premiums compress and the credit weakens. And there is less demand for the credit. And there's less demand for the equity. And so we will tend to buy less Bitcoin in a weak Bitcoin market than in a strong market. But at the end of the day,

13:19if we're selling the equity at a premium to the underlying Bitcoin, right, if Bitcoin rallies and we're selling the equity at a massive premium, the fact that we pay double when we sold the equity for triple, you know, isn't a problem. It was still a creative to the company. So the price of Bitcoin when we're swapping equity for Bitcoin doesn't matter. And the price of Bitcoin when we swap credit for Bitcoin only matters over the duration of the credit. So over a decade.