Michael Saylor's Mind Blowing Bitcoin Keynote at Cantor Crypto 2025: Why Wall Street is Going All In

Mr. Michael Sailor [applause] and what a year it's been. Um this is this is a very pivotal year I think in the in the formation of the digital assets industry. Uh you know they say

assets industry. Uh you know they say the the two most important days of your life are the day you're born and then the day you figure out why.

And I think the extraordinary thing that's happened over the past 12 months is I think a lot of us figured out why why are we in this industry and I'm uh

delighted to be with you today because I want to share uh my why. And my why is going to cover three pretty profound

topics. The formation of a new asset

topics. The formation of a new asset class called digital capital.

The formation of a new business model.

the dig digital treasury business model and the formation of a new asset class digital credit and I think 12 months ago

we we knew that uh digital assets were auspicious and we were all very bullish on Bitcoin but I really think the past 12 months have provided extraordinary

clarity about these three topics so first I'll talk about digital capital well I think the emerging consensus in the world over the past 12 months is

Bitcoin as digital capital. Uh there

were some pretty pivotal events. The red

sweep was a pivotal event. Uh the

appointment of 12 probitcoin cabinet members was a pivotal event. Uh when the president said we're going to be the superpower, the Bitcoin superpower, that

was a critical event. When David Sachs said Bitcoin is digital gold, a digital commodity, the global commodity.

uh on Mar it's March of 2025 when he went on television to assert that Bitcoin was special and recognized for its commodity status. That was a pivotal event.

Uh and we bandandy about you know this uh this phrase you know digital gold and people talk about is it just a store of value can be successful if it's only a

store of value. Well, there's a theme to that which is the bug is the feature.

And I think that the humbling epiphany of the past 12 months is every criticism and every bug in these asset classes in

this industry in in uh the treasury business model has turned out to be the feature. And here store of value means

feature. And here store of value means capital. Gold is store of value. And if

capital. Gold is store of value. And if

you are store of value and if you are digital gold and you emerge as digital capital, then that is a a profound

paradigm shift for the entire economic world. So why is Bitcoin digital

world. So why is Bitcoin digital capital? Well, the politicians say it's

capital? Well, the politicians say it's digital capital. The banks have embraced

digital capital. The banks have embraced it as digital capital. Now, we actually have we have JP Morgan expressing support for

the asset class. We have uh the head of Charles Schwab that's announced that they're going to custody Bitcoin.

They're going to let you trade it.

They're going to extend credit against it. Uh they're going to let you deposit

it. Uh they're going to let you deposit it and withdraw it in the first half of 2026.

Uh that's extraordinary. So, uh, what you see now is I 12 months ago, I couldn't get a loan against any kind

of, uh, Bitcoin uh, posted as collateral from any major bank in the United States. Right now, um, Bitcoin is

States. Right now, um, Bitcoin is creditworthy collateral at Meil Lynch, at JP Morgan, at Charles

Schwab, at Texas Capital Bank, at BNY Melon, at Wells Fargo, and uh, at PNC.

And so there's probably a few that I've I've uh, skipped. I think city has just announced that they're going to start the custody and uh and bank Bitcoin the

first half of next year. So we have we have basically progress through the unthinkable. We've gone from a um a

unthinkable. We've gone from a um a toxic ass asset class that the administration was against and the banking industry did not acknowledge to

an emerging asset class that's getting the grudging respect of half of the major banks in the United States and it's spreading like wildfire and you

know you these are the most conservative riskadverse organizations in the world and if they go and do a 180 in just 12 months that's pretty extraord-

extraordinary and if if half of them embrace this asset within 36 months I think that's light speed. [snorts] So

you've seen the banks embracing Bitcoin.

Now you're seeing Wall Street. Uh of

course we all know the story of the success of IBIT the most successful ETF in the history of Wall Street. Uh

[sighs] I've tracked it pretty closely.

What's interesting of course is it went from nothing to about a hundred billion dollars in less than two years. But also

if you look at the emergence of the derivatives market on top of IBIT, it went from nothing to 10 billion to $50 billion. Uh and if you look at the

billion. Uh and if you look at the liquidity, it you know it went from nothing to trading three four to five billion dollars a day. Uh it's

really quite extraordinary. Um

public companies have embraced this asset. Uh if it's going to be digital

asset. Uh if it's going to be digital capital, someone's got to be willing to capitalize on it. There was one company that capitalized on it in the summer of 2020 and then there was two and then

there was three and then we thought that was kind of cool and then there were 20 and 30. There were maybe uh 30 30 at the

and 30. There were maybe uh 30 30 at the beginning uh the middle of 24, 60 toward the end of the year and we've gone from

60 to more than 200 in the year 2025.

uh 200 publicly listed companies up from you know 60 in 12 months is a is quite a bit of progress in a single year. So

this is an extraordinary dynamic and of course the marketplace itself right what we see is 700 million crypto believers cryp the crypto industry tipped the election last year it's

becoming the most powerful if not the most powerful political movement in the country and it's global phenomena and uh if you're going to be global digital

capital then you probably want to rest on uh liquidity so you're staring at $60 billion a day of liquidity, but on Friday, I think we had a hundred billion dollars trading. So, it's a it's an

dollars trading. So, it's a it's an emerging powerful asset.

It's electrically powerful. It's

computationally powerful. It's

economically powerful and it's politically powerful. And it's never

politically powerful. And it's never been more powerful.

So, that observation, Bitcoin is digital capital is key. We are capitalist. the

capital assets of the 20th century, equity capital, real estate capital, uh creditbased capital. Um most of the

creditbased capital. Um most of the world thinks private equity, public equity and real estate is primary capital. The emergence of digital

capital. The emergence of digital capital is pretty profound because it represents an alternative to people who who uh don't perhaps want to store all

their wealth in real estate. There's, as

I've said before, there's really no real estate in Africa you probably want to put your family savings into for the next hundred years. Uh there there are lots of parts of the world where people

just don't want to um to store their economic energy for long periods of time. So the emergence of digital

time. So the emergence of digital capital is a global phenomena. It's also

a political phenomena. It's also a technical phenomena. And of course, if

technical phenomena. And of course, if you pair the emergence of digital capital with the emergence of digital intelligence, you can imagine that in a world with a billion AIs talking to a

billion AIs a billion times a minute, they're not going to have a a lot of patience for 20th century ways of doing things. They're not going to buy sports

things. They're not going to buy sports teams. They're not going to buy fiat sovereign debt capital. They're not

going to store their money in cash.

They're not going to trade gold. They're

not going to want to store their capital and buildings or crossrade commercial real estate. They're certainly not going

real estate. They're certainly not going to be comfortable with securities and all of the all of the human and legal and political restrictions that come

with them. So, the emergence of digital

with them. So, the emergence of digital capital at the same time as we have an emergence of digital intelligence is uh it maybe it's a coincidence, but maybe

it isn't a coincidence. Maybe it's an inevitability.

So the second uh point I want to focus on is the emergence of the of the treasury model of a digital treasury model. What is it? A a treasury company

model. What is it? A a treasury company is a company that sells securities to buy a commodity that it then capitalizes on and then issues credit against the

commodity. So if you cap if you sell

commodity. So if you cap if you sell securities, raise capital, and then issue credit against the capital, you've created a treasury company. Um there

traditionally haven't been a lot of treasury companies because the SEC 40 act prohibited publicly traded companies in the United States from capitalizing on securities portfolios.

Everything that I'm going to describe you could do with the S&P index or a portfolio of magnificent seven stock except for the fact that regulations in 1940 put in place by the United States

make it illegal. And so because you could never have more than 40% of your liquid assets sitting in securities, you find uh Warren Buffett's got to

continually trim his position in Apple stock. He's got to sell his securities.

stock. He's got to sell his securities.

he's always got to keep 60% or more of his liquid assets in treasury bills. And

it turns out that most of these mathematical methods don't make any sense if you're using uh sovereign debt as your capital asset for economic reasons.

So we inadvertently discovered a new business model. There's insurance

business model. There's insurance companies, there's banks, there's all sorts of business models. This is a treasury business model. And how does it work? We sell equity, we sell credit, we

work? We sell equity, we sell credit, we sweep cash flows, we buy Bitcoin. We've

done it 85 times.

Uh and uh we found oursel with about 3.1% of all the Bitcoin in the world. We

spent 48 billion to buy it. Uh it

changes value every day, plus or minus a few billion dollars. Doesn't bother me.

It bothers other people. I

I rather like it. I enjoy it. Um,

we've gone from an irrelevant company to the fifth largest treasury in the S&P index. You can see the chart. We'll be

index. You can see the chart. We'll be

the number two in the next 12 to 24 months. I expect we'll be the number one

months. I expect we'll be the number one in 4 to 8 years. There's only one company on this chart other than ours that has a practice of accumulating capital and that's Bergkshire Hathway.

Every other company on this chart has a practice of surrendering capital. And so

one of the big ideas in the treasury model is instead of surrendering capital enthusiastically as fast as you can and bragging about it, you might want to

keep the capital. Every big bank, every time they have a good quarter, they increase their dividend, increase their buyback as though that's an accomplishment.

Every big tech company increases their dividend, increases their buyback as though it's an accomplishment.

It's not an accomplishment to surrender your money, right? If you walked into your dining room on Thanksgiving and told your family that your idea to improve the family was, you're going to

give away all the family's money. That

way, we won't have a volatile balance sheet. It's not good for the family,

sheet. It's not good for the family, right? I I think intuitively you know

right? I I think intuitively you know that it's not a good idea for you to give away your money and you know it's a good idea for your family to give away your money. But somehow

your money. But somehow somewhere along the line the conventional wisdom in corporate finance is that money is toxic, capital is bad and and the most shareholder friendly

thing you can do is decapitalize the company by throwing all the money out.

Now, of course, the irony is the bestrun companies in the world are in the business of getting rid of money, and that leaves the investors to figure out what to do with the money that's being surrendered by the well-run companies.

And there there's a certain irony to it all. Uh it comes about because they're

all. Uh it comes about because they're all capitalized on the wrong asset.

You can see here, uh in the last five years, the cost of capital is 14%. It's

the S&P index. Turns out the gold is tracking it. You have, you know, you

tracking it. You have, you know, you have two interesting capital assets.

Metallic capital, gold, equity capital, the S&P index, 14%. That's your hurdle rate. Money markets pay you 3%.

rate. Money markets pay you 3%.

Therefore, you're destroying 11% of your uh treasury assets every year that you hold. Money markets. Bonds are minus 4%.

hold. Money markets. Bonds are minus 4%.

That's how you bankrupt your bank. The

MAG7's double that number. Bitcoin's

double that number. our company

outperformed Bitcoin in the time frame.

If your company is capitalized on an asset which underperforms the S&P, then you're negatively polarized to capital.

You are you are it's toxic to you. So,

you're going to throw it away as the rational thing. If you're capitalized on

rational thing. If you're capitalized on a a product like Bitcoin that outperforms the S&P, you're positively polarized the capital. You attract

money. In fact, the more money you raise, the more profitable you become, the more shareholder value you create.

It's a very simple idea. Flip the

polarity from negative to positive, and then you just get stronger every single year, and you'll get more powerful. But

as you can see, right, the reason that you can't capitalize on the MAG 7 is the SEC 40 act. And you can't capitalize on the S&P index because the SEC 40 act. I

guess in theory, you could capitalize on gold. Interestingly enough, no public

gold. Interestingly enough, no public company has really done that. And the

point that I make to the gold bugs is even the gold miners don't do that. And

if the gold miners aren't doing that, then there must be an issue. I don't

know what the issue is. But what I do think is the general the general tendency of corporations is you throw away your money to the investors and the

investors buy the index and that's how they keep their economic wealth intact.

And that's good for the investor, right?

That's look that's why h Harvard endowment and Yale Yale and Harvard and all of these uh large institutions that's why they have a 500year life expectancy they just buy a capital asset

like real estate or equity and the reason that your favorite company lives for five or 10 or 15 years and goes bankrupt is because they don't have any assets.

Right? It's like again I've said before they're like type 1 diabetics. Right?

They can't store energy.

Bitcoin is insulin.

It's insulin to the type 1 diabetic.

Right? If you're a company, you need Bitcoin. It's like your insulin. All of

Bitcoin. It's like your insulin. All of

a sudden, you can store economic energy.

You're you're not doomed to decapize yourself. Our company's raised a lot of

yourself. Our company's raised a lot of money. We raised uh you know a ton of

money. We raised uh you know a ton of money via equity issuance, a lot of money by bonds and and in the last 12 months we've really rotated to raising

capital via preferred stocks and preferred credit instruments and and uh that has taken off.

Now um what is the treasury business model? What we're we're um really

model? What we're we're um really financial engineers, right? uh we engage in financial

right? uh we engage in financial structuring or or structuring of uh we're structured finance company if you

will and what you can see here is the raw asset is Bitcoin it's got a 51% ARR and a 43 V over the past 30 days if what

you wanted was that you could just buy it but what we've done is we stripped the volatility and the risk off of the asset. So we strip a bunch off with

asset. So we strip a bunch off with strike uh down to 29 then 18 then 15 and stretch we stripped it down to 8% in the

last 12 weeks. Stretch today it's targeted at 100. It traded between 96 cents and 107 and 107 cents but it's

down to trading plus or minus 4 cents or 5 cents. Uh if that trend continues the

5 cents. Uh if that trend continues the ball on on stretch will go to one or two. And so what we're really doing is

two. And so what we're really doing is stripping the volatility off of the pure economic asset. Where does the there's

economic asset. Where does the there's conservation of energy in the universe.

Where does the volatility go? It goes to the equity. If I actually convert 50% a

the equity. If I actually convert 50% a year performance into 11% performance, where's the extra performance go? Goes

to the equity. So what we're doing is fairly elementary. We're just stripping

fairly elementary. We're just stripping the performance and stripping the volatility and stripping the risk. And

the extra risk, the extra performance, the extra volatility goes to the equity.

And that that's why a business that has 70 billion in digital capital can create $3 billion of very very low volatility credit. Um

credit. Um it's not that different again to take a barrel of crude oil and you ex you know you take crude oil you if you distill it to the highest most distilled form you

have kerosene. Kerosene is jet fuel.

have kerosene. Kerosene is jet fuel.

Kerosene is rocket fuel. Now I'm going to make a a joke. If you study the history of science, it's full of examples of people that saw breakthrough

technology. Um, but they used the

technology. Um, but they used the technology the wrong way because they were conventional thinkers. Uh, the the

idiom is repaving cow paths. It's like

you invent concrete and you could create a six-lane superighway and the car could go 90 miles an hour. But instead, I take the concrete and then I put it over a

cow path that was meant for a cow that moves 4 miles an hour. And now I've got a paved cow path where cows can now move 4 and a half miles an hour. You got you got no benefit from the technology

because you used it the wrong way. Now

I'm going to give you an example here.

We invent John D. Rockefeller, you know, distills kerosene and you're in the horse and buggy business. So what do you do? Well, you

business. So what do you do? Well, you

create a kerosene lamp and you put a kerosene lamp in the back of the horse and buggy so that your customers can travel across the country by horse and buggy with a kerosene lamp and read a book.

Or you put a kerosene heater in the back of the horse and buggy and you brag that now you've got a warmed horse and buggy and you won't be cold while you're in the horse and buggy. But a dude like

Ford comes along and thinks, "Well, maybe we'll just create an automobile and we'll drive with gasoline." Or maybe Boeing comes along, creates an airplane and we just fly across the country. So,

there's a compelling thing to do with the kerosene like rockets and jets and there's gasoline and there's cars, but there's also the trivial application of

the technology which just makes the horse and buggy 1% better. And yet

you'll have that the the greatest business people of the era made all their money with horse and buggies and they're going to grab the kerosene, put a kerosene lamp in the back of the buggy and they're going to declare that

they've used the technology for the good of their shareholders. And uh what I would say here is you just have to think different and you have to think much bigger with regard to what you can

accomplish here with this technique.

What we do is we accrete uh bitcoin per share, right? So, our equity investors

share, right? So, our equity investors want more Bitcoin per share. We started

with 56,000 Satoshi's a share, and we added every single year. We added about 74% more last year and 26% more this

year. Uh there's a lot of ways to do it.

year. Uh there's a lot of ways to do it.

You can sell equity, you can sell bonds, you can sell preferred stocks, you can uh you can sweep cash flows.

This is a a snapshot of the company's balance sheet. In essence, we're 1.1

balance sheet. In essence, we're 1.1 levered.

We're 1.3 times amplified and we have 84 years of dividend. Um,

you know, when Lehman got in trouble, they were 30x levered and then they went to 50x lever. At one point, they had 15 billion of equity and $750 billion of

assets. Right? So I, you know, I get

assets. Right? So I, you know, I get preached to a lot by finance bros that want to tell me, don't get too levered, but what I want to point out is we're not even 2x levered. We're, you know,

and literally the leverage is going to one that debt is going to go away. So

the interesting thing uh to do here, of course, is to use credit that is equity to amplify your performance because you can if you do that, you can do it

without credit risk. It's very

interesting. Um,

our future is in credit issuance, right?

What I said, you know, the day you were born and the day you figure out why why are we here? We're

here to sell digital credit. And and the product is the credit. And so, we just got a credit rating from the S&P. We're

the first uh digital treasury company to get a credit rating. It's pretty much the worst credit rating you could justify. We're starting at the bottom

justify. We're starting at the bottom and we're crawling up and it's predicated upon the Basel Accord which suggests that Bitcoin is worth zero.

It's zero capital. So you have a banking establishment that values Bitcoin as zero. But you have the marketplace that

zero. But you have the marketplace that thinks it's worth $70 billion. Over time

we will rectify that just like with uh with accounting standards we were able to rectify that and as that uh gets improved then our credit ratings will move up. But the significance of a B

move up. But the significance of a B credit rating is that instead of having access to 2.8 trillion worth of capital, you now have access to another 4.9

trillion. So we 3x the addressable

trillion. So we 3x the addressable market for credit instruments that we're selling. And the most important thing is

selling. And the most important thing is to is to allow fixed income investors and insurance companies to allocate to that part of their portfolio. So we

thought that was auspicious. Our

ambition is just to continue and improve the credit rating until we're an investment grade issuer of credit.

And that takes me to the product, right? The product is digital credit,

right? The product is digital credit, right? Did it exist a year ago? No, we

right? Did it exist a year ago? No, we

invented it. Necessity is the mother of invention. Um, why did we invent digital

invention. Um, why did we invent digital credit? Because traditional bonds are

credit? Because traditional bonds are too risky. We tried traditional bonds.

too risky. We tried traditional bonds.

We tried assetbacked borrowing. Uh we

found we found that that either the bond market wasn't large enough or or wasn't stable enough. And pairing uh

stable enough. And pairing uh traditional short duration credit instruments like bonds with an asset like Bitcoin which is highly volatile creates a very dangerous situation where

you might get forced liquidated or you might uh you might get yourself into a credit crisis. That's not good for the

credit crisis. That's not good for the equity. And so over time, right, this is

equity. And so over time, right, this is the conundrum that every financer has, right? How do you go bankrupt? Uh you

right? How do you go bankrupt? Uh you

lend long, you borrow short, right? A

bank has overnight deposits and puts out 30-year money and then people want their deposits back and you can't call the loans and so you get a run on the bank.

You know, when Lehman went out of business, they were borrowing 700 billion dollars for 15 days and then they were invested in mortgage back securities and real estate for with a 5,

10, 20 year duration. So, obviously, you don't want to mismatch your durations.

If your goal is to buy an asset, what is Bitcoin? Bitcoin is a 10-year duration

Bitcoin? Bitcoin is a 10-year duration asset. If you're going to buy it, you a

asset. If you're going to buy it, you a normal time frame would be 10 years, 120 months. So, what you want is a duration

months. So, what you want is a duration on your liabilities that is comparable to that duration of Bitcoin. So, how do you get to 10year duration money? Um,

you can't deal with 5year loans. So, we

started thinking that what we'd like is to get 10 to 20 year duration. And the

way to get that is with uh preferred equity. And um so we so we went to the

equity. And um so we so we went to the market and we thought we're going to sell preferred equity and we found um that uh the market wants a higher dividend yield for preferred equity than

for bonds. And our first reaction was oh

for bonds. And our first reaction was oh that's bad. That's a bug. And then our

that's bad. That's a bug. And then our and then after a while we realized that's actually a feature. If we're

paying 200 basis points more than we thought we should pay then our credit just became the highest yielding credit in the world. And when you flip it from

a bug to a feature, then you start to see something different, which is the credit that we issued from 2020 to

2024 was tactical credit in order to in order to amplify the equity. We were

trying to the product was the equity and the credit was uh the was the tactic.

And what happened in the last 12 months is an inversion of the business model where we realize that the credit is the product and the equity is the afterthought. The the equity follows

afterthought. The the equity follows from the credit and the real product is what if I gave 10% dividend yield to a

billion people tax deferred and stripped the risk off it. Well, that's a product that's a product that would appeal to everybody. But maybe more interesting

everybody. But maybe more interesting may that might be the best product in the world.

Say that again. That might be the best product in the world. If you can give someone 600 to 800% of of uh additional yield over the risk-free rate in a

nonvolatile instrument in the currency of their choice, you've created maybe the perfect product because that's what everybody wants. And uh we tripped over

everybody wants. And uh we tripped over that. And um we started by doing a

that. And um we started by doing a convertible preferred strike. We

overcolateralized it. The effective

yield was nine, but we realized that it was going to be tax deferred. So the

actual adjusted yield goes to 19.7%.

Which is just off the charts.

And then we did uh we did another one, Strife, but and here I'm describing stride. Stride's the junior credit

stride. Stride's the junior credit instrument. The effective yield's 13%

instrument. The effective yield's 13% but it's a rock dividend which means you have tax deferral to it. So the actual effective tax equivalent yield is 21%.

Okay. It's the it's the crappiest thing in the credit stack. It's the lowest grade one. It's 4.2 times over

grade one. It's 4.2 times over collateralized. There's not an

collateralized. There's not an investment grade company that you can find that's four times over collateralized in the conventional traditional credit market. So we

actually have something which w which is thought to be junk bond or distressed debt but it's actually investment grade risk right once you start to study it.

And that's uh again a profound insight and a breakthrough. And so depending on how you look at it it's anywhere from two to three times better.

Then we created the senior instrument which is seven times over collateralized. It kind of sets the cost

collateralized. It kind of sets the cost capital and that's 9% effective yield and about a 14% tax equivalent yield.

And then we then we ran into a brick wall because we wanted to do some uh credit issuance in Japan and Europe and we were running into some impedance. And

so I thought what can we do in the US and we started thinking and we realized that what what we hadn't done is a monthly short duration money market instrument

and so a lot of people complain. and

they're like, "Well, we want monthly dividends and we don't want volatility and we want no principle uh no no principal variation." So, we started

principal variation." So, we started thinking, how can we do this? And we

used AI, we designed this product, Stretch, we took it public in July. It's

the biggest IPO of the year.

By the way, we've done five IPOs this year. Five, right? I don't think

year. Five, right? I don't think anybody's ever done five IPOs. I you

know the joke that I I made is is I came up with one billion idea one billion dollar idea in my life and then I spent 20 years trying to find the second billion dollar idea and I couldn't find

it and then from the point we found Bitcoin we found the second the third the fourth the fifth the sixth and we started finding billion-dollar ideas every eight weeks and that's that's what

happened when you combine digital capital with digital intelligence in the right world so this one came along in July high and uh it the idea is

basically you set the dividend every month and you try to stabilize the principle at 100 and um it was

wellreceived uh and then the the deal we did last week is we launched um a version of strife we launched a perpetual 10% yielding instrument in

euros in Europe and uh it was about 700 million US about 620 million and it right now it it has an effective yield

of 12.2% but a tax equivalent yield just south of 20% if you're a 37% taxpayer if you live in Florida. Um

[clears throat] this is how stretch has seasoned over the last 12 weeks. So what you can see is it it started at 90. We jacked the

dividend and then we took it up 25 basis points twice and then over the past eight days it locked in. Today it traded plus or minus 5 cents and it today if

you look at your quote it closed at $100 and 0 and it was traded with one penny spreads. Um and um you know what what we

spreads. Um and um you know what what we told the market is we're not going to sell it below a hundred. So pro if someone wants to offer it to you below 100, you should probably buy it because

we're going to get it to 100 and then we're not going to let it drift up above 100 either. So this is our most

100 either. So this is our most aggressive piece of financial engineering because what you see represented in stretch is us saying

we're going to strip 120 months of duration down to one month. We're going

to strip 50 V down to one if we can get there. We're about eight now, but

there. We're about eight now, but probably we're five or three in the next week or so. We're going to strip that to one. We're going to convert the basis

one. We're going to convert the basis currency from BTC to USD and take away the currency risk. We're going to take out the delta and we're going to

overcolateralize it five or six to one, which is the same as stripping away about 98% of the risk from the instrument. And then we're going to and

instrument. And then we're going to and we're going to hand that to you as a high yield bank account. And then we're going to take it public, give you a four-letter ticker, and let

you trade in and out of it in the market, right? And and uh

market, right? And and uh if there's a kerosene for Bitcoin, this is the kerosene. This is the jet fuel.

Um this shows a picture of our of our digital credit stack over the past uh 12 months.

You can see when I spoke here a year ago, none of this existed, right? What what caused this to exist? U

right? What what caused this to exist? U

necessity is the mother invention.

Opportunity in the form of capital and intelligence, not mine, AI, digital intelligence. I talk I argue with the AI

intelligence. I talk I argue with the AI and I fight with it and and we learn very very quickly and I can get answers that would take uh 37 accountants and

lawyers a month and I get the answer in 10 minutes and so I can iterate something like a hundred times faster with AI.

So the liquidity in these things has gone from 70 million to 180 million in a few weeks.

And let me uh let me try to illustrate this a different way. The preferred

stock market has normally been a garbage market. Most of these securities are

market. Most of these securities are garbage that they go into a portfolio and people wait to die.

They're sold via 144a transactions which means that it's illegal for the public to buy them unless you're a qualified investor. When they're sold that way,

investor. When they're sold that way, they trade 100,000 a day with a a bid ass spread that might be 300 basis points wide.

If you take one public, they trade a million a day.

The first set of digital credit instruments we created traded 20 million, 20x that. And then when we finally got it right with Stretch, it

trades a 100x that.

And this is 12 weeks old. So our goal here is to get this to a billion a day.

And it's a chicken in the egg thing.

Like why would I want to trade it? Well,

you know, if it's a if it's a heterogeneous low yielding instrument, there's no reason to buy it. There's no

reason to trade it. Um,

because these are perpetual, they're going to last forever. That

meant that we could put a shelf registration on them and we could and we could grow the AUM in the same way that you might grow a proprietary credit ETF.

And uh, that was always our vision for this.

Now, we discovered that putting Bitcoin together with preferred stock, together with an IPO, together with a shelf registration was an innovation. But then

we tripped over this next point, which is we discovered that all the dividends that we pay out are tax-free for you, right? Tax deferred technically.

right? Tax deferred technically.

basically um the bug the bug was oh you're funding the dividends by selling equity and you don't have cash flows to fund the dividends well the fact that we fund the dividends with equity means

that it's return of capital which means that all the dividends become tax deferred and that means that you don't pay New York City tax you don't state say pay New York state tax you don't pay

federal tax uh you just get the dividend and the basis and the instrument is reduced and so A rock dividend is 0% effective tax rate until your basis goes

to zero.

Then it becomes like a qualified dividend, which is a long-term capital gains tax. And what it isn't is interest

gains tax. And what it isn't is interest income, which is what every bond would be and every money market or every bank credit instrument would be. Um,

we thought about it and then we, you know, first we thought, well, is this true for all the instruments? And then

we said, why is it true? And then it's true because we don't generate substantial earnings and profit E and P.

And then we thought, well, will it continue to be true? And then we thought, well, yeah, the credit's the product. This is going to be true

product. This is going to be true forever.

And so the business model is an interesting one. Uh it basically is a

interesting one. Uh it basically is a triple tax deferred business model once you understand it. And um so you sell

the credit, the credit creates the amplification on the equity and that's what actually creates the equity value.

The more credit you sell, the more Bitcoin per share you you create and that's how you outperform Bitcoin. And

the trick is people have known you could do this, but the trick is to do it without credit risk.

So, you know, if if I go and I borrow money for 12 months, then I've got a massive credit risk. Five-year money is a credit risk. But if you borrow the money with intention to never pay it

back, there's no credit risk. How do you borrow money with intention to never pay it back? You sell preferred equity. So,

it back? You sell preferred equity. So,

so I would love to tell you that I just sat down and and you know, and we invented this digital credit, but the truth is we stumbled upon it because we kept running into headaches. that we or

problems we wanted to solve and uh we started we created digital credit because we started with digital capital we started using Bitcoin as the

collateral asset and so most credits based on a depreciating asset and Bitcoin is appreciating asset. So if you build on top of an asset appreciating 10

20 30% a year the credit risk is falling exponentially. That's the first

exponentially. That's the first breakthrough.

The second breakthrough is it's transparent homogeneous risk. When you

have a credit instrument based on 87,000 home loans, you've got heterogeneous risk. You got discrete risk. You know,

risk. You got discrete risk. You know,

you might have uh hurricane risk. You

might have fire risk. You might have political risk. Corporate credit,

political risk. Corporate credit, sovereign credit, bank credit, they all have opaque, heterogeneous, discrete risk. But on the other end, Bitcoin's

risk. But on the other end, Bitcoin's transparent, homogeneous, continuous. On

our website, we update the credit model every 15 seconds, right? You can literally go plug in the

right? You can literally go plug in the price of Bitcoin, your volatility forecast, your performance forecast, anything, and you can get the credit

model to spit out in seconds. And that's

that's a breakthrough. You cannot do that with mortgage back securities. You

can't do with junk bond portfolios. You

can't do it with any kind of commercial real estate portfolio.

The third big innovation is digital credit. Uh or sorry in this particular

credit. Uh or sorry in this particular case it's it's digital credit is based on equity not based on debt. Right? Bank

credit is bank deposits are liabilities.

Uh the bank has to give back the money.

Uh and they're the worst type of liabilities because they're overnight liabilities. You have to give back the

liabilities. You have to give back the money on demand tomorrow or today.

Whereas debt is a liability that you got to give back. you got to get back the money in one, two, three, four, five years. The normal duration of corporate

years. The normal duration of corporate debt is like four years. So, it's

fouryear money. But preferred equity isn't a liability at all on the balance sheet. It's an asset. It's an equity

sheet. It's an asset. It's an equity instrument. It doesn't create it doesn't

instrument. It doesn't create it doesn't amplify the risk. It mitigates the risk.

So, if you've raised $10 billion of preferred equity, you're never giving it back. There's no $10 billion principal

back. There's no $10 billion principal refinance risk. You've got a dividend,

refinance risk. You've got a dividend, but the dividend is a shock absorber because because literally the definition preferred equity is the company's board

of directors can't approve the dividend if it would put the company in peril.

And so when you're actually funding with preferred equity, you're putting an asset on the balance sheet, a mezzanine equity asset. It mitigates the risk. And

equity asset. It mitigates the risk. And

if you and then of course not all preferred equity is equal. You could

have a refinance or a put obligation embedded in the preferred equity would make it shorter duration. But if you make it perpetual preferred equity, then

the capital is permanent.

And if it's permanent, that means you're not going to have any credit default event. Not in five years, not in 50

event. Not in five years, not in 50 years. And um [clears throat] those are

years. And um [clears throat] those are all reasons why you might want to do that. But of course, the next thing to

that. But of course, the next thing to do is take it public. And so most most credit, if you think about private credit, it's illquid. It's unbranded.

It's local. It's difficult to access.

But public credit, liquid, it's liquid. It's STRC. It's

stretch. It's got a name. It's stride.

ST strD. It's got a name. It's global.

It's branded. You advertise it. Friends

tell their friends about it. People go

tell their mothers, their fathers, their sisters, their workout partners, you should buy some of this. It's easy to access. There are four credit

access. There are four credit instruments you can buy on Robin Hood.

They're STRF, STRC, STRD, STRK. There

are credit instruments. So, this idea that you want to actually take it public is a big idea. Now, how do we learn that? Well, we learned it by watching

that? Well, we learned it by watching our own convertible bonds not trade in the market. We had equity trading four

the market. We had equity trading four billion a day and we had convertible bonds not trading for three days and it occurred to us that there's something not right about that market and we

wanted to fix it and the way you fix it is you take the things public and um then the other point that I make is digital credit is better because if

you buy $100 million of digital credit we can sell it to you in 30 seconds and we can create it. We create the backend collateral for the credit in real time.

So if we get a billion dollars of credit orders, we create the billion dollars of collateral and we stay synchronized.

You can't create a billion dollars worth of home mortgages overnight. You can't

create a billion dollars worth of commercial loans overnight. So you

cannot create conventional credit and synchronize it in the same way that you can create digital credit. That's why,

you know, banks have, you know, 50s story buildings and 27,000 employees.

We can create billions of dollars of credit with six people. We can, it can be a billion, it could be 10 billion, it could be 100red billion, it can be a trillion, still the same six people.

It's extremely efficient, instant, automated.

And when you put all that together with the last observation which is it's tax deferred income. This is how you go from

deferred income. This is how you go from a 2 or 3% yield to a 20% yield. Right?

Those are the innovations that make digital credit.

And here you know the fortunate happen stance is we just discovered the Bitcoin treasury model. The treasury model is just triple

model. The treasury model is just triple tax deferred. We raise billions of

tax deferred. We raise billions of dollars of capital by issuing securities that's tax deferred. We we generate billions or tens of billions of dollars

of income through appreciation of the asset tax deferred and then we can pay billions of dollars of dividends as return of capital tax deferred rinse and

repeat.

I would say that we have inadvertently created the most the most scalable taxefficient fixed income generator in the world. The digital treasury model is

the world. The digital treasury model is the most taxefficient generator of fixed income. If your goal is to generate

income. If your goal is to generate large amounts of after tax or tax deferred fixed income for and by the way, who would want that? Like

everybody. If that's your goal, then this is the way to do it. Um

there there's no other company's going to tell you they could generate hundred billion dollars of dividends tax deferred as rock dividends. They can't

do it. If you look at the entire structure, uh, return of capital dividends, um, they they've been utilized, but normally by pipeline companies and real estate companies and

oil and gas companies, and they're basically using depreciation credits in order to get to negative EMP and you

cannot, maybe you can pay 3% dividends and maybe you can pay 3% against a very fixed amount of physical capital, but there's no way to grow to pay 10%

dividends and to grow the business 20 30 50% a year because the physical capital won't support it. The depreciation won't support it. So to do what we're doing at

support it. So to do what we're doing at the scale we're doing and grow the way we're doing it has to be digital.

So what is it we are? We're basically a digital credit factory. The way to think of it is credit investors want US dollar yield and then equity investors want BTC

yield. So, we're doing a perpetual swap.

yield. So, we're doing a perpetual swap.

We're swapping. I'm going to give you 10% US dollar yield forever, and I'm going to take back the Bitcoin, which is a X% BTC yield forever. And since the

equity investors want the Bitcoin per share, and then the credit investors want the yield, everybody gets what they want. Uh, and because we do it with

want. Uh, and because we do it with preferred equity, we do it without credit risk. And so, if you've studied

credit risk. And so, if you've studied the swaps market, you can see what's going on here. Now, we just started doing it in euros. So, obviously half

the world wants to use dollars, but there's a big market for euro yield.

There's a big market for JPY yield. Um,

and so you can apply this pretty much in any currency. How important is it to pay

any currency. How important is it to pay rock dividends? Um, well, if I take a

rock dividends? Um, well, if I take a hundred bucks and I re and I pay 10% dividends on $100 and your tax rate's

50%. You have $164 after a decade. But

50%. You have $164 after a decade. But

you can see that when that tax rate goes to 37%, you're 14% up. When they become qualified dividend distributions, you've

got 35% more money. And if you got rock dividends, you've got 64% more money. So

it's pretty substantial to any retail investor or small business.

So what are the digital credit opportunities?

Well, this is stretch yield versus other credit instruments. And what you see

credit instruments. And what you see here is that even if you don't pay taxes, um stretch is twice as good as most everything else. And if you're if you're

everything else. And if you're if you're a taxpayer in Miami Beach, it would be four times better than your money market.

And uh, of course, if you your bank's going to pay you 40 basis points, but I'm going to assume you're smart enough to move your capital into a money market and paid get paid 400 basis points. But

ultimately, the best thing going is private credit, which is going to be that illquid opaque idea. And this is going to be much better than that. And

this is again trading plus or minus a few cents right now. Now, to make this a little bit more uh personal, I've actually calculated the tax equivalent

yield in New York City for you that live in New York City. It's it's 21.8%.

So, stretches a bank account that pays you nearly 22% tax equivalent yield. If

you're a New Yorker, it's about 21% in LA or San Francisco.

If you live in Miami, it's 16%. But if

you're saying or you're asking why would I want digital credit? I think the chart's illustrating why you're going to want digital credit. This is that story

in Europe, right? Stream is a 12.2% effective yield. The money markets are

effective yield. The money markets are 1.5%.

A 10-year Euro credit instrument is 2.6.

So, you're talking about 1,000 basis points more than the 10-year index in Europe. You could fund in euros by

Europe. You could fund in euros by stream and capture a 10% carry trade, right? Who's going to do that? Well, I I

right? Who's going to do that? Well, I I think a lot of people are going to do that once here. You have to come to two conclusions. You have to decide

conclusions. You have to decide Bitcoin's not going to zero tomorrow forever. Do you trust Bitcoin? And then

forever. Do you trust Bitcoin? And then

you have to trust the company strategy, right? So if you trust the issuer and

right? So if you trust the issuer and you trust Bitcoin, then this is like free money, right? And it's staring at you if you want the carry trade of carry trades. This is the tax equivalent yield

trades. This is the tax equivalent yield in the major cities in Europe, you know, 23% in Vienna, right? And and and I put the money market fund over there for

reference, just so you see the status quo is the little green dot on the right side. And this is what the digital

side. And this is what the digital economy is going to bring to Europe over time. Um the summary of all this, right,

time. Um the summary of all this, right, I mean the message is digital credit's just superior. It's superior to

just superior. It's superior to corporate credit, conventional credit, mortgage back credit. The credit's a $300 trillion market.

As as people start to think, well, maybe I'd like to get double, triple, or quadruple, you're going to see 1 2 3 4% of that market change.

This is a snapshot of the risk-free rate in every currency in the world. And what

you can see is the US dollar is the highest risk-free rate.

But you know, you float over here to Europe, you're 1.9 1.8%, and Singapore, it's 1.4% and Japan, you're 50 basis points. In

Switzerland, you're minus 40 basis points or something like that. So what

is the idea with digital credit? It's

very simple. You sell a treasury credit instrument, you convert it into currency of choice, you strip the ball off of it, and you hand someone 600 basis points or

800 basis points more than the risk-free rate, right? What what is the ideal

rate, right? What what is the ideal product? The product that is felt to be

product? The product that is felt to be useful by by the people of the world.

Okay. Well, what do people find to have value? Well, there's a word in the

value? Well, there's a word in the English language for something that everybody finds valuable. It's called

money. That's the word, right? If you

actually generate 600 or 800 basis points of additional yield in the currency of choice, you have created the perfect product. What is the perfect

perfect product. What is the perfect product? It's the product that someone

product? It's the product that someone is deaf, dumb, blind, and a coma yet unborn would still find valuable.

Right? I thought the iPhone was the perfect perfect product at a point, but I'm on the iPhone 17 Pro Max.

There's 35 versions there. we're going

to be the iPhone 137 by the time your grandchildren are born. But you put something like this in a portfolio, it's going to work for them whether they know

it or not. So, I'll just end with this, right? What are the what have we done?

right? What are the what have we done?

Well, we've created an equity and if you want enhanced exposure to digital capital and digital credit, you buy the equity. That's how you get the amplified

equity. That's how you get the amplified roller coaster. And if you're the equity

roller coaster. And if you're the equity investor and you want you want that kind of amplification, you buy it. If you

don't trust anybody, if you want no counterparty risk to a company or to or no currency risk, buy Bitcoin. Bitcoin

is the index on the crypto economy. What

does that mean? It's the index on the free market economy. If you want to buy the free market capital index, you just buy Bitcoin. It is the risk-free rate

buy Bitcoin. It is the risk-free rate for a people person that believes in digital assets and the digital economy.

If you want to have your cake and eat it too, you buy something like Strike, a convertible preferred. It gives you a

convertible preferred. It gives you a guaranteed dividend, some portion of upside, consistent income, and principal protection. If you want to maximize cash

protection. If you want to maximize cash flow, you buy one of the high yield instruments like STD.

You know, it's 13% tax deferred. Um,

if you don't quite trust the company and you want to make sure that you've got some investor protection and some penalty if they try to skip a dividend, you buy the senior instrument like

Strife or Stream. And if you if you simply want to strip all the volatility away and just get something much better than your bank or your money market, you would buy the Treasury Credit

Instrument. Now, um, if you're not sure

Instrument. Now, um, if you're not sure what you want right now, I will tell you what you want. What you want is you want this treasury instrument that is

basically a high yield bank account. You

want to be paid 10.5% with the tax deferred for the next 10 years, right? When you change your mind, you

right? When you change your mind, you sell it for the same price you bought it and you go do something that gets you something better. But um you know, at

something better. But um you know, at the end of the day, I've got I know a lot of Bitcoin maxis, a lot of Bitcoin believers. A lot of there aren't very

believers. A lot of there aren't very many of them that would say, "I'm going to actually put all the money I need to pay my kids tuition in the fall into

Bitcoin." They all have treasuries. They

Bitcoin." They all have treasuries. They

all have near-term obligations. And if

your choice is to get 30% ARR with more than 30 V or to get 10% tax deferred with no volatility, there's a lot of

people that would put some portion of their money into that no volatility 10% guarantee. You know, it's pretty

guarantee. You know, it's pretty compelling, especially if you can borrow the money at four and you can get into the carry trade. So, um, with that, I

would thank you for your time and I would just say I I think if you're a finance here and you're an investor and you think really hard right now, what

I've shared has implications for every company that has digital assets on its balance sheet. It has investors for all

balance sheet. It has investors for all implications for equity investors. It

has implications for credit investors.

And the only thing I would say is it's worth thinking hard about.

We say Bitcoin takes a 100 hours to understand.

Uh that's a 15-second ad.

It doesn't take even a 100 seconds to understand. Oh, a bank account that pays

understand. Oh, a bank account that pays me 10% and I don't get taxed on it.

Right? That's that's like, oh, too good to be true. What's the catch? But what

you know, just like a lot of people don't want to play with fire or explosives, they all would like a car with an automatic transmission that's

got fire and an ignition inside it that will take them here. So we are now on the verge of being able to create some wonderful financial instruments that

will appeal not to the crypto maxis or the or the innovators or the tech investors. It's, you know, the mission

investors. It's, you know, the mission is give a billion people 10% tax deferred, right, everywhere in the

world. And it's kind of cool in the US,

world. And it's kind of cool in the US, but if you live in Switzerland or or Japan and you're getting 50 basis points or less, there's the difference between

nothing and 10% return on your capital.

It's a it's a revolution in finance. And

I think in the last 12 months, my eyes have been opened and I realize that our mission is to go and and digitally transform the entire credit marketplace,

which means the banking industry and all of finance and we can do it everywhere in the world on a strong Bitcoinbased foundation. Thank you.

foundation. Thank you.

[applause]