Bitcoin Market Volatility and Investment Strategies

There'll be a drop or a significant drop that comes along. Have we moved past that because

of the regulatory changes that have taken place? I think it'll remain volatile because it's a 24-7,

365 global asset. You can panic sell it on Saturday night. You can enthusiastically buy

it on Sunday morning. That's a feature. That's not a bug. You've lived through some of the swings,

but do you think we won't see the downturns like we've seen in the past just because of

changes? I think it's going to surge through the roof, and then it's going to surge to 180

and crash to 140, and people will be freaking out about it again. But let me make this one analogy.

Volatility is like fire, and some people run away from the fire, but Henry Ford put the fire

into a carriage via an engine, created an entire industry, and he gave humanity wings.

Can we talk about it? I've been leading up to you, for me, and for everybody to understand

your tweet just from, I think, in the last hour. So what'd you do last week with the

Treasury operations? You were able to generate a Bitcoin yield of 2.55% or over almost 10,000

Bitcoin to shareholders using an arbitrage. Can you explain it? Will I be able to understand this

if you explain this? We sold $1.5 billion worth of stock by $500 million worth of Bitcoin. We

bought back $1.5 billion of Bitcoin. We captured nearly a billion dollar gain in the arbitrage.

That we can do with equity day by day. When we do it with debt, we issue $3 billion of debt

that's backed by $600 million of Bitcoin that comes due in five years. We pay 0% interest.

We buy $3 billion of Bitcoin. We capture the $2.4 billion in the arbitrage gain up front.

But then over the course of the five years, we double or we quadruple the investment because

we're buying an asset which is appreciating faster than the asset. What you told me was

it's 55% premium over conversion but a zero coupon. Is that the same? That was a zero coupon

55. And you can do that because Bitcoin is high vol and the companies that have Bitcoin on their

balance sheet have even higher volatility. So Mara is a great example. Two weeks ago,

they did a billion dollar convert zero coupon to buy Bitcoin. This week, they're back in the

market doing another billion dollar convert zero coupon to buy Bitcoin. You can rinse and repeat

that frequently. Tell me what you think or told Microsoft that they should do and what are the

chances that happen? Microsoft is buying its own stock back. It's buying bonds. It's divvying out

cash flows. If they simply swept their existing cash into Bitcoin, it probably adds a trillion

to the market cap and $150 to the share price. If they converted the dividend into Bitcoin,

adds another $150 to the share price, another trillion to the market cap.

If they replace the buybacks with Bitcoin, instead of surrendering the capital,

they invest the capital, adds another trillion dollars and $150 to the share price. If they

just take a little bit of leverage, they basically take 10% leverage on a huge stack of Bitcoin,

they add another trillion. So what I'm saying is instead of surrendering the capital and then

leveraging up the company, right now Microsoft trades at 20 times forward expectations.

I'll say 95% of the enterprise value of Microsoft is based on expectations is the best way to say

it. That means it's very asset poor, it's expectation rich. Why don't you actually buy

assets and instead of being 95% on expectations, be 50% on expectations, de-risk the company,

grow the enterprise value and feed the digital economy of the future.

What was the response?

The shareholder meeting is December 10th. We'll find out.

What do you expect? Glazed eyes?

I don't have any illusions that mega corporations are going to immediately embrace Bitcoin.

But what I do think is it's going to become part of the conversation.

And there are about 120 companies that are public that are starting to hold Bitcoin right now.

There are a lot of Bitcoin standard companies like Mera, like Similar, like MetaPlanet,

like Rumble is getting into the business. And as they start to buy Bitcoin and issue

fixed income securities and equity securities, you're going to see demand increase.

So what inning are we in, do you think?

Sorry?

What inning? It feels like we're in like the second inning of all, or even maybe not even.

Yeah, I think we get into the third inning when we cross $100,000.

That's the third.

Right now, we're still early. I think that there's an extraordinary opportunity.

It's not a softball game. It might be a twilight doubleheader,

even. It might be or maybe 13 or 14 innings. Michael, thank you.

I'm going to go home and think some more. I think on this after you come in,

and then my head starts hurting, and then I give up.

Thank you, Joe.

You're welcome. I'd like to talk.