Latest / Simply Bitcoin / Saylor Just Broke Bitcoin’s Golden Rule, Here's Why It's Genius! | Truth Block

Transcript

Saylor Just Broke Bitcoin’s Golden Rule, Here's Why It's Genius! | Truth Block · Simply Bitcoin

0:00
You do not sell your Bitcoin. Thank you.
0:03
For years Michael Saylor turned never sell your Bitcoin into
0:06
gospel, and this week on AQ1 earnings call he told the world
0:10
that Strategy is going to sell Bitcoin.
0:12
The media ran it like a confession and Bitcoin Twitter
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spiraled into civil war and almost no one stopped to look at
0:18
the math underneath. Today I'm going to show you why
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this controversial announcement is actually the most bullish
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thing strategy has ever announced and why the data
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behind it is confirming the Bitcoin super cycle.
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This is truth Block. I'm Hurley.
0:30
That's mind truth. OK, so let's be honest.
0:39
It's funny. The man stood on stage at
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Bitcoin 2022 crowd going absolutely wild and said you
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never sell your Bitcoin like it was carved in stone.
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He tweeted it a dozen times. He made it his thing and now
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he's selling. Next he's going to say there is
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a second best. The memes were immediate, they
0:57
were savage, and they were deserved.
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But here's where the laughing stops and the logic begins.
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Because the panic this week was about a headline, not a policy.
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No Bitcoin has been sold. Not a single SAT.
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This was a forward-looking announcement on AQ1 earnings
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call. And the actual policy, when you
1:13
read it, is the opposite of what the headlines would suggest.
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So what did Sailor actually say? Let's go right to the most
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important clip from the call. Strategy holds over 818,000
1:23
Bitcoin. That's roughly 3.9% of all the
1:25
Bitcoin that will ever exist. They bought their stack at an
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average cost north of $75,000 US.
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They've raised $8.5 billion through STRC alone in nine
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months. And on this call, Sailor
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introduced a new word for what he's about to do.
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Yeah, we'll probably sell some Bitcoin to fund a dividend just
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to inoculate the market, just to send the message that we did it.
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Look, the company's fine, the bitcoin's fine, The industry's
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fine. The world didn't come to an end.
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And if you're a short seller and your thesis is the company's got
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to sell equity in order to fund the dividends, I would like
2:01
nothing better than to, you know, rip your wings off.
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He's not describing a liquidation, he's describing A
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vaccination. Sell a tiny amount, prove the
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business survives and kill the narrative that strategy must
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dilute equity to pay its dividends.
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It's a reaction to the mainstream narrative from
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normies that strategy is trapped, that they have to keep
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selling stock and diluting shareholders just to keep the
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lights on. And what Sailor is saying is
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watch me fund this with Bitcoin instead, and then watch how much
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more I buy on the other side. And then he laid out the model
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in the simplest terms he's ever used.
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Sometimes we will sell a Bitcoin derivative because it's in the
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best interest of the company, but it's not necessary.
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This chart really illustrates that you can strip the business
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down to something very simple. You buy Bitcoin with credit, you
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let it appreciate and then you sell Bitcoin to pay the
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dividend. And as long as you're you're
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issuing credit and access of the break even point, then this
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business works and and grows forever.
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That's the whole model in about 30 seconds.
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Buy the Bitcoin with credit, let it appreciate and sell a tiny
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fraction to pay the dividend and the break even point. 2.3%
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annual Bitcoin appreciation. That's it.
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If Bitcoin grows more than 2.3% a year, strategy can fund its
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dividends forever without selling a single share of stock.
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They're not betting on a moon shot.
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They're betting on Bitcoin doing what it's done every single year
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of its existence. Now here's the part that got
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buried in all the noise. Strategy has roughly $2.2
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billion in unrealized tax losses from Bitcoin they bought above
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current prices. Selling those specific coins
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let's them harvest the losses, offset gains elsewhere, and
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lower their effective cost basis.
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Sailor called it, picking up $2.2 billion lying on the floor.
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That's definitely not panic selling.
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That's a guy who built an $8.5 billion capital machine in nine
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months optimizing his treasury. And then he dropped the mask
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entirely. But the bottom line is if
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Bitcoin, if, if macro, if the macro environment turns risk on
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and expands and Bitcoin rallies are equity rallies, it's go
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time. We're going to go and we're
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going to go with the credit like we're going to use the credit.
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Make no mistake about it. We want to see the M NAV, the
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the equity is undervalued. We want to see the M NAV expand
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to 2345 or 6. And it would.
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Nothing would make me happier than to RIP the faces off of all
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the skeptics and the shorts and drive the equity to the moon.
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That's the conviction underneath the strategy.
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He's not hedging, he's hunting. And right now we're in peak bear
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and short season now. Sailor's always been the
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showman. CEO Fong Lee sat down with Mark
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Moss and walked through the balance sheet in a way that
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makes the too good to be true objection very hard to sustain.
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And some numbers from this interview tell you who's
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actually buying this thing. According to Fong, STRC is 80%
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retail owned and the average position size is 1000 to
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$10,000. Most of these buyers likely
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don't know much about Bitcoin at all.
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They're just looking for the yield.
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They're on ramping to the Bitcoin ecosystem without ever
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understanding it. And Fong Lee thinks that's
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exactly the point. And this is the part I think
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people don't quite understand is behind the ability to pay that
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capital. We have $2.25 billion of cash
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that we put on our balance sheet to make people feel comfortable
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that there is an ability to pay the principal beyond just, you
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know, depreciation in Bitcoin, which is unrealized and issuing
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shares above a net asset value, right?
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So we have that. And then behind that, we have
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$60 billion worth of Bitcoin. So you ask yourself, am I going
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to get paid the principal right back?
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Well, we have literally $60 billion of Bitcoin on what is
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now about an $8 billion asset class, right?
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So I think you're pretty, at least at this point in time,
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pretty secure that we'll pay the principal back.
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And then are you going to pay 11 1/2 percent?
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Well, we have $2.25 billion, which at this point is about 18
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months worth of dividends. And beyond that we can also sell
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our Bitcoin if we need to, to pay the dividend.
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So there there's a, there's this idea that that that 11 1/2
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percent is too good to be true. What are the risk?
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The risks are fairly well disclosed, but we also have a,
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what I would call a pretty bulletproof balance sheet behind
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it, right? And and so you got to peel back
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that layers of the onion for sure.
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But when you peel it back, we're pretty transparent about what's
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behind it. So I don't think it's too good
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to be true. Yeah.
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And as you said, though, you could choose not to pay it, but
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that would sort of be the death of the company.
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Yeah, there, there are a lot of things we could choose.
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You know, companies pay dividends, they could choose not
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to pay it. But when they do that, then the
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stock price goes down, the equity value is down.
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Like why would we? The only reason we would choose
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not to pay it is if we're in some Black Swan.
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The world is ending. Bitcoin is exploding kind of a
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situation right when I tell people is what's you know, what
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would be that that situation if Bitcoin was to be draw down 90%
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and sit there for five years, there would be a situation where
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we will probably not pay the dividend, right.
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And if you think Bitcoin is going to go 9 down 90% and sit
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there for five years, that means you pretty much think Bitcoin is
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going to zero. It would have.
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To fail it. Would fail, it would go to zero.
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And if you think Bitcoin is going to fail, don't buy
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stretch, don't buy MSTR, don't buy Bitcoin, right?
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Like don't buy digital capital, don't buy digital securities
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equity, don't buy digital credit, right.
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And for those who think that, you know, we could argue till
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we're blue in the face, it's OK. You're, you're, you're welcome
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to have your views, but then you're also welcome not to buy
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any of our securities. So he's not hiding the risk,
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he's naming it. If you believe in Bitcoin, the
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balance sheet is bulletproof. Strategy has $60 billion of BTC
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backing an $8.5 billion instrument, plus 2.25 billion in
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cash that covers 18 months of dividends.
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But if you don't believe in Bitcoin, none of these numbers
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matter or will convince you. Then Fong Lee zoomed out 10
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years. And this is where Strategies
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ambition gets real. Now let's talk about 10 years
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out, 10 years out, we have a finance world that is fully you
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know, decentralized finance has eaten up traditional finance and
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Bitcoin becomes the digital reserve asset of the world,
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right? It'll be as important as AUS
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dollar. Governments around the world
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will be owning Bitcoin. They'll own gold, they'll own
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the US dollar and we'll be the largest holder of Bitcoin in the
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world That that's sort of the world I see in 10 years.
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And you know what's happened in the last two years And next year
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called the three years 20252627 we'll look upon as the most
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transformative time. It'll be the digital revolution,
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right? 10 years from now, people look
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back and and think it's just what do you think about the
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Internet today? You don't think about it, it, it
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is this this revolutionary product.
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You just think about it as its existence.
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The Internet is the Internet wasn't invented.
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It just is. People think about that about
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AI. 10 years from now, nobody will be debating whether AI is
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good or bad. AI will just exist. 10 years
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from now, people won't be debating is Bitcoin good?
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Is Bitcoin bad? It'll just exist like the US
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dollar. And if that's true, we'll be the
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largest holder of Bitcoin in the world, yeah.
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So here's why all the panic over strategy selling is so
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completely backwards. They're not getting smaller,
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they're getting bigger. They're selling a fraction to
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fund a dividend, buying multiples more through new
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issuance, and building a capital machine that accelerates the
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more Bitcoin appreciates. The selling headline misses the
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entire point, and there's actually a deeper irony here
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that I think the Bitcoin community should sit with for a
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second. Never sell your Bitcoin has
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turned into a kind of gospel. And I get it.
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Everyone, especially those under 60, should be saving in Bitcoin.
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But money that can never be spent isn't money.
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It's a relic. Nobody plans to die with their
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keys in a vault and their Bitcoin unspent.
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Or at least very few of us do. Bitcoin is peer-to-peer digital
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cash. It's both the world's best store
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of value and the world's best medium of exchange.
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The goal is to save more than you spend.
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But never using the network, never using Bitcoin as money
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defeats the whole purpose of money.
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Right now, every time you spend Bitcoin, you trigger a capital
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gains event. That's a real friction.
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Strategy is dealing with the same thing, except they're smart
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enough to use it in their favor with the tax loss harvesting.
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But if Bitcoin is ever going to function as money, people
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actually use capital gains on it have to go to zero.
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I do think that will happen eventually.
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You can't tax people for spending their money.
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And when that happens, one of the biggest never sell excuses
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will disappear entirely. Strategy using Bitcoin to fund
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STRC, deploying it as money to build the biggest digital credit
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product in history. That's not a betrayal of the
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thesis. That's the thesis working.
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We should actually want this. We should want Bitcoin being
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used as money. That's the whole point.
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OK, so that's the strategy story.
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The selling headline is noise, the math is actually bullish,
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the balance sheet is deep, and the capital machine is purpose
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built for exactly 1 kind of market.
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Which brings us to the bigger question.
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Are we in it because strategy didn't build this machine for a
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four year cycle? They built it for a structural
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bull and strategy is positioning like the Super cycle isn't
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inevitability. Sailors own words at Bitcoin
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2026 confirm it and Fondly's 10 year vision on Mark Moss
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confirms it. Everything about the evolved
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capital structure, the perpetual preferred equity, no duration,
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no maturity, no forced liquidation, all of it is
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designed for an asset that goes up structurally over time, not
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in a perfectly timed boom bust, but in a long grinding repricing
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of the hardest money ever created.
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And So what does the data say? I've been saying the four year
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Cycle is dead since 2025, and when October hit and Bitcoin
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topped at 126 K and then dumped over 50% over the following few
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months, it looked like the Cycle was right on schedule.
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The Cycle Bros definitely had their moment.
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And I get it when you say the cycle's dead and then the price
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drops 50% right on schedule. It's a rough look.
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But here's the interesting thing.
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Bitcoin doesn't recover like this in a bear market.
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A bear market doesn't see ETF inflows hold steady even during
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geopolitical tension and war. A cycle top doesn't see the
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largest corporate buyer in history accelerate purchases
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through the bottom. I'm convinced that what we went
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through was a mid cycle correction driven by macro,
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driven by deleveraging inside a larger structural bowl.
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Jordy Visser has been writing about what he calls the Bitcoin
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IPO moment. The idea that Bitcoin went
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through a massive distribution like founders cashing out after
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an IPO. And now that stage is over.
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The new buyer base, ETFs, retail institutions is structurally buy
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and hold. Here's what Visser said about
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the next breakout. Bitcoin kind of tells me that
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the next time it breaks higher this time if it does.
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When it does, whatever the case is, I don't think this one is
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going to stop as quickly. I think you're a lot of people
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that have been selling for a long period of time that have
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been moving out. And I know retail and ETFs are
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buy and hold and they're going to be raising their weightings.
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And so I've I've wrote a piece on this on the Bitcoin IPOI
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believe we've had a massive distribution of which makes
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sense. And I think eventually when the
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when it breaks higher this time, I don't think it's going to
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stop. The people who are always going
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to sell, the miners, the early adopters, the traders, they've
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sold. What's left is a buyer base that
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doesn't sell dips, it buys them. Now I want to be careful here.
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I'm not saying that the breakout is tomorrow.
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As of recording, we're back below 80 K.
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There are probably some longs to be liquidated in the 70K range
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before we start moving higher. As always, we have to have
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patience. But the structural alignment,
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the supply side, the demand side, the holder composition,
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all of it is pointing in the same direction.
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The four year cycle is dead. And that's where the two halves
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of this episode snapped together.
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Strategy didn't build a capital machine for a cycle.
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They built it for this. The selling headline, the
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evolved model, perpetual preferred equity funding,
13:42
Bitcoin accumulation at scale. None of it makes sense if
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Bitcoin is in a four year boom and bust trade.
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All of it makes sense if Bitcoin is repricing structurally over
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the next decade. Strategy and the Super cycle are
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the same bet and the data is starting to back it up.
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The stock dropped on the headline.
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Bitcoin has been mostly flat and that decoupling tells you
14:00
everything. The market hasn't processed this
14:02
yet, but it will. But here's what grounds all of
14:04
it. Bitcoin doesn't care about
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Michael Saylor. It doesn't care about
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strategies, balance sheet. It doesn't care about your cycle
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model or my super cycle thesis or whether the four year pattern
14:14
is dead or alive. Tomer Strolite put it perfectly
14:17
this week. He said this market can look
14:19
like a storm if you try to comprehend the whole thing.
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And it's hugely anarchic entirety, but there is a safe,
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calm and quiet eye of the storm, and that is simply holding
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Bitcoin in self custody. That's it.
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That's the floor underneath everything we talked about
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today. Sailor can sell, strategy can
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evolve, or it can die. The cycle can do whatever it
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wants. None of it changes the protocol.
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None of it changes that another block will be created in 10
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minutes. None of it changes 21 million.
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None of it changes the fact that if you hold your own keys, you
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hold the hardest money humanity has ever produced.
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So sit peacefully in the calm eye of the storm and live your
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life. All right, that's all I've got.
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But before we close, I wanted to hear from you.
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Is sailor selling Bitcoin bullish, bearish or something
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else entirely? And what's yourself custody set
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up? Are you in the eye of the storm?
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Let me know in the comments. And if you enjoyed this one,
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don't forget to hit the like button and share it with someone
15:11
who saw the headline and panicked.
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And of course, subscribe to simply Bitcoin if you haven't
15:14
already, so you don't miss what comes next.
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We'll see you next week.