Welcome to the year 2045. Digital assets traverse the digital realm at breakneck speed, with AI agents interacting millions of times every second, all anchored by bitcoin as the foundational currency. Bitcoin has transformed into a staggering $200 trillion asset class, serving as the settlement layer in this new AI Age of the Internet.
This vision for widespread bitcoin adoption is championed by a prominent advocate who has taken significant strides in corporate treasury management involving bitcoin, successfully revitalizing a struggling software firm into a Nasdaq-listed giant valued at $85 billion through strategic bitcoin investments.
In a recent extensive conversation with this notable figure, known for being Bitcoin’s staunchest supporter, insights were shared regarding the blueprint for global bitcoin supremacy.
Following the election of Donald Trump, bitcoin has demonstrated a 26% appreciation, reaching a market capitalization of $2.1 trillion and achieving a historic peak of $109,000 in January. The firm’s stock has thrived as a Wall Street surrogate for bitcoin, boasting roughly 50% growth, despite a recent dip of about 30% from last November’s high amidst broader declines in U.S. equities, the 10-year Treasury yield, and oil prices.
The U.S. has shifted from a stance of regulatory enforcement against crypto and subtly restricting digital asset firms—termed “Operation Chokepoint 2.0”—to announcing a commitment to becoming a bitcoin superpower and the global hub for cryptocurrency. This transformative change suggests that previously reluctant governments and traditional institutional investors are now showing interest in digital assets.
He stated that he is receiving invitations to speak at prestigious events: from gatherings of South America’s wealthiest families to Middle Eastern sovereign wealth funds, and high-profile conferences by major financial firms and even at the White House. He is transitioning from encouraging businesses to adopt bitcoin treasuries to advising nations on setting up strategic bitcoin reserves.
According to him, bitcoin has achieved “escape velocity” because once the U.S. government begins purchasing it in significant quantities, it will benefit the country and compel other nations to adopt bitcoin as their global capital.
“It becomes a fait accompli,” he articulated. “By embracing the network, you essentially compel all of your allies to adopt it first, followed by your adversaries.”
U.S. Bitcoin Strategic Reserve
The President’s executive order to create a U.S. Bitcoin Strategic Reserve marks a key step towards bitcoin’s envisioned destiny. The U.S. once possessed around 400,000 bitcoins but sold half of that for about $366 million, leading to significant financial loss for taxpayers estimated at $17 billion at current market prices.
This executive order mandates the Secretary of the Treasury to refrain from selling the nation’s bitcoin and to explore budget-neutral methods of accumulating more. It also calls for a digital asset stockpile to manage and adjust portfolios of seized cryptocurrencies as necessary.
During the recent White House Digital Assets Summit, he proposed that the U.S. should aim to acquire between 5% to 25% of the total bitcoin supply by 2035, potentially generating about $100 trillion in economic value by 2045.
In response to this proposal, an advisor to the Presidential Council of Advisers for Digital Assets expressed that the administration is eager to acquire as much bitcoin as possible and is examining various innovative options, including a proposal to leverage Federal Reserve earnings and gold certificates for bitcoin purchases.
As the U.S. opens its arms to bitcoin, banks around the world will likely follow suit.
“The floodgates have opened,” he declared. “Once bitcoin spreads… and there’s a trillion dollars of digital wealth within the banking infrastructure, it won’t be limited to just the U.S. It’s infectious. And that means thousands of banks with trillions in assets managed by billions of people.”
‘Thermodynamically Sound’ Money
The bitcoin advocate, originally from Lincoln, Nebraska, experienced a nomadic childhood on Air Force bases in the Midwest, Japan, and New Zealand. An Air Force scholarship helped him attend the Massachusetts Institute of Technology, where he earned degrees in aeronautics, astronautics, and the history of science—truly a rocket scientist, drawn to bitcoin’s “thermodynamically sound” architecture.
After service as an Air Force Reserve captain, he co-founded a software company in 1989 that thrived during the dot-com boom—but not without disruption, as he and two colleagues faced scrutiny in an accounting scandal in 2000 that resulted in a settlement of approximately $11 million with regulatory authorities.
Throughout his time at MicroStrategy, he registered over 48 patents and rolled out numerous business concepts; some flourished, while many faltered. Interestingly, he regards his greatest success as having stemmed from someone else’s innovation. During the pandemic lockdown, he discovered ‘digital gold’, a term coined by Bitcoin’s anonymous creator, Satoshi Nakamoto, and seized upon it out of necessity, preferring to allow his company a swift demise rather than a prolonged collapse.
In July 2020, his company began a rigorous pursuit of bitcoin, utilizing available cash flows, equity, and debt—essentially every avenue possible. It successfully weathered the 2021 crypto bull run and the subsequent downturn. By 2024, this corporate treasury approach had proven its mettle, with the company soaring from a $1 billion to a $100 billion valuation thanks to the surge in bitcoin values.
“Bitcoin turned into an opportunity,” he reminisced. “Then it evolved into a strategy, and within the last year, we recognized it had become a robust business model.”
From MicroStrategy to Strategy
The rebranded MicroStrategy, now calling itself “Strategy,” has become a highly sought-after stock for institutional investors looking for exposure to the unpredictable nature of bitcoin. In December, it was included in the Nasdaq 100 and is now eyeing membership in the S&P 500, which could usher in significant public market opportunities.
To maintain positive momentum, Strategy is focused on raising capital to expand its bitcoin holdings through a variety of fixed-income products, creating a marketplace of financial instruments that cater to traders who thrive on bitcoin’s volatility. By adjusting market conditions and recalibrating yield parameters, Strategy has developed “intelligent leverage” designed to draw in demand and create a cyclical reinforcement of financial products.
“Absolutely, it’s financial engineering,” he acknowledged. “This approach heightens the demand for bitcoin, which in turn elevates MSTR’s share price and increases leverage, ultimately inflating the value of options, bolstering demand for equity, and enhancing the appeal of convertible bonds and preferred shares.”
Through these engineering tactics, Strategy has amassed approximately $33 billion to secure half a billion bitcoins. However, this has sparked discussions regarding its capacity to provide dividends or meet bond commitments should the market conditions deteriorate or if acquiring new capital becomes challenging. Revenue from software operations has been minimal, amounting to negative figures from 2020 to 2023.
The enormity of this venture keeps him awake at night, hence, Strategy is exploring all available options.
“If equity markets offer us substantial premiums, we will divest,” he stated. “If our leverage becomes excessive, we will reduce it. And if capital markets become unfavorable for new sales, we will pause and reassess.”
Recently, Strategy surpassed 500,000 bitcoins, acquiring an additional 6,911 tokens for $584 million from the sale of its common stock. They disclosed a new perpetual offering that raised $711 million intended for further bitcoin purchases, surpassing its original goal of $500 million.
This round of preferred stock differs from previous offerings, featuring a higher interest rate (10% compared to 8%) and excluding a common share conversion option. The associated risk factors in the offering documentation indicate no obligation to disburse accumulated dividends “for any reason.”
Moreover, Strategy has adequately reduced its collateralized debts, thereby minimizing the risk associated with its bitcoin holdings.
“We’ve created a robust balance sheet. Bitcoin could plummet 99% in value, and we wouldn’t be facing a margin call. None of our instruments have bitcoin pledged as collateral,” he remarked.
Key dates to monitor are those when Strategy’s bonds come due. The first “put date” arrives on September 16, 2027. Should Strategy fail to incentivize bondholders to convert their bonds into stock or convince them to wait for principal repayment the following year, these bondholders could demand cash repayment for their $1.8 billion loan. A favorable market environment would certainly help raise the necessary capital for repayment. However, in the event of a market downturn, Strategy could find itself needing to sell bitcoin or facing default.
‘Economic immortality’
However, like the U.S. government, he asserts that Strategy will “never sell” its bitcoin. He’s committed to the notion that BTC prices will perpetually rise, embodying ideals of sovereignty, sound money, freedom, and property rights celebrated by the bitcoin community.
Before his passing, he contemplates burning bitcoin rather than distributing his assets, viewing it as a “more ethically sound form of charity” that ensures “economic immortality.”
“If I believe that and I burn those keys, then I enrich everyone in the [Bitcoin] network infinitely,” he stated. “We are all in this together, eternally. So indeed, that’s my legacy.”