Author|Coinage
Compilation| WuBlockchain
Market Reaction and Long-term Logic: In the Short Term It's a Voting Machine, in the Long Term It's a Weighing Machine
Zack Guzman: This sale of 32 bitcoins has garnered global attention. Facing various market reactions, what's the one point you most want to clarify?
Phong Le:There's an old Wall Street saying: 'In the short run, the market is a voting machine, but in the long run, it is a weighing machine.' We are not seeking votes on 'how we increase our bitcoin per share,' we are just transparently providing KPIs and a long-term perspective. There will always be short-term overreactions, but I don't spend much time scrolling through every comment on X (Twitter). We make decisions through the lens of daily, annual, and long-term perspectives, and the long-term lens is the most important.
Our focus is whether we continue to create value for different classes of shareholders, such as common stock shareholders, preferred shareholders, debt holders, etc., while also advancing the Bitcoin ecosystem itself. This isn't even our first time selling bitcoin; we sold about $2.5 million worth of bitcoin in 2022 and bought back later. This time we similarly sold 32 bitcoins (about $2.5 million), bought back about $100 million last week, and bought back about $1.5 billion the week before. We voluntarily disclose this information weekly through our 8-K filings. As the world's largest corporate holder of bitcoin, bearing both positive and negative market feedback is the responsibility that comes with our transparency.
Proving Liquidity to the Market: Debunking the "Death Spiral" Narrative
Zack Guzman: Some view this sale as 'inoculating' the market. Others compare you to Terra, worrying that STRC (Strategy Preferred Stock, i.e., the preferred share product Stretch), when leveraged by other DeFi protocols, could trigger a cascading sell-off 'death spiral.' Were these the concerns you heard before selling?
Phong Le: That was not a driving factor at all. We are not worried about DeFi protocols built on STRC causing a cascading collapse because about 80% of STRC is held by retail investors, and a significant portion by long-term holding institutions. The proportion held by DeFi protocols is very small, less than 10%.
When we talk about 'inoculating the market,' it mainly has two meanings: First, our debt holders (digital credit and bond holders) wanted confirmation that, given nearly 100% of our assets are bitcoin, we have the capability and willingness to use these assets if needed to pay dividends or for other purposes. At the same time, rating agencies want to see that we won't sell bitcoin arbitrarily. So we made a small sale once, to prove to creditors that we *can* sell, and to prove to rating agencies that we have discipline. Second, to test internal business processes. We disclosed custodian information but not specific bitcoin addresses. Once we move bitcoin from cold storage to a hot wallet, countless people in the market will be watching, trying to guess which wallets are ours. We wanted to see how the entire selling process operates in a real environment and the market's reaction. Hopefully, in the future, the market won't make a fuss when we sell a few million dollars worth of bitcoin.
Farewell to the Black Box: Michael Saylor and MicroStrategy's Decision-Making Mechanism
Zack Guzman: We've seen all sorts of experiments in the crypto space. Frankly, we've also reported on founders with highly concentrated power like SBF and Do Kwon. But MicroStrategy is different. How exactly was a decision like 'selling 32 bitcoins' made internally?
Phong Le: As a well-known Nasdaq-listed company, Michael Saylor no longer holds a majority stake. We have 8 board members, and we have common shareholders, preferred shareholders, and debt holders. To some extent, we are also responsible to the broader crypto community.
At a macro level, every quarter we discuss the 'optionality' of capital with the board in earnings calls—we can issue stock, preferred shares, convertible bonds, buy or sell bitcoin, or repurchase bonds. After reaching consensus at this level, we move to the execution layer. At a micro level, we run extremely complex financial models every month, analyzing the impact of different actions on equity quality and credit quality; every week, Michael and I discuss the week's goals; every morning, we confirm daily instructions with the treasury team, investor relations team, and traders. We even use sentiment analysis from Grok on platform X, website traffic, and MicroStrategy App usage data to assist in decision-making. This is definitely not a whimsical decision; it's the rigorous approach expected from a data analytics company.
Funding Mechanisms and the Highest-Order Philosophy: "Doing Nothing"
Zack Guzman: Besides bitcoin, if STRC continues to trade below par value, what other funding mechanisms might you utilize in the future?
Phong Le: We have many options: issuing more stock (our stock trades $2.7 billion daily, one of the most liquid stocks globally), issuing other preferred shares, or issuing more convertible debt—the market is very open to us. But I want to emphasize one point: we currently hold 845,000 bitcoins. We can fully choose to 'do nothing.' This was our core strategy during the 2022 bear market: we repaid some senior secured notes and bitcoin-backed debt, and then just sat quietly on this massive bitcoin treasury. As bitcoin rebounded, the company's valuation and bitcoin per share naturally rose. In a bear market, the most dangerous temptation is often to 'do something,' like large-scale panic selling, but we would never do that. 'Doing nothing' is an extremely important strategic option for us.
Confronting Volatility and Conviction: Great Companies Have All Had "Near-Death Experiences"
Zack Guzman: When you choose to 'do nothing,' watching unrealized losses accumulate to billions of dollars, how do you personally feel?
Phong Le: People sometimes forget that this company, formerly known as MicroStrategy, was founded by Michael Saylor in 1989, went public in 1998, and we only added bitcoin to the balance sheet in 2020. In the 31 years from 1989 to 2020, our Executive Chairman has extensive experience leading the company through countless ups and downs. This is precisely the foundation of the company's resilience and strength. I've been CFO since 2015 and took over as CEO in 2022, so I've also weathered 11 years of storms. Michael's hair has turned a lot grayer, and so has mine.
Look at Amazon—it couldn't be what it is today without going through a few near-death experiences and intense volatility; Tesla also had its 'funding secured' tweet storm. 2022 was indeed a difficult period, but it also forged resilience for those who persevered. Why am I unwavering? Because I believe in the underlying logic. I believe bitcoin can create sovereignty and freedom for people worldwide, that it's a better way to move money digitally, a programmatically superior scarce asset. Just like Jeff Bezos believed Amazon could create real value for hundreds of millions of consumers, as long as you believe in the underlying logic, all other volatility will fall into place.
The Evolution of AI: From Creating STRC to 6 Trillion Agents Trading on Mars
Zack Guzman: Rumors suggest the STRC product was inspired by internal AI tool exploration. What other long-term plans do you have regarding the intersection of AI and finance?
Phong Le: Yes. When generative AI first appeared, people thought it could only write meeting minutes. But we discovered it could help us design revolutionary products that would normally take months or be outright rejected by lawyers and banks. AI helped us find relevant case law and financial KPIs, reducing STRC's development cycle from three years to eight months.
But this is just the beginning. What's more exciting is Agentic AI. Internally, we are deploying agents to automatically summarize information, fix code (self-healing code), etc. Ultimately, the world will evolve from 6 billion humans to 6 trillion autonomous decision-making agents—imagine SpaceX deploying a million humanoid robots on Mars and the Moon. When they engage in commercial interactions and value exchange, they absolutely will not use traditional financial networks like Visa, Mastercard, or SWIFT. Instead, they will use decentralized crypto rails and seek high-yield products with bitcoin as the underlying store of value. This is an immeasurably huge positive for the crypto world and bitcoin.
Bridging the Divide: Crypto Fundamentalism vs. Capital Markets
Zack Guzman: There's always been a sense of division in the crypto world: one faction are 'fundamentalists' who only believe in bitcoin, while another deeply understands the necessity of connecting to traditional capital markets. How does MicroStrategy balance these two?
Phong Le: When I deeply engaged with bitcoin, I wanted to promote it to everyone around me, but I never required them to pass an IQ test or a loyalty test, nor did I ask about their religion, nationality, sexual orientation, or professional background. If bitcoin is to win the world, it must allow as many people as possible to gain exposure in various ways. Whether through self-custody with a hard wallet, buying on Coinbase, holding MicroStrategy stock, holding STRC, or through DeFi protocols, ETFs—these are all good ways to spread bitcoin. Our philosophy is: 'Spread Bitcoin with love.'
Can STRC Return to Its $100 Par Value?
Zack Guzman: Will STRC compete with USDC/USDT in the stablecoin market? What's your roadmap for it returning to its $100 par value?
Phong Le: STRC is only 10 months old, while bitcoin is 18 years old. It's still in its infancy, and we are still learning and perfecting it. Our goal is for it to trade between $99 and $101. Recently, we used our dollar reserves to repurchase $1.5 billion in convertible bonds, which reduced reserves and temporarily put pressure on STRC's price. Next, we will replenish reserves, and with the first semi-monthly dividend payment mechanism starting on June 30th, it will gradually return to par value. The product is extremely over-collateralized; paying dividends is not a problem at all and doesn't keep me up at night.
Closing the Polymarket Controversy
Zack Guzman: There was huge controversy on Polymarket about whether you 'sold bitcoin before May 31st.' Did you really sell?
Phong Le: I followed the whole process. I can state clearly: We did sell bitcoin in the week before May 31st and truthfully recorded it in the 8-K filing released at 8 a.m. the following Monday. As for how prediction markets interpret contracts, that's their business, but I am very clear about what the company actually did internally.
