Author|Coinage
Compiler| WuBlockchain
Market Reaction and Long-Term Logic: The Short Term is a Voting Machine, the Long Term is a Weighing Machine
Zack Guzman: The sale of these 32 bitcoins has drawn global attention. Facing the various market reactions, what's the one point you most want to clarify?
Phong Le: There's an old saying on Wall Street: '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 bitcoin per share,' we are just transparently providing KPIs and a long-term perspective. There will always be short-term overreactions, but I won't spend much time reading every comment on X (Twitter). We make decisions considering the daily, annual, and long-term lens, and the long-term lens is the most important.
We focus on whether we are continuously creating value for different classes of shareholders, such as common stockholders, preferred stock holders, debt holders, etc., while also driving the development of 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 (approx. $2.5 million), bought about $100 million the week before, and bought about $1.5 billion the week before that. We voluntarily disclose this information through 8-K filings every week. As the world's largest corporate holder of bitcoin, bearing the positive and negative market feedback is part of the responsibility that comes with our transparency.
Proving Liquidity to the Market: Dispelling the "Death Spiral" Narrative
Zack Guzman: Some see this sale as 'vaccinating' the market. Others compare you to Terra, worried that STRC (Strategy Preferred Stock, i.e., the Stretch preferred stock product) might trigger a 'death spiral' of cascading sales if leveraged by other DeFi protocols. Was this a concern 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 roughly 80% of STRC is held by retail investors, a significant portion is held by long-term institutional holders, and DeFi protocols hold a very small percentage, less than 10%.
When we say 'vaccinating the market,' it has two main meanings: First, our debt holders (digital credit and bond holders) want confirmation that, given almost 100% of our assets are bitcoin, we have the ability and willingness to mobilize these assets if needed for dividend payments or other purposes. At the same time, rating agencies want to see that we won't sell bitcoin arbitrarily. So we made one small sale to prove to creditors that we *can* sell, and to prove to rating agencies that we have discipline. Second, it tests our internal business processes. We disclosed custodian information but not the 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 are our wallets. We wanted to see how the entire sales process operates in a real environment and how the market reacts. Hopefully, the market won't make a fuss when we sell a few million dollars worth of bitcoin in the future.
Farewell to the Black Box: Michael Saylor and Strategy's Decision-Making Mechanism
Zack Guzman: We've seen all sorts of experiments in the crypto space, and frankly, we've reported on founders with highly concentrated power like SBF and Do Kwon. But Strategy is different. How was a decision like 'selling 32 bitcoins' actually made internally?
Phong Le: As a well-known public company on Nasdaq, Michael Saylor no longer holds a majority stake. We have 8 board members, common stockholders, preferred stockholders, and debt holders, and to some extent we are also responsible to the broader crypto community.
On a macro level, we discuss the 'optionality' of capital with the board every quarter during earnings calls — we can issue stock, preferred stock, convertible notes, buy and sell bitcoin, or buy back bonds. Only after reaching consensus at this level do we move to the execution layer. On 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 targets for the week; every morning, we confirm daily instructions with the treasury team, investor relations team, and traders. We even use sentiment analysis via Grok on X, website traffic, and Strategy App usage data to aid decisions. This is by no means a spur-of-the-moment decision, but the rigorous approach expected of a data analytics company.
Funding Mechanisms and the Highest Philosophy: "Doing Nothing"
Zack Guzman: Besides bitcoin, if STRC remains below par, 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 stock, or issuing more convertible debt. The market is also very open to us. But I want to emphasize one point: we currently hold 845,000 bitcoins, and we can completely choose the option of 'doing nothing.' This was precisely 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 recovers, the company's valuation and bitcoin per share naturally rise. In a bear market, the most dangerous temptation is often the urge to 'do something,' like panic selling on a large scale, but we would never do that. 'Doing nothing' is an extremely important strategic option for us.
Facing Volatility and Conviction: Great Companies Have All Experienced "Near-Death" Moments
Zack Guzman: When you choose to 'do nothing,' watching unrealized losses accumulate to billions of dollars on paper, what is your personal feeling like?
Phong Le: People sometimes forget that this company, once called MicroStrategy, was founded by Michael Saylor in 1989, went public in 1998, and we only added bitcoin to the balance sheet in 2020. From 1989 to 2020, for 31 years, our Executive Chairman has extensive experience leading the company through countless ups and downs, which is the foundation of the company's resilience and strength. I have been CFO since 2015 and took over as CEO in 2022, also weathering 11 years of storms. Michael's hair has turned a lot whiter, and so has mine.
Look at Amazon—it couldn't be what it is today without going through several near-death experiences and severe volatility; Tesla also had its 'funding secured' tweet storm. 2022 was indeed a difficult period, but it 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 globally, believe it's a better way to move money on digital rails, and a procedurally 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 fluctuations will resolve themselves.
The Evolution of AI: From Creating STRC to 6 Trillion Agents Trading on Mars
Zack Guzman: Rumors say the inspiration for the STRC product came from exploring internal AI tools. 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 found it could help us design revolutionary products that would normally take months or be outright rejected by lawyers and banks. AI helped us find applicable case law and financial KPIs, shortening 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, repair code (self-healing code), etc. Ultimately, the world will evolve from 6 billion humans to 6 trillion autonomous decision-making agents—imagine SpaceX deploying one 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, but 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 camp is the 'fundamentalists' who only believe in bitcoin, another camp deeply understands the need to connect with traditional capital markets. How does Strategy 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 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 hardware wallet, buying on Coinbase, holding Strategy stock, holding STRC, or through DeFi protocols, ETFs—all are 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 for 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. It's still in its infancy, and we are constantly learning and improving. Our goal is for it to trade between $99 and $101. Recently, we used our dollar reserves to buy back $1.5 billion in convertible bonds, which depleted reserves and temporarily put pressure on the STRC price. Next, we will replenish reserves, and coupled with the semi-monthly dividend payment mechanism starting June 30th, it will gradually return to par value. The product is extremely overcollateralized; paying dividends is not a problem at all and won't keep me up at night.
Polymarket Dispute Settled
Zack Guzman: There was a 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 the week before May 31st and truthfully recorded it in the 8-K filing released at 8 AM the following Monday. As for how prediction markets interpret contracts, that's their business, but I know very clearly what the company actually did internally.
