Phong Le: Inside Strategy's Bigger Vision for Bitcoin and Wall Street

Phong Le (0:00)

What do you actually mean when you say, We're now the JPMorgan of the digital economy. Who wouldn't aspire to be the JPMorgan of Bitcoin, or the Apple of consumer devices, or what Google is in terms of information? I think it would be great to be the JPMorgan of Bitcoin.

Natalie Brunell (0:17)

What does Jamie Dimon think of that?

Phong Le (0:18)

I think Jamie Dimon is a Bitcoiner behind the scenes. I think everyone is a Bitcoiner privately once they learn to understand Bitcoin.

Natalie Brunell (0:26)

What do you say to them, the people that really are rooting for your company, but at this point, their investments are down?

Phong Le (0:32)

95% of my compensation is through the performance of the stock. And that's true with our executive team. We all want the common stock to work well over time.

Natalie Brunell (0:41)

STRC has not returned to PAR yet. Would you say that you were prepared for the volatility?

Phong Le (0:46)

We did not expect the amount of leverage that came into the system.

Natalie Brunell (0:49)

So how do you prevent this type of challenge in the future when you get back up to PAR, leverage building on top again and creating more volatility?

Phong Le (0:56)

Yeah, so.

Natalie Brunell (1:03)

Hey, everyone. Welcome back to the show. Joining me this week is CEO of Strategy, Phong Le. It's great to have you back. I know you've had a very busy summer. So thanks for joining me.

Phong Le (1:11)

Thanks for having us, Natalie, or for having me. And yes, we've been busy.

Natalie Brunell (1:15)

Well, let's start with just sort of the news of the week, which is AI, AI regulation. A lot of people are talking about the eventual convergence of AI technology with Bitcoin. Where do you see all of this going? Because right now there are so many concerns about emerging technology. We need the government to sort of step in. We saw clarity fail. How do you see it from your point of view?

Yeah.

Phong Le (1:38)

So I've said for a while that Bitcoin and AI are the two most important technologies of the 21st century. And we strategy are quite fortunate to sit at the intersection of those because of our Bitcoin business, but our software business. So I spent a lot of time on the subject. And I can't help but think AI could learn a lot from Bitcoin.

AI could use a Satoshi Nakamoto right about now.

If you think about what Bitcoin has done, Bitcoin has created a decentralized, non-sovereign asset class that has the potential, not just to disrupt the financial markets, but to significantly improve the financial markets. And I think about things in terms of capital markets. And if you think big picture, the global public markets, capital markets, is about $150 trillion.

And financial services is the second largest industry in the global public capital markets. And I think it's around $25 trillion. So a pretty big chunk of the $150 trillion are financial services. And of course, at the middle of those are companies like JPMorgan, Bank of America, Wells Fargo, Citibank, Morgan Stanley, etc. They represent the second largest industry in the world. And what Bitcoin does is solves all of the existing problems of the traditional capital markets. Right? Whether it be money transfers, whether it be yield generation, whether it be a US dollar standard, inflation, Bitcoin solves that. And it solves it because it is a decentralized non-sovereign commodity. And it's been determined that by the US government, the SEC, CFTC, governments all around the world. Right? And so we've created an asset class. It's 18 years old. And over the course of the next five years, we'll completely progress and improve the financial market that is existing. That's exciting. Now, let's move to AI. So I said the second largest industry in the world is financial markets. Do you know what the first largest is?

Natalie Brunell (4:08)

Technology.

Phong Le (4:08)

It's technology, right? So it's the Microsofts, it's the Googles, it's the Metas. And I think it roughly represents about $45 trillion, a capital of that $150 trillion. So think about the MagSemmon, right? Think about the SaaS companies and the SaaS Pockets. AI has the potential to disrupt that entire industry, like Bitcoin financial services. And that's just, I'll call it virtual AI. Now, let's talk about what people really aren't thinking about quite yet. Physical AI, right? Think about humanoid robots, self-driving cars, right? Machines that fix themselves. And then you go from, it's going to disrupt the technology sector. Bitcoin is going to disrupt financial services. The next biggest sector is global manufacturing, right?