"In the short term, the market is a voting machine; in the long term, the market is a weighing machine."

Source:Coinage

Translation: Wu Talks Blockchain

Market Response and Long-term Logic: The short term is a voting machine, and the long term is a weighing machine

Zack Guzman: The recent sale of 32 bitcoins has attracted global attention. What is the one point you most want to clarify in the face of the market's various reactions?

Phong Le: There's an old saying on Wall Street: "In the short term, the market is a voting machine; in the long term, the market is a weighing machine." We are not seeking votes on "how we increase the per-share bitcoin holdings"; we simply provide KPIs and a long-term perspective transparently. There will always be short-term overreactions, but I won’t spend too much time scrolling through every comment on X (Twitter). Our decision-making considers daily, annual, and long-term perspectives, with the long-term perspective being the most important.

What we focus on is whether we are continuously creating value for different categories of shareholders, such as common stockholders, preferred stockholders, and debt holders, while also promoting the development of the bitcoin ecosystem itself. This is not the first time we have sold bitcoins; in 2022, we sold about $2.5 million worth of bitcoin and bought back later. This time, we also sold 32 bitcoins (about $2.5 million), bought approximately $100 million the previous week, and about $1.5 billion the week before that. We voluntarily disclose this information each week through 8-K filings. As the world's largest bitcoin corporate holder, bearing both positive and negative market feedback is our responsibility behind our transparency.

Proving Liquidity to the Market: Breaking the "Death Spiral" Narrative

Zack Guzman: Some see this sale as a "vaccination" for the market. Others compare you to Terra, worrying that STRC (Strategy Preferred Stock) leveraged by other DeFi protocols could trigger a cascading sell-off "death spiral." Were these concerns expressed before you sold?

Phong Le: That was not a driving factor at all. We are not concerned that DeFi protocols built on STRC would cause a cascading collapse because about 80% of STRC is held by retail investors, and a large portion is held by long-term institutional holders, with the proportion held by DeFi protocols being very small, less than 10%.

When we say "vaccinate the market," there are two main implications: first, our debt holders (digital credit and bond holders) want to confirm that, given our nearly 100% asset allocation in bitcoin, if dividends or other uses really need to be paid, we have the ability and willingness to use those assets. At the same time, rating agencies want to see that we won't sell bitcoins indiscriminately. So, we make a small sale once to show creditors that we can sell, and also to demonstrate to rating agencies that we have discipline. Second, it's about testing internal business processes. We disclosed custodian information but did not disclose specific bitcoin addresses. Once we moved bitcoins from cold storage to hot wallets, there would be countless people trying to guess which wallets belong to us. We wanted to see how the entire selling process operated in a real environment and the market's response. We hope that in the future, when we sell millions of dollars worth of bitcoin, the market won't overreact.

Farewell to the Black Box: Michael Saylor and the Decision-Making Mechanism of Strategy

Zack Guzman: We've seen various experiments in the crypto space, and to be honest, we've also reported on highly centralized founders like SBF and Do Kwon. But Strategy is different; how was the decision to "sell 32 bitcoins" made internally?

Phong Le: As a well-known NASDAQ-listed company, Michael Saylor no longer holds a majority stake. We have eight board members, including 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 "discretion" of funds in our quarterly earnings meetings and board meetings — we can issue stocks, preferred stocks, and convertible bonds, we can buy and sell bitcoins, or repurchase bonds. After reaching a consensus at this level, we enter the execution phase. On a micro level, we run extremely complex financial models every month to analyze the impact of different operations on stock quality and credit quality; weekly, Michael and I discuss the objectives of that week; every morning, we meet with the funds team, investor relations team, and traders to determine daily instructions. We even use sentiment analysis from the Grok platform on X, website traffic, and Strategy App usage data to assist decision-making. This is definitely not a decision made on a whim, but a rigorous approach that a data analytics company should have.

Capital Raising Mechanisms and the Highest Philosophy: "Doing Nothing"

Zack Guzman: Aside from bitcoin, if STRC continues to remain below par, what other capital raising mechanisms will you employ in the future?

Phong Le: We have many options: issuing more stocks (our stock trades about $2.7 billion daily, making it one of the most liquid stocks globally), issuing other preferred stock, or issuing more convertible debt; the market is very receptive to us. But I want to emphasize one point: we currently hold 845,000 bitcoins, and we can absolutely choose "to do nothing." This was our core strategy during the 2022 bear market: we paid off part of our secured notes and bitcoin-backed debt, and then we just sat quietly on this massive bitcoin treasury. As bitcoin rebounds, the company valuation and per-share bitcoin holdings will naturally rise. In a bear market, the most dangerous temptation is often to resist "doing something,” like mass panic selling, but we would never do that. "Doing nothing" is one of our extremely important strategic options.

Facing Volatility and Belief: Great Companies Have Experienced "Near-Death Experiences"

Zack Guzman: When you choose "to do nothing" and watch your paper losses accumulate to billions of dollars, how do you personally feel about it?

Phong Le: People sometimes forget that this company, formerly known as MicroStrategy, was founded by Michael Saylor in 1989 and went public in 1998; we only added bitcoin to our balance sheet in 2020. Over the 31 years from 1989 to 2020, 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 the CFO since 2015 and took over as CEO in 2022, and have experienced 11 years of storms. Michael's hair has turned much whiter, and so has mine.

Look at Amazon; without going through several near-death experiences and extreme volatility, it wouldn't be the Amazon we have today; Tesla also had its tweets about "funding secured." 2022 was indeed a difficult time, but it forged resilience for those who persisted. Why am I unwavering? Because I believe in the underlying logic. I believe bitcoin can create sovereignty and freedom for people around the world, and that it is a superior method for moving funds through digital channels, as a programmatically superior scarce asset. Just like Jeff Bezos firmly believing Amazon can create real value for hundreds of millions of consumers, once you believe in the underlying logic, all other fluctuations will be resolved.

The Evolution of AI: From Establishing STRC to 60 Trillion Agents on Mars Transactions

Zack Guzman: There are rumors that the inspiration for the STRC product comes from exploring internal AI tools. What long-term plans do you have for the integration of AI and finance?

Phong Le: Yes. When generative AI first appeared, everyone thought it could only write meeting minutes. But we found that it can help us design revolutionary products that originally took months to create and that lawyers and banks would outright reject. AI helped us find applicable case law and financial KPIs, reducing the development cycle of STRC from three years to eight months.

But this is just the beginning. What is even 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 60 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 exchanges, they will absolutely not use traditional financial networks like Visa, Mastercard, or SWIFT, but will use decentralized cryptographic channels, seeking high-yield products that store value in bitcoin as a fundamental asset. This is an immeasurably great benefit for the crypto world and bitcoin.

Bridging the Divide: Crypto Fundamentalism vs Capital Markets

Zack Guzman: There has always been a sense of division in the crypto world: one faction consists of "fundamentalists" who only believe in bitcoin, while the other understands the necessity of connecting to 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 IQ tests or loyalty tests, 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-custodied hardware wallets, buying on Coinbase, holding Strategy stocks, holding STRC, or through DeFi protocols or ETFs, all of these are good ways to spread bitcoin. Our philosophy is: "Spread Bitcoin with love."

Can STRC Return to a Par Value of $100?

Zack Guzman: Will STRC compete in the stablecoin market against USDC/USDT? What do you think the roadmap is for it to return to a par value of $100?

Phong Le: STRC has only been around for 10 months, while bitcoin has been around for 18 years; it is still in its infancy, and we are continually learning and improving. Our goal is to have it trade between $99 and $101. Recently we used dollar reserves to repurchase $1.5 billion worth of convertible bonds, which reduced our reserves and temporarily pressured the STRC price. Next, we will replenish reserves, along with the first half-month interest payment mechanism that started on June 30, it will gradually return to par value. The product is extremely over-collateralized, and paying dividends is not an issue that will keep me awake at night.

Polymarket Controversy Closure

Zack Guzman: There was a huge controversy on Polymarket around whether you "sold bitcoin before May 31." Did you really sell?

Phong Le: I was aware of the entire process. What I can clearly state is that we did sell bitcoin in the week before May 31 and accurately recorded it in the 8-K filing published the following Monday morning at 8 a.m. As for how the prediction market interprets the contract, that's their business, but I am very clear about what the company actually did internally.