Creating Bitcoin's Technical & Financial Infrastructure For Maximum Adoption

All right, I get to share the stage with Phong and Satoshi.

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Phong, I'd love to start with you. STRC has allowed you to buy 10 times more Bitcoin than every ETF combined this year, and 80% of holders are retail. What is happening with STRC? It is so fetch.

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I'll start with this: there's only one individual or entity with more Bitcoin than Strategy at this point in time, and it's Satoshi Nakamoto. And if you're going to be second to anybody, we are second best to Satoshi Nakamoto.

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STRC is amazing. It addresses a $300 trillion credit market, and it appeals to everybody, from retail individuals, who own 80% of STRC, to corporations and institutions, who own the other 20%. When you create a product that literally everybody can benefit from, it grows like wildfire, faster than we had hoped for, faster than we expected.

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If Bitcoin, invented by Satoshi Nakamoto, was potentially the most important capital product ever invented in the history of the world, I like to think that STRC, invented by Michael Saylor and Strategy, is potentially the most important credit product in the history of the world. It's a completely new asset class.

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Adam, you are stepping into the capital markets with BSTR, and with Blockstream, you're building a full stack for Bitcoin finance, from self custody to institutional-grade products. How is that shaping the next phase of Bitcoin adoption?

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Last year I was on stage at this event with some announcements about Blockstream building enterprise wallets for small businesses, and then also entering the technology that custodians use for cold storage at the custody level. Whether that's a company self-custodying their Bitcoin or professional licensed custodians doing the same thing, they need technology to do that. So we're in the market to provide that technology.

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Phong, Strategy, as you mentioned, is quickly approaching a million Bitcoin, which is pretty crazy. I think you're going to hit that in the next couple of months. What does it feel like to be running this company, and what are the challenges that come with a product that has grown so quickly?

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Seldom in your life are you able to contribute to a product that, by the time we're sitting here a year from now, will hopefully be acknowledged as one of the most important and fastest growing products in the history of the world. So that in and of itself is awesome and amazing.

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And then realizing that it's a product that does good, right? It's not high-fructose corn syrup. It's not soda. It's not cigarettes. It's something that actually helps individuals. I think that's all fantastic and great.

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More importantly, those who buy STRC realize the advantages of it in terms of a place to put your short-term money. The other piece is that STRC has opened up other channels for people to get into Bitcoin. Someone who wouldn't necessarily buy Bitcoin because of its volatility, or just because it's still somewhat difficult to on-ramp into, can on-ramp into STRC.

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I think the contribution of STRC to the Bitcoin community is great. The other thing we're starting to see happen is a bunch of layer two products being built on top of STRC. Think of STRC now not just as a digital credit product, but as a digital credit platform. People are building products on top of this digital credit platform, and not only Bitcoin products, but decentralized finance products and tokenized products. So it's not just bringing people to Bitcoin, but I think it's starting to bring DeFi and Bitcoin together, which is pretty exciting.

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STRC is this cool product that is doing so many good things for the community, for individuals, for wealth generators, and for Bitcoin and digital assets.

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You brought up tokenization. I'd love to hear from both of you about that, because we hear that catchword now, but a lot of people still feel like they don't understand what it is. Is it built on Bitcoin? Can both of you talk about that?

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Blockstream is a Bitcoin infrastructure company started in 2014, and we are active in at least two Bitcoin layer twos. Obviously Lightning: we have Core Lightning, which is one of the main implementations. But also Liquid, which is a sidechain.

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A sidechain is able to add new features that Bitcoin doesn't have. It has confidential transactions and native support for assets. The assets can be stablecoins, and there are a number of stablecoins on there. There's about $5 billion of value on the network.

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Included in those securities and tokenized products is a Luxembourg securitization vehicle with a number of treasury companies in it. There's been one for MicroStrategy shares held by an underlying custodian bank for a couple of years. The advantage is 24/7 trading priced in Bitcoin, so that's an interesting way to trade MicroStrategy.

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More recently, Metaplanet, Capital B, and H100, the last two being European treasury companies. I think the other thing that tokenization does, other than provide 24/7 trading, is it can more easily be used as collateral in a Bitcoin exchange. It can lend itself to having leverage applied, so that could bring more liquidity to the mid-sized treasury companies and make it easier to access them.

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Even though there's typically no regulatory barrier for somebody in one country to buy a European share, it can be quite hard to get to these small-cap markets because the brokers haven't optimized for that. So it provides more universal access.

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Then I think the real value unlock is tokenizing currently unlisted instruments. Some of the European treasury companies have Bitcoin-denominated convertible notes and euro-denominated convertible notes, which are private contracts. There's nothing precluding you from selling them, but there's no mechanism to find a price, find a buyer, and so on.

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By tokenizing them and having these kinds of non-custodial exchange mechanisms, you can have price formation and be able to trade them or use them as collateral, where currently they're kind of dead collateral when they're out of the money.

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One way I think about tokenization is that it is the digitization of the securities market. If you think about phone lines, they used to be copper, and the digitization was fiber. If you think about what Bitcoin did, it took an asset, a capital asset like gold, and created a digital version of it.

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Now think about how you trade stocks today in equity securities, regulated by the SEC in the U.S. It is an analog process. How do we digitize that? An analog process, to Adam's point, runs every day from 9:30 to 4. A digitized process runs 24/7.

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An analog process means you need to go through a broker-dealer before you can buy and sell a security. A digitized process means that I could tap Adam's phone and buy one share of STRC from him at the market prevailing price instantaneously, and now that share of STRC is on my phone, with a blockchain also providing the transparency.

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It makes a lot of sense that Bitcoin and DeFi in general are the backbone of tokenized securities. You can go to Starbucks, tap your phone, and with a lot of analog processes behind it, buy a coffee for, what is it now, 10 bucks or something? Why can't you do that with a stock peer to peer?

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I think that's what tokenization does. That's why it's pretty exciting. You're all sitting here looking for the digital transformation of capital, of equity, of the credit market. Now talk about the digital transformation of the securities market. It's a huge innovation that we're looking at happening right now outside the U.S., off the current regulatory rails. I think in the next two years, you'll see it come to the U.S. and the world on regulated rails. So it's very exciting.

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Adam, you're one of the original cypherpunks. Why did you decide to move into the institutional side of Bitcoin, and what do you say to the skeptics of the institutionalization of this asset?

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I get that question. Of course, Bitcoin is both a bearer asset that is hard to seize, hard to freeze, and empowering for the individual. It's important that remains the case.

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But I think it's also a sign of success that Bitcoin the asset class is adopted over time by private companies, public companies, pension funds, and sovereigns. We've seen all of that happen at this point, and there's much further for that to grow.

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The cypherpunks were interested in bearer electronic cash with privacy, but they were also free market advocates and capitalists. They very much believed in capital formation, public markets, and the role that plays in wealth generation in the world and the development of products.

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Many people are not traders and have never invested in an IPO or in a public stock. For myself, I was an active trader before Bitcoin in the early 90s. So for me, the fact that Bitcoin is being included in portfolios is useful because the ETFs and public treasury companies, the phenomenon that Michael Saylor started, are easier. It's a form of access for some people.

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Many people in the world don't do self-directed investment. The main way they're going to get exposure to Bitcoin is via model portfolio recommendations, managed funds, annuities, pension funds, and things like that.

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When people talk about institutional adoption, I think a lot of that is still in the future, because you have the model portfolios, but not that much of that capital has landed yet. Those are enormous pools of capital. The reason it hasn't landed is those entities are very procedural, and it takes them a while to get things deployed.

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I'll just add one thing. Sometimes people think about the cypherpunks, or people think about the cryptographic skills and the software engineering skills, but the capital markets and the understanding of finance come hand in hand.

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I had the pleasure of meeting Adam, I think it was in 2021, at a dinner in New York. Even at that point in time, I learned a lot about Bitcoin and capital markets from Adam. I mention that because it's this intersection of these two things. Michael Saylor started as an engineer who ran a public company. I started as a computer programmer who was the CFO of a public company.

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You find that intersection, and you find these individuals who are able to bring those two things together, and it's wondrous in terms of its capability. That's what Bitcoin was, and that's what Satoshi Nakamoto was. So you have here a very gifted mind that understands the capital markets very well, and that's why we're able to build what we're able to build.

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You know what I think is really interesting? Over the last few decades, there seems to have been this demonization of corporations, especially the really massive ones, because in the fiat system, it sometimes feels like they're getting larger and larger not by actual value or merit, but just because of the money printer machine and liquidity flowing to the biggest companies.

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Bitcoin sort of imposes consequences and responsibilities and new rules. Can you talk a little bit about how it's shifting corporate management and the way companies should be structured, which is to provide value and service to us?

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I think it's natural that corporations would adopt Bitcoin. I was quite interested when Michael Saylor started the treasury company phenomenon, and I was actually a relatively early shareholder, because I thought one way to support the initiative was if a lot of Bitcoiners bought a little bit of his shares. Because the company is much smaller than Bitcoin, they could start to own a meaningful proportion of the shares collectively and support the mission.

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Ultimately, in this kind of Bitcoinized future, Bitcoin is the hurdle rate. For people who know about finance, that means if you can't exceed this kind of baseline, then you're not really creating a positive return. In a Bitcoin mindset, portfolios are denominated in Bitcoin, and you're looking for Bitcoin plus some return on top of Bitcoin.

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A treasury company's central objective is to increase Bitcoin per share. That has a Bitcoin-plus return, obviously with some risk. There's no reward without risk, and there's some volatility around there. But I think it's natural that that's the case.

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Of course, public companies and ETFs are ultimately fiduciaries for other people's money. When treasury companies grow via ATMs and other instruments, they're adding shareholders. People will say BlackRock bought Bitcoin, but not really. The individuals bought ETF shares, and the fund managers that allocate to Bitcoin via the ETF or via MicroStrategy, like the Swiss National Bank has, are increasing the capital under management, but their ownership is a lot of people underneath.

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Ultimately, Bitcoin is technology. If you look at the last hundred years, you go back to the 1920s, 30s, and 40s, the largest companies in America were technology companies: oil companies, electric companies, car companies. They were building great technology.

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We went somewhere awry where, if you go back to the 1980s and 1990s, the biggest companies in America were services companies, financial services companies, healthcare services companies, and insurance companies.

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Now what's amazing is that post-2000, we're back to a world where the biggest companies in the world are technology companies, the Mag 7, maybe at some point the Mag 10. We've normalized this world where those who are rewarded, the biggest companies in the world, are the inventors, the creators, the technologists.

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That's what Bitcoin is. Bitcoin is a neutral technology that is winning because it is the best product, not anything else. Of course, as the best product with the highest return, it would make sense that a public company would amass the best product.

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With the Mag 7, perhaps we'll see the Bitcoin 21, like the global 21 most successful Bitcoin companies over time, because Bitcoin is such a huge advantage for a public company to preserve its assets and then run a business on top of that. It restructures the way a business thinks in a Bitcoin-denominated way, developing products and services.

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Could we ever see the big banks move into this space and compete with some of the products that are coming out in the Bitcoin securities market, including digital credit?

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I hope so. You just saw Amy from Morgan Stanley on stage before this. We know Citibank is creating products. We know other big banks are starting to create products. They will.

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Just like anything else, take e-commerce as an example. Amazon was really one of the first and the biggest, and every other company, even Walmart, had to capitulate and create similar capabilities. Will Walmart ever be the e-commerce engine that Amazon is? Well, Amazon just passed Walmart in terms of total revenue as the biggest revenue company in the world.

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If we have a Bitcoin 21, and we're number one with, you can imagine, a million, two million Bitcoin, or whatever it is, could I see Morgan Stanley on that list? I'd love to see them on that list. I'd love to see the big banks on that list, too.

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Well, we're running out of time. I have to ask Adam: The New York Times spent 12,000 words trying to prove that you're Satoshi. We'll set aside whether that's true. I know it's not. But what does the story tell us about where we are in Bitcoin in 2026?

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I think we are in a very good place in terms of regulatory clarity and institutional adoption finally starting to happen. In the pace of innovation in the technology, there's lots of new innovation at the layer one level, lots of work going on in the background to preemptively address potential future quantum risks.

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There's also lots of product development to make ease of use better, and very interesting financialization instruments, which STRC is a key part of. I think that is ultimately forming part of a huge arbitrage between the current world and the hyperbitcoinized future.

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All right, one last question to each of you. Phong, what's next? You have five preferreds. STRC is obviously the darling. What can we expect?

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We've said, and Michael says, STRC is the iPhone moment. After the iPhone were the AirPods, which were products built on top of the iPhone platform. I think you'll see layer two products created by hundreds of companies around the world on top of STRC, and they will be as successful as STRC and make STRC even better.

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I was talking to Adam backstage. I don't think we're going to create a VR headset version of STRC. I think we'll let the iPhone persist and succeed and grow and take over the world.

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Adam, what is one principle from the cypherpunk ethos that has to survive Bitcoin's institutionalization?

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I think it's key that people manage their own keys, do their own storage, retain the option to do that, and run their own nodes. They're proactively forming part of the Bitcoin network and keeping the network honest and secure. It's decentralized, and it benefits from staying that way.

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Not your keys, not your coins, and fix the money, fix the capital markets. Everyone give it up for Adam Back and Phong Le. Thank you so much for joining us.