Full Text of Michael Saylor's Dubai Speech: What is DAT? When Will MicroStrategy Sell Its Coins?

MicroStrategy founder Michael Saylor, in his December 4 speech in Dubai, fully revealed the DAT (Digital Asset Treasury) business model for the first time. MicroStrategy currently holds 650,000 bitcoins, having invested about $4.8 billion. Saylor clearly stated that they will never sell their coins. As long as Bitcoin’s annualized growth rate exceeds 1.36%, it will cover costs. The company has $1.44 billion in cash reserves to support 21 months of operations.

How the DAT Model Generates Cash Flow from Bitcoin

In his speech, Michael Saylor systematically explained the core logic of the DAT (Digital Asset Treasury) business model for the first time. Traditionally, Bitcoin is seen as a highly volatile capital asset: holders may see considerable appreciation in 10 years, but there is no cash flow during that period. This characteristic deters most institutions and individual investors, as they need a stable source of income.

The revolutionary aspect of the DAT model is that it transforms digital capital into digital credit. MicroStrategy holds about 650,000 bitcoins as collateral capital and issues various digital credit instruments based on this, including STRF, STRK, STRD, and STRC. These products are structured similarly to preferred shares, paying dividends to investors monthly, but the underlying asset is Bitcoin rather than traditional company cash flow.

STRC is the flagship product of this system. It offers an annual yield of about 10.8%, far exceeding the 0.4% of traditional bank savings accounts or the 4% of money market accounts. More importantly, since the dividends are paid as “return of capital,” investors do not need to pay taxes immediately, with the actual after-tax equivalent yield reaching nearly 17%. For European investors, Stream (the euro-denominated version of STRF) has an effective yield of 12.5%, with a pre-tax equivalent yield close to 20%. In high-tax countries like Austria or Belgium, this is equivalent to earning 27% bank account interest.

The DAT Model’s Triple Tax Deferral Structure

Capital Level Deferral: Holding Bitcoin does not trigger a taxable event; appreciation is not subject to capital gains tax until sale.

Credit Level Deferral: Issuing digital credit to raise funds for Bitcoin purchases does not generate taxable income on the liability side.

Dividend Level Deferral: Dividends are paid as “return of capital,” so investors receive cash but with near-zero tax rates.

This triple tax deferral structure is currently the world’s most efficient and scalable fixed-income generation model, which cannot be replicated by traditional energy, real estate, or consumer goods companies.

Why Coins Will Never Be Sold

When asked “when will you sell your coins,” Michael Saylor’s answer was very clear: never. There is strict financial logic behind this. MicroStrategy’s capital structure is about $6 billion in BTC reserves against about $800 million in debt, which is very low leverage. The reserve value is equivalent to 73 years of dividend payouts, and the company pays about $80 million in annual interest expenses.

To maintain net asset growth, Bitcoin only needs to appreciate at an annual rate of 1.36% to cover costs. This is MicroStrategy’s “cruising speed.” In other words, Saylor is betting that Bitcoin’s long-term annualized growth will exceed 1.36%. As long as this is achieved, the company and shareholders will win. In fact, Bitcoin’s average annualized growth rate over the past five years has been close to 50%, far exceeding this threshold.

Cash flow management is even more important. This week, MicroStrategy raised another $1.44 billion in cash reserves, equivalent to 21 months of expenses. This means that even if the financing market shuts down completely, the company can “hold its breath” and persist for nearly two years. This is what Saylor refers to as the “dollar battery,” providing a liquidity buffer for the entire DAT system.

The company’s operational strategy is very clear: when the stock price is above net asset value (NAV), sell equity to create incremental value; when the stock price is below NAV, sell derivatives to maintain value growth. The core of the whole system is to continuously increase the “bitcoin per share,” which is the most important metric for long-term Bitcoin believers.

The Liquidity Revolution of Digital Credit

Michael Saylor emphasized that the market performance after the launch of STRC has validated the success of the DAT model. Traditional preferred shares have an average daily trading volume of about 100,000 shares; even successfully listed mainstream preferred shares usually only see about $1 million in daily trading. STRC, on the other hand, has an average daily trading volume of $140 million, 100 times that of traditional products.

This liquidity advantage comes from its digital nature. Digital credit is highly transparent and homogeneous, with risk models updated every 15 seconds. Unlike packing 10,000 mortgage loans into MBS, which is so complex, or the structural heterogeneity of corporate or sovereign credit, digital credit is fundamentally more like equity than debt. Equity never matures and never forces the issuer to repay principal; this “permanence” means dividends can be paid out forever.