MicroStrategy CEO Michael Saylor: 'BTC Will Be a $100T Market Cap Asset'

welcome to this special edition of all about Bitcoin and the home of a prolific toddler Bitcoin Bill I'm talking about Michael sale he doesn't need any introduction but he's the CEO of microstrategy Hello There Michael thank you for joining us thanks for coming to visit me Christine yeah welcome to my home welcome to Michael's sales home in the den of the Bitcoin bull all right so we're here down in Miami for nft art Miami week but we happen to be stopping by uh Michael's house I'm your host uh Christine Lee anchor at coindesk let's check in quickly on bitcoin right now the coin does bitcoin price xvx index currently trading at 57 300 and well it was 55 Bitcoin is slightly down just over one percent over the past 24 hours the most reliable reference prices for institutions in 2014 are now published under the coindesk brand trusted globally as the leader in crypto news events and data so this is a very exciting episode that we're covering as part of our coverage for the future of money week uh my uh microstrategy Michael sperm has just recently bought 7 000 or for the fiscal fourth quarter has bought 7 000 Bitcoins which are worth uh but which now your firm holds over 121 000 BTC valued at about seven billion dollars uh you're also one of quite as most influential uh influential Aluna since uh 2020. so Michael we're seeing Bitcoin dip slightly on news that the Federal Reserve that chair Jerome Powell is saying that inflation may not be as transitory as previously believe may not be so short term um does this come as any surprise to you I think everybody in the crypto Community has been focused on inflation for the past year year and a half I got into Bitcoin because I thought that inflation was a going to be a problem starting in March and that's why we got into the business I saw the Congressional testimony today and my takeaway was there's acknowledgment by the administration that there is an inflation challenge that needs to be addressed and there's political consensus uh on both sides of the aisle that the FED should do something about it I think that was the news in the market so there is thought that there will be some tapering in January and it would be more hawkish in terms of what the FED will do in in interest rates uh rather in their stimulus Bond buying program um you know that they might start pulling the lever on that so that could have a detrimental effect to risk on assets like Bitcoin like oil do you see that happening well I guess if we go back to March of 2020 all the assets traded down gold traded down Bitcoin traded down equities traded down bonds traded down it was just a general risk contraction so occasionally that happens but that's why we don't really try to trade the markets or guess the markets we take a Long View I mean short term is four years long term is 10 years and as you know I'm holding Bitcoin forever Christine so it there's going to be volatility in the near term but it seems to me that now we have Universal acknowledgment that the world needs an inflation hedge after scientifically studying everything on Earth I concluded Bitcoin is the best inflation Edge so the answer is if you have Bitcoin don't sell it if you don't have Bitcoin buy it and it'd be Bitcoins moving around weight okay so in terms of your buying strategy are you are you just waiting to raise more money and buy it is there any science to the timing of buying it um we buy Bitcoin as fast as we can with whatever money we find lying around so so when we generate cash flows we buy Bitcoin and if we have uh Equity uh Equity cash flows from stock options a good issue we buy Bitcoin if we issue debt we buy Bitcoin um and uh will from time to time use either cash flows or Equity or debt in order to require more Bitcoin and I think we're not terribly price sensitive like we don't try to time the market when Bitcoin traded down to 29 or 30 000 after they're trying to crack down lots of people were calling for it to go to 20 000. we bought it at 36 000 and people said oh you overpaid blah blah blah but then it trades up to 56 000 and it doesn't look so stupid so I I think that if you try to time the market you're just going to frustrate yourself if you're buying it for the right reason which is to hold it for the long term then I think you know any time is a good time to buy Bitcoin oh and I know your end of year outlook is about a hundred thousand dollars uh per Bitcoin is that still the case and and going forward are you a million Bitcoin I don't have a near-term forecast or a forecast this year for Bitcoin Bitcoin yeah the laser eyes what what I do have the laser eyes but the laser eyes arising that I'm I believe that Bitcoin is critical technology to the human race and it's digital property and it's Apex property it should presumably demonetize gold and investment properties and second homes and monetary indexes and ETFs and that just means it should grow certainly past the market cap of gold and into the market cap of of investment property so you know obviously I think that the asset class over the long term is going to dramatically appreciate I just can't predict the volatility or the the trajectory between now and there so I don't try to all right um pivoting over to some other news so a lot of eyes are on Jack Dorsey he's just announced that he is resigning from Twitter he is also a Bitcoin Enthusiast um he has he's LED Twitter he is leading Square where do you you've had a chance to talk to him uh at previous occasions do you have any idea where his mind is set in terms of you know does he want to get into crypto does he want to get into Bitcoin I think Jack's the hardest working man in the industry right he's he's been leading Square which is extraordinary and they're just doing great and he's been leading Twitter which is another extraordinary job and he's done a great job there and he's also been very instrumental and influential on the entire Bitcoin Community which is almost like a third job um I I don't know anybody that could do uh as well as he's done I I think the implications of this is he's going to focus more on square and more on bitcoin and and uh the world will move forward I think it'll work out great some of the criticism was uh from an activist investor of his Elliott management was that he was uh not focused enough on Twitter and uh in his resignation letter he mentioned that he has moved Twitter to a point where it could move Beyond its Founders I wonder um is it better that he is more focused I guess on payments versus social media and you know other uh adjacent Industries Jack's success at square is stunning and there was a point when Twitter desperately needed him uh he turned around Twitter and he saved the company and so he was instrumental there and I think at this point he said in his letter he feels like Twitter's in a good place and he can move on to focus on other things and Twitter is going to be great I I think that ultimately there are many people in the world that could be CEO of a single company much less to or or have three major initiatives I think Jack's done a stunning job at everything he's touched moving on to another uh Tech billionaire Elon Musk who you have also talked with as part of the Bitcoin mining Council now he's not been uh you know as far as I can tell he hasn't been talking too much about Doge lately uh but well you know what have you been talking to him you know come around and Bitcoin more maybe you know his ESG concerns can be somewhat alleviated uh where are those conversations at well you know I think in in response to some of those early concerns we formed the Bitcoin mining Council and we've already put out two quarterly reports and the latest quarterly report showed efficiency was up more than 20 percent quarter over quarter and sustainability is up to 57 or more I think that the great result at resulting outcome of that uh scrutiny was we realized that Bitcoin mining is the most sustainable cleanest most efficient industry in the world and I think that Jack is sorry I think elon's got a lot of things on his plate he's launching rocket ships that he's doing wonderful things that Tesla and uh that's probably enough uh we've all got our our job to do I think the Bitcoin soldiers on and Tesla moves forward with the Bitcoin mining Council uh what has changed since China's Crackdown on mining and we've seen uh the mining industry you know flourish in North America shall we say in its place I think that the that the China Crackdown credit to China an exodus from China and it was a godsend for North American Bitcoin Miners and for the North American Bitcoin business it really transitioned Bitcoin mining uh to North America and to the West in general um it was an economic windfall companies like mine we were able to buy nearly a billion dollars of Bitcoin at dramatic discounts versus what we would have had to pay we bought 500 million at three thirty six thousand a coin or something and we would have had to pay eighty five thousand a coin to buy the same amount so it's good for Bitcoin holders in in the rest of the world it's good for Bitcoin miners I I've said before it's a tragedy for Bitcoin holders in China if you want to sell right it's a tragedy for you wasn't good for Bitcoin mining industry in China But ultimately uh it was a catalytic event that accelerated the institutional adoption of Bitcoin as well as the adoption of Bitcoin technology in the western world and it cemented the idea of people's head that Bitcoin is Western technology it's good for the United States it's good for Western Europe it's good for the dollar and I think that that was a critical event in the development of Bitcoin we see India discussing in their Parliament that they may consider Banning private cryptocurrencies like Bitcoin in favor of making way for a central bank digital currency a digital rupee and a framework around on that so there seems to be two tracks that countries are taking they can take a more uh private blockchain Roots more centralized route in regulating digital currencies of for their own decentral bank digital currencies or allowing private cryptocurrencies like or it's right it's a public cryptocurrency really uh like Bitcoin uh letting them grow and proliferate as you see this Divergence you know what what do you see happening I I think that this has been a great year for the institutionalization the maturation of the crypto industry and and in this particular way people are realizing that there's a digital currency and there's a digital asset and the consensus amongst Central Bankers Christina Lagarde Jerome Powell All The Regulators even in India even in China is Bitcoin is digital asset they'll call it a speculative asset or store a value Asset but it's an asset it's not a currency an asset means you can hold it as a store of value and it competes with gold or it competes with a second home as a as an investment property a currency is a medium exchange that you can transfer tax-free and it's pretty clear that governments want to keep control of their currencies the rupee the dollar the Euro the CNY are currencies you can use as a medium exchange to transfer tax free they're not threatened by your ownership of a digital asset as long as you agree to pay tax if you were to transfer it so all of these regulations in India and the like they're really regulations straining your use of a digital asset as a currency rather than as a property and you could just boil them down to this one observation you can own as much Bitcoin as you want but if you give it to your friend or you sell it in the open market at a profit we want you to pay capital gains tax on it and if you just acknowledge that then you realize that the future of the industry is quite bright because Bitcoin can become a hundred trillion dollar digital asset class and still never be you know replacing the rupee or replacing the CNY I think that the real struggle in digital currency is going to be U.S dollar stable coin versus the Indian rupee and I believe that if if major U.S banks issue U.S dollar stable coin then you're going to see stable coins grow from 130 130 billion to a trillion to 10 trillion and I think that the US dollar is the threat to a digital rupee or a digital CNY and you want to stay focused on that struggle that will ultimately result probably in capital controls where where countries with weak currencies uh weak peso a weak rupee uh a week CNY they're going to be concerned about all their citizens swapping their currency for the dollar and moving it back and forth and that's the maneuvering that's going on behind the scenes there with The Regulators interesting you know last time we spoke I asked you if you saw the Bitcoin replacing or at least competing with the US dollar uh as a global Reserve currency and you said that you see Bitcoin foreign rails or payment rails maybe you can walk me through this and explain a bit what you meant let's just say everybody wants a savings account that yields interest and goes up in value and they need a checking account to pay for their coffee uh if we fast forward 10 years 8 billion people with uh mobile phones running Android or iOS or the like with a digital wallet they want to have currencies in the wallet they'll have CNY in China they'll have USD in the US they'll have Euros in Paris and they'll have the Ruby and India assuming those governments continue to exist in the next 10 years they probably will those would be the medium and exchange you can transmit all of that money at the speed of light with no tax obligation and you can buy things cross borders with them but everybody wants that savings account and you can't save your money for 10 years using the dollar or the Euro you need to invest it in an asset that will go up in value so you either have to buy land or you have to buy stocks or you have to buy Bitcoin so so I see Bitcoin as the world Reserve asset whereas I see the dollar is the world Reserve currency and the distinction is currencies are used as a medium exchange tax-free and the dollar and the asset is used as a store of value and an investment uh strategy and you really never want to sell it ever you want to hold it for 100 years but should you sell it you owe capital gains tax on it and and I I think both of them will coexist because 100 million companies are all wired to move money around in currencies and every government mandates that the currency is tax-free but the property is taxable so as long as we have governments and as long as we have companies we're going to have a dichotomy between the currency and the and the property right and and and uh in places where the government collapses right then maybe the property becomes the currency in a form of barter but really you would much rather uh spend the currency because it's losing value and Save in the property because it's gaining value right it's it's wiser to hold Bitcoin forever borrow against the Bitcoin pay for your coffee because the money you borrowed is going to zero whereas the Bitcoins going to Infinity so you really don't want to pay for your coffee with your Bitcoin you want to pay for your coffee with a currency and you'd be better off to pay for coffee with a peso because the peso is losing value of 60 70 a year whereas the dollar is only losing 15 to 20 percent of its value a year so that's how I view that they're all going to move on crypto rails everybody wants to move dollars at the speed of light for free and they want to move assets at the speed of light for free and uh the world's coming to terms with how they're going to do that well when you see things with like uh the with El Salvador using Bitcoin as legal tender uh we have the lightning Network where you can spend Bitcoin in small denominations do you see people spending and using Bitcoin as a currency more and more if someone had a bunch of Bitcoin and they wanted to buy a car my advice to them would be borrow enough money to buy the car keep your Bitcoin pay for the car with dollars or pesos or for euros that's a better strategy the Bitcoin goes up 100 a year if you had a million dollars and you paid and you paid for the car with a hundred thousand or fifty thousand of Bitcoin then you would lose 10 million dollar capital gain in the future so I I don't really think it makes sense to pay for things with an appreciating asset it makes sense to pay for things with a depreciating currency the weakest currents you can find if you could buy if you had Bola bars in Venezuela and you had a choice between buying the car with boulevards or buying the car with Bitcoin I would say buy the car with the boulevard and if you don't have any bowl of bars but a bank will give you a loan and Bolivars against the Bitcoin you can see the best idea going is I borrow money against Bitcoin and if it keeps doubling every year then in 10 years I'll have 100 million dollars in Bitcoin loan whereas if I paid with the Bitcoin I won't have the hundred million dollars so so no I wouldn't sell the Bitcoin to pay off your mortgage and I wouldn't sell the Bitcoin to buy the car I would always pay for the car in the weakest currency you can find and the best deal going is find a bank that'll loan you money in the local currency so we had the chance to speak with the El Salvador ambassador to the United States uh Melanie Mayorga recently uh talking about El Salvador and she said that Bitcoin challenges the authority of the United States it's not something you could agree with no I think uh you know Bitcoin is like digital energy like oil is like liquid energy like steel is metallic energy like electricity it's electromagnetic energy and I think that uh the great Nations will harness oil steal electricity in Bitcoin it's just a technology right um it's as I've said before it's not a currency if you use it as a currency you would be paying 50 million dollars to buy a Lamborghini if you look out 10 years a much better idea would be to keep the 50 million dollars and the Lamborghini and owe 300 000 in debt so you're saying um one million Bitcoin in 10 years or where it was was that where does that go I think eventually Bitcoin is an asset cost becomes a hundred trillion dollar asset class if if it replaces gold and it replaces digital other forms of property and it replaces Bond portfolios and why can't it grow by a factor of a hundred

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Id: 3LhKmXCwy-4

Length: 20min 51sec (1251 seconds)

Published: Tue Nov 30 2021