Bitcoin has 'all the great attributes & none of the defects' of gold: MicroStrategy's Michael Saylor
Summary
TLDRIn a recent interview, Michael Saylor of MicroStrategy discusses Bitcoin surpassing $70,000, emphasizing its superiority as a digital gold with no defects. He highlights Bitcoin's potential to divert capital from risk assets and ETFs, predicting its integration into funds like BlackRock's. Saylor also compares MicroStrategy to a high-performance airfreight for Bitcoin, leveraging convertible debt to increase shareholder value, offering upside potential with downside protection, and attracting capital with its volatility.
Takeaways
- 🚀 Bitcoin has surpassed the $70,000 mark for the first time, reaching over $72,000, indicating a significant milestone in its value trajectory.
- 🤔 Michael Saylor from MicroStrategy discusses Bitcoin's potential to outperform gold and become a digital gold, highlighting its superior attributes without the physical limitations of gold.
- 💼 MicroStrategy holds a significant amount of Bitcoin, approximately 200,000 coins, showcasing their strong belief in the cryptocurrency as an investment.
- 🌐 Bitcoin's digital nature allows for rapid, global transactions, making it a highly accessible and liquid asset compared to traditional assets.
- 📈 The introduction of Bitcoin ETFs to the public market provides a new avenue for investment, potentially impacting the demand and value of Bitcoin.
- 💡 Saylor suggests that Bitcoin's integration into funds like BlackRock's could lead to a structural shift in how the asset class is perceived and utilized.
- 📊 The halving of Bitcoin's organic supply of sellers, expected by April 20th, could lead to a price adjustment to meet investor demand, according to Saylor.
- 🏦 MicroStrategy is positioned as a high-performance investment compared to the large-scale approach of companies like BlackRock, using leverage intelligently to maximize returns.
- 💹 The company's use of convertible debt provides shareholders with more Bitcoin exposure per share, offering a unique investment opportunity.
- 🛡️ MicroStrategy offers downside protection with upside potential in Bitcoin, an attractive proposition for investors looking for volatility and performance.
- 🤝 Saylor emphasizes the importance of Bitcoin's global recognition and trust, positioning it as an ethical and useful asset for a wide range of transactions.
Q & A
What significant milestone did Bitcoin achieve on the morning of the interview?
-On the morning of the interview, Bitcoin crossed the $70,000 mark for the first time and was trading above $72,000.
Who is Michael Saylor and what is his connection to Bitcoin?
-Michael Saylor is the CEO of MicroStrategy, a company that had held about 200,000 Bitcoins at the end of the previous month, making him a significant figure in the Bitcoin community.
How does Michael Saylor view Bitcoin in comparison to gold?
-Michael Saylor views Bitcoin as a superior digital gold. He believes it has all the great attributes of gold but without its defects, such as the ability to be teleported from New York to Tokyo in a few minutes.
What impact does Saylor predict Bitcoin will have on risk assets and ETFs like SPY?
-Saylor predicts that Bitcoin will divert capital from risk assets and risk ETFs like SPY, as it becomes more incorporated into various funds and becomes a structural part of the asset class.
What is the significance of the halving event for Bitcoin's supply and price?
-The halving event will cut the organic supply of sellers in half by April 20th, reducing the daily natural sellers to about 3,000 Bitcoins, which is approximately $32 million a day. This reduction in supply is expected to cause the price of Bitcoin to adjust upwards to meet investor demand.
How does Saylor describe the role of MicroStrategy in relation to Bitcoin?
-Saylor describes MicroStrategy as a high-performance 'airfreight' option for investors interested in Bitcoin, as opposed to the 'containership' or 'super tanker' of Bitcoin like BlackRock, which can take in larger amounts of capital efficiently.
What type of leverage does MicroStrategy use and how does it benefit the company and its shareholders?
-MicroStrategy uses intelligent leverage by borrowing money at low interest rates to buy Bitcoin. This strategy provides volatility and performance, which in turn attracts capital, allowing the company to leverage more and give shareholders more Bitcoin per share.
How does Saylor differentiate MicroStrategy's approach to Bitcoin from that of ETFs?
-Saylor points out that while ETFs charge 25 basis points and offer exposure to Bitcoin, MicroStrategy offers a yield against shares in a tax-efficient manner, providing upside potential with downside protection that is unique and attractive to investors.
What is Saylor's perspective on the potential for Bitcoin's price based on the Stock-to-Flow model?
-Saylor does not directly address the Stock-to-Flow model in the provided transcript, but he does express confidence in Bitcoin's superior investment potential compared to gold, equities, bonds, and real estate.
How does Saylor justify the use of leverage in MicroStrategy's Bitcoin investment strategy?
-Saylor justifies the use of leverage by explaining that it allows MicroStrategy to invest in Bitcoin at a low interest rate, providing a non-recourse, unsecured loan that enhances the company's performance and volatility, which is attractive to investors.
What is Saylor's response to concerns about the volatility of Bitcoin and potential doubts about its value?
-Saylor expresses no doubt in his mind about Bitcoin's value, even at higher prices, and compares his perspective to Warren Buffett's, emphasizing Bitcoin's digital nature, global availability, and its utility as the 'king of all commodities'.
Outlines
🚀 Bitcoin's Ascent and MicroStrategy's Strategy
In this segment, the speaker discusses Bitcoin's recent surge past the $70,000 mark, reaching over $72,000. Michael Saylor from MicroStrategy is highlighted for his early and bold investment in Bitcoin, with his company holding about 200,000 Bitcoins. The conversation delves into Bitcoin's potential to overshadow gold as a digital asset without the physical limitations. Saylor suggests that Bitcoin is set to divert capital from traditional risk assets and ETFs, and will be incorporated into various funds, becoming a structural part of the financial system. He also touches on the impact of the halving event on the supply of Bitcoin and its effect on the market price. The discussion then shifts to how investors should view MicroStrategy in light of new Bitcoin ETFs, with Saylor comparing BlackRock's approach to a large container ship versus MicroStrategy's high-performance 'airfreight' method. He emphasizes the intelligent leverage and non-recourse, unsecured nature of their strategy, which has allowed them to acquire more Bitcoin per share for their shareholders.
🤔 Reflections on Bitcoin's Value and Market Dynamics
The second paragraph continues the discussion on Bitcoin, with the speaker posing questions about the company's market performance based on Bitcoin's value. The conversation explores whether the 'stock-to-flow' metric is valid for predicting Bitcoin's potential price and the immediate implications of the halving event on the Bitcoin market. Saylor responds by reaffirming his belief in Bitcoin as a superior investment, even at higher prices, drawing a comparison to Warren Buffett's investment philosophy. He outlines Bitcoin's advantages, such as its digital nature, global accessibility, and 24/7 trading capability, which make it an ethical and fundamentally useful asset. Saylor concludes by emphasizing Bitcoin's status as the 'greatest of assets,' highlighting its widespread recognition and trust, and its utility in various transactions across the globe.
Mindmap
Keywords
💡Bitcoin
💡MicroStrategy
💡ETFs (Exchange-Traded Funds)
💡Leverage
💡Convertible Debt
💡Volatility
💡Yield
💡Halving
💡Stock to Flow
💡Warren Buffett
💡Market Makers
Highlights
Bitcoin crossed the $70,000 mark for the first time on Friday morning, reaching above $72,000.
Michael Saylor of MicroStrategy discusses Bitcoin, emphasizing its attributes over gold and its potential to divert capital from risk assets.
MicroStrategy held about 200,000 Bitcoins at the end of the last month, showcasing their early and continued investment in the cryptocurrency.
Bitcoin is expected to be incorporated into various funds, becoming a structural part of investment portfolios.
The halving of Bitcoin's supply is predicted to reduce the number of natural sellers, potentially leading to an upward price adjustment to meet investor demand.
Investors currently view MicroStrategy as a proxy for Bitcoin, offering exposure without the need to buy the underlying coins.
The availability of ETFs for Bitcoin raises questions about how investors should perceive MicroStrategy in comparison to these funds.
MicroStrategy is likened to air freight in terms of performance, leveraging debt to buy Bitcoin and offering shareholders more Bitcoin per share.
The company's intelligent leverage strategy allows for non-recourse, unsecured borrowing to invest in Bitcoin, attracting capital and enabling further leverage.
MicroStrategy's approach provides upside in Bitcoin with downside protection, appealing to both max mist and hedgers.
Traders are attracted to the volatility of MicroStrategy's Bitcoin investments, which is unique as ETFs do not offer options trading or convertible bonds with protection.
Michael Saylor discusses the mathematics behind Bitcoin investment, emphasizing its superiority over gold, equities, bonds, and real estate.
Saylor's perspective is that Bitcoin is a better investment at lower prices, aligning with Warren Buffett's views on value investing.
Bitcoin's 24/7 global trading availability and recognition make it an ethical and useful asset,不受控制 by any issuer, company, or country.
The discussion on Bitcoin's halving and its impact on the Stock to Flow model, questioning if potential prices should be doubled based on this metric.
Saylor's confidence in Bitcoin as an investment, despite market fluctuations, and the rationale behind MicroStrategy's strategy.
Transcripts
BOX."
THIS MORNING BITCOIN CROSSING
THE $70,000 MARK FIRST TIME
FRIDAY.
THIS MORNING ABOVE $72,000.
JOINING US NOW TO TALK BITCOIN
MICHAEL SAYLOR.
STRATEGY -- MICROSTRATEGY AND
END OF LAST MONTH THE COMPANY
HELD ABOUT 200,000 BITCOINS.
MICHAEL, THANK YOU FOR JOINING
US.
YOU HAVE BEEN EARLY AND
COURAGEOUS AND YOU CONTINUE TO
DOUBLE DOWN.
I WANT TO TALK ABOUT WHERE YOU
THINK BITCOIN IS, BUT ALSO I
WANT TO TALK ABOUT HOW YOU THINK
ABOUT A MICROSTRATEGY, YOUR
COMPANY HAS A PROXY FOR BITCOIN
NOW THAT ETFs ARE AVAILABLE TO
THE PUBLIC.
>> SURE.
WELL, I THINK I'D START JUST
WITH BITCOIN.
BITCOIN IS CERTAINLY A LEAST
DIGITAL GOAL AND GOING TO EAT
GOLD.
HAS ALL GREAT ATTRIBUTES OF GOLD
AND NONE OF THE DEFECTS OF GOLD.
IF YOU COULD TELEPORT GOLD FROM
NEW YORK TO TOKYO IN A FEW
MINUTES, PEOPLE WOULD LIKE IT.
IT'S GOING TO DIVERT CAPITAL
FROM RISK ASSETS AND RISK ETFS
LIKE SPY AND YOU CAN SEE THAT
THESE ETFs ARE DOING THAT.
IT'S GOING TO BE INCORPORATED
INTO A LOT OF FUNDS LIKE A
BLACKROCK GLOBAL OPPORTUNITIES
FUND OR STRATEGIC INCOME
OPPORTUNITIES FUND, AND SO AS --
IT'S AN ASSET CLASS.
AS IT GOES INTO OTHER FUNDS IT'S
GOING TO BECOME STRUCTURAL.
THE HAVINGs WILL CUT ORGANIC
SUPPLY OF SELLERS IN HALF BY
APRIL 20th MEANING ONLY ABOUTS
3DS 1 MILLION, $32 MILLION A DAY
OF NATURAL SELLERS.
THE PRICE OF BITCOIN WILL HAVE
TO ADJUST UP TO MEET THAT
INVESTOR DEMAND.
I THINK THAT'S WHAT'S HAPPENING
NEXT TO THE ASSET CLASS N. TERMS
OF HOW INVESTORS SHOULD THINK
ABOUT YOUR COMPANY AND RIGHT NOW
I THINK THEY THINK OF IT AS A
PROXY IF BITCOIN.
A WAY FOR INVESTORS, FRANKLY,
WHO DIDN'T WANT TO BUY THE
UNDERLYING COINS TO GET ACCESS
TO BITCOIN AND EXPOSURE TO
BITCOIN.
THE QUESTION NOW, THOUGH, THAT
THESE ETFs ARE APPROVED AND
FOLKS ARE FUNNELING MONEY
TOWARDS BLACKROCK AND SO MANY
OTHERS, HOW SHOULD THEY THINK
ABOUT YOUR COMPANY VERSUS DOING
THAT?
>> YEAH.
SO BLACKROCK IS LIKE THE
CONTAINERSHIP OR THE SUPER
TANKER OF BITCOIN.
THEY CAN TAKE A BILLION A DAY
INTO THEIR CAPITAL STRUCTURE AND
CAN HAUL THAT EFFICIENTLY.
25 BASIS POINTS.
MICROSTRATEGY IS LIKE
AIRFREIGHT.
HIGHER PERFORMANCE.
SO WHAT'S GOING ON HERE?
MICROSTRATEGY HAS LEVERAGE.
IF WE BORROWED $860 MILLION AT
62 BASIS POINTS, IS THERE ANY
COMPANY IN THE WORLD YOU
WOULDN'T LIKE TO INVEST IN THAT
COULD BORROW A BILLION DOLLARS
LESS THAN 1% INTEREST TO BUY
INTO YOUR BEST IDEA?
WE GET INTELLIGENT LEVERAGE.
NON-RECOURSE, UNSECURED AND THEN
BUY BITCOIN WITH IT.
THAT LEVERAGE GIVES VOLATILITY.
THE, GIVES PERFORMANCE.
THE PERFORMANCE GIVES US
VOLATILITY.
THAT ATTRACTS CAPITAL AND WE CAN
THEN LEVERAGE MORE.
IT'S KIND OF INTELLIGENT,
BECAUSE IT'S CONVERTIBLE DEBT.
IT'S -- IT'S GIVEN OUR
SHAREHOLDERS MORE BITCOIN PER
SHARE THIS WEEK THAN THEY HAD A
FEW WEEKS AGO.
SO IT'S VERY CREATIVE FOR THEM
AND COMPELLING FOR EVERY
INVESTOR.
IF YOU'RE BITCOIN CURIOUS RIGHT
NOW AND WANT TO BUY BITCOIN AT
THE ALL-TIME HIGH HOW DO YOU GET
UPSIDE IN BITCOIN WITH DOWNSIDE
PROTECTION?
MICROSTRATEGIES SOLD $800
MILLION IN DEBT AND WE HAVE $12
BILLION, $13 BILLION OF BITCOIN.
BITCOIN MAX MIST AND LOVE IT AND
WANT TO HOLD IT FOREVER ETFs
CHARGE 25 BASIS POINTS.
MICROSTRATEGY IS GIVING YOU A
YIELD AGAINST YOUR SHARES.
AND A TAX-EFFICIENT FASHION.
SO MAXIMUS EQUITY, HEDGERS, LIKE
THE UPSIDE WITH DOWNSIDE
PROTECTION.
THE TRADERS LOVE THE VOL.
100 VOL ASSET AND THEY LIKE
THAT.
WE'RE UNIQUE, BECAUSE YOU CAN'T
REALLY TRADE OPTIONS ON THE ETFs
AND THAT ISN'T GOING TO ISSUE A
CONVERTIBLE BOND WITH UPSIDE TO
BITCOIN WITH DOWNSIDE
PROTECTION.
>> SO, MICHAEL, I TRY TO
UNDERSTAND THE MATHEMATICS AND I
KNOW PEOPLE LIKE YOU, WENT TO
M.I.T. AND IT JUST SEEMS --
MAYBE IT'S MORE UNDERSTANDABLE
FOR YOU OR ANDREESON OR PETER
THIEL OR EVERYBODY, BUT AT 17
DOWN FROM 68, AND YOU KNOW YOUR
LEVERAGE AND EVERYTHING ELSE.
DID YOU EVER WAKE UP IN THE
MIDDLE OF THE NIGHT AND HAVE ANY
DOUBT WHATSOEVER, THAT'S MY ONE
QUESTION?
I WAS THINKING ABOUT YOU AT
17,000 AND LOOK AT IT NOW AND
IT'S -- I JUST CAN'T BELIEVE
WHAT THE, THE MARKUP YOUR
COMPANY IS BASED ON IT NOW.
I GUESS THE OTHER THING IS, WHEN
IT HALVES SHOULD WE, LOOK AT IT
ON STOCK TO FLOW, DO WE HAVE TO
DOUBLE WHAT THE POTENTIAL PRICE
IS BASED IF YOU USE THAT METRIC?
IS THAT A VALID METRIC TO USE
AND AMPS HAVING SHOULDN'T BE
THAT IMMEDIATE IF IT'S AT 62
NOW?
>> TWO GOOD QUESTIONS.
THANKS FOR ASKING ME.
WITH REGARD TO BITCOIN, NO DOUBT
IN MY MIND BITCOIN WAS A BETTER
INVESTMENT AT 17,000 THAN AT
65,000.
I TAKE THE WARREN BUFFETT VIEW
ON THIS.
BITCOIN SUPERIOR INVESTMENT TO
GOLD, EQUITY BONDS AND REAL
ESTATE BECAUSE IT'S DIGITAL.
TRADE IT 1 MILLION TIMES FASTER
THAN CONVENTIONAL ASSETS USING A
COMPUTER.
IT'S AVAILABLE.
MOST OTHER ASSETS ONLY TRADE
LESS THAN 20% OF THE TIME.
BITCOIN'S TRADING 168 HOURS A
WEEK.
WE BOUGHT 800 MILLION DOLLARS OF
BITCOIN AND A LOT OF IT -- WE
BOUGHT OVER THE WEEKEND WHEN ALL
OF THE CONVENTIONAL MARKETS ARE
CLOSED.
IT'S GLOBAL.
IT'S THE MOST WIDELY RECOGNIZED
AND TRUSTED INVESTMENT ASSET IN
THE WORLD RIGHT NOW.
IT'S ETHICAL, BECAUSE IT'S THE
KING OF ALL COMMODITIES.
THERE'S NO ISSUER.
THERE'S NO COMPANY, THERE'S NO
COUNTRY CONTROLLING IT.
AND FUNDAMENTALLY IT'S USEFUL.
THOUSANDS OF MARKETMAKERS CAN
TRADE IT ALL THE TIME.
MILLIONS OF COMPANIES CAN TRADE
IT.
BILLIONS ARE PEOPLE.
IF YOU WANT TO BUY A HOUSE ON
SATURDAY IN AFRICA, THIS IS THE
WAY TO DO IT.
IF YOU WANT TO BUY A CAR ON
SUNDAY MORNING, THIS IS THE WAY
TO DO IT.
SO IT'S A PRETTY GREAT ASSET.
IT'S THE GREATEST OF THE ASSETS,
IN MY OPINION, THERE'S NO
SECOND-BEST ASSE
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