Bitcoin has 'all the great attributes & none of the defects' of gold: MicroStrategy's Michael Saylor

Summary

In 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

00:00

🚀 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.

05:01

🤔 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.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. In the video, Bitcoin is portrayed as a superior investment to gold, equities, bonds, and real estate due to its digital nature, global accessibility, and 24/7 trading capabilities. It is also highlighted as having attributes similar to gold but without the physical limitations.

💡MicroStrategy

MicroStrategy is a company that has been actively investing in Bitcoin and is mentioned in the script as holding about 200,000 Bitcoins. The company is positioned as a proxy for Bitcoin, offering investors exposure to the cryptocurrency without directly purchasing the coins. The script discusses MicroStrategy's strategy of leveraging debt to acquire Bitcoin and the benefits this brings to shareholders.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on stock exchanges, similar to individual stocks. In the context of the video, the availability of Bitcoin ETFs to the public is discussed as a significant development, as it provides a new avenue for investors to gain exposure to Bitcoin. The script also compares the efficiency and costs of investing in Bitcoin through ETFs versus through MicroStrategy.

💡Leverage

Leverage in finance refers to the use of borrowed capital to increase the potential return of an investment. The script describes how MicroStrategy has used leverage by borrowing money at low interest rates to invest in Bitcoin, which has the potential to amplify returns but also comes with increased risk due to the volatile nature of Bitcoin.

💡Convertible Debt

Convertible debt is a type of debt that can be converted into equity or shares of the issuing company. In the script, MicroStrategy's use of convertible debt to finance Bitcoin purchases is highlighted as an intelligent strategy, providing upside potential with downside protection for investors.

💡Volatility

Volatility refers to the degree of variation of a trading price series over time. The script mentions that the leverage used by MicroStrategy introduces volatility, which can be attractive to certain types of investors, such as traders, who may benefit from the price fluctuations of Bitcoin.

💡Yield

Yield in finance refers to the earnings an investor realizes on an investment. The video discusses how MicroStrategy offers a yield to its shareholders in a tax-efficient manner, which is an attractive feature for investors looking for both exposure to Bitcoin and income from their investment.

💡Halving

The Bitcoin halving is an event that occurs approximately every four years, reducing the reward for mining new blocks by half. The script mentions the potential impact of the halving on the supply of new Bitcoins, suggesting that it could lead to a reduction in the number of natural sellers and an upward adjustment in Bitcoin's price to meet investor demand.

💡Stock to Flow

Stock to Flow is a model used to analyze and predict the price of commodities, including Bitcoin, based on the current stock (amount in existence) and the flow (new production rate). The script questions the validity of this metric for predicting Bitcoin's potential price and its applicability after the halving event.

💡Warren Buffett

Warren Buffett is a renowned investor and the chairman and CEO of Berkshire Hathaway. The script references Buffett's investment philosophy, suggesting that Bitcoin is a better investment at lower prices, and it uses this to argue that Bitcoin remains a superior investment even at higher price points.

💡Market Makers

Market makers are firms or individuals that stand ready to buy and sell securities or commodities at any time, thus providing liquidity to the market. The script highlights the role of market makers in trading Bitcoin, emphasizing its utility and the constant availability for trading, which is a key attribute of Bitcoin as an asset.

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