Saylor: Microstrategy Is A 100-Year Holder

Saylor describes Bitcoin as "digital property", rather than digital currency, maintaining that its main purpose is capital preservation.

Is bitcoin currency, or property?

Michael Saylor has taken the opportunity to explain his thesis for bitcoin in a 13-minute interview on CNBC's Squawk Box.

Saylor, whose company Microstrategy owns 205,000 BTC, did not disappoint. He laid out the case for bitcoin clearly and convincingly, articulating its place in the global economy, its nature compared to other asset classes, and its immediate competition.

Saylor describes Bitcoin as teleportable gold. While many people still think of Bitcoin as a currency, it is more accurately described as digital property. The most compelling use case for bitcoin is not as a transactional currency, but for capital preservation. This puts it in the same category as gold and real estate.

The conceptual shift from currency to property also reframes it for governments who may see it as competition. All of the controversial issues around crypto concern its use as a currency, while property ownership is near universal. Moreover, while you can own a billion-dollar building, no one buys a coffee with a fraction of an office block. While there's some utility as a tool for transactions, perhaps $1 trillion, as a store of value Bitcoin is worth $100 trillion.

This is the reason, Saylor says, that Bitcoin is going to eat gold and other risk assets.

Microstrategy Vs ETFs

Ever since it started buying BTC in 2020, Microstrategy has been a means for institutional investors to gain exposure to bitcoin in an easy and compliant way. The advent of spot ETFs opens up the ecosystem completely, but there are some big differences between MSTR and, say, IBIT.

One of the biggest differences from the ETFs is that Microstrategy is a strategic holder. While the ETFs are passive, simply doing what customers want, Microstrategy is a HODLer. Saylor says they have a 100-year timeframe; they're not looking to trade their portfolio.

Moreover, while the ETFs charge 25 bps per year, MSTR provides tax-efficient yield, meaning it offers far better value over the long term.

MSTR acts as a kind of leveraged bitcoin. The structure of the company and its approach means that the number of bitcoins per share actually increases over time. The company can sell shares to buy BTC when it's trading above the value of its underlying assets, and it has a cashflow from its software business, which it also uses to buy BTC.

Microstrategy Commits To Becoming “World’s First Bitcoin Development Company”
Not content with owning almost 1% of all BTC in existence, Microstrategy will now devote itself to developing Bitcoin software products.

Limitless Conviction

Asked whether he ever questioned the wisdom of buying bitcoin, Saylor says he never doubted the strategy, even when bitcoin dropped to $16,000. The crash "shook out the tourists", but as unashamed maximalists, they would have ridden it to zero, he says.

He calls it the best of all commodities. Its radical transparency means it has less uncertainty about it than any other asset. Finally, its lack of cashflows, often criticized by TradFi "experts", are a feature, not a bug: Without cashflows, there's no internal catalyst to drive it down, and no reason for it to fall in price.

Microstrategy shares are currently trading around $1,500, up 200% in less than two months.


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