We're Being Patient With Bitcoin, Michael Saylor Says

bitcoin is an already big and soon to

become

perhaps even bigger bet over at micro

strategy

the software company now owns so much

bitcoin its gains are worth some 1.4

billion dollars on paper i want to bring

back michael saylor ceo of microstrategy

to discuss michael always good to have

you here

on the show so you just reported results

beat on earnings

and revenue you're sitting on these

massive paper gains but racking up these

accounting charges for the bitcoin that

you're holding walk us through your

latest strategy

um well you know we're a lot leveraged

long bitcoin

we've got a 10-year view and our view is

that bitcoin is an

open digital property network

and one day billions of people are going

to hold digital property all our bitcoin

on their mobile phones

and so we just want to get there before

the billions of users get there

and we're patient bitcoins now at its

highest level since

mid-may forty thousand uh seven hundred

fifty dollars

at the moment why should investors

invest in microstrategy

rather than just bitcoin itself well

microstrategy is an operating company

and so we sweep

operating income into bitcoin

and we're also leveraged long so we

borrowed 2.2 billion dollars

at a blended interest rate of about 1.5

percent

interest so if you if you like bitcoin

then you definitely would like the idea

of owning 2.2 billion dollars of it

at one and a half percent interest if

you expect it to go up more than one and

a half percent a year then that leverage

is really working for you

so i think we've been very intelligent

about the way we put together the

leverage

and uh and we're unique in that regard

there is no publicly traded company

that's got our bitcoin position

with the ability uh to raise debt and

buy

bitcoin with debt now you have this

opportunity coming up with that at the

market

filing to sell another billion dollars

in new stock to raise funds to buy more

bitcoin what's the likelihood

that you will do that well i think in

time we will buy bitcoin

it'll just be a question of whether we

buy it with cash flows or with debt or

with equity

and that's all just a function of market

conditions and we try to do whatever is

going to be accretive for our

shareholders

uh i'm i'm very very bullish on bitcoin

long term

the developments of the past quarter are

wonderful for bitcoin and they're

setting up

a really nice um a really nice platform

for it to grow from

so what would market conditions need to

look like in order for you

to do that well you know as you can

imagine we're looking at the debt

markets all the time and the equity

markets and the bitcoin markets and the

option markets

and and we have to make decisions uh

subject to market conditions that are

going to be accreted to everybody

involved so

uh we make we make those decisions when

the opportunities present themselves

you'll know when we do it are you

looking at other coins are you looking

at

ethereum and i know that obviously

you're really optimistic about the

future

of bitcoin but it is a more narrow view

of what

uh you know the blockchain can be you

know we think that

uh holding bitcoin for the long term is

the highest upside

lowest risk strategy we can pursue

um you know some people think

diversification means buy other types of

cryptocurrencies or buy other kinds of

equities

we think that by holding bitcoin we're

diversified

because we can see bitcoin sitting on

the balance sheets of cities

states governments companies small

investors big investors

and ultimately we think bitcoin is going

to be the core to big tech

innovation at apple amazon and facebook

so we just want to be holding the

bitcoin

there's never going to be more than 21

million of them and we think that every

investor

and every company and every government

on earth can benefit

from bitcoin walk me through how you see

that

innovation at big tech companies around

bitcoin happening

at what rate did you say walk me through

how you see that innovation

happening at those companies that you

mentioned i mean facebook of course

uh you know tried to do libra didn't

work out so well

yeah so let's take examples of square

and paypal right now

um and even robinhood for the next 65

and a half hours you can't trade equity

and you can't get banking services and

you can't sell your real estate

you probably can't trade in gold either

what you can do

is trade in crypto and so bitcoin in

particular

is something that everybody can get to

24 7

365 and that's driving a lot of demand

to integrate

i think that you're also going to see

that bitcoin

is an international trust network and so

for

companies like twitter and instagram

facebook and youtube they have issues

with spam and cyber security

and one of the best ways for them to

eliminate spam and to upgrade cyber

security

is to integrate with bitcoin and

especially the lightning network

in order to create higher levels of

creditworthiness and trust

with all of the cyber counterparties

that are trading on their platforms

dorsey is making a big bet on crypto and

bitcoin with square and of course he's

also talked about how

bitcoin could be integrated into the

twitter platform that said there's also

this view that

you know the rise of the blockchain and

cryptocurrency is a threat to

centralized networks like twitter

you know how do you square that well

um i think that bitcoin is the solution

to cyber security at facebook and

twitter

and google and and if you wanted to

improve the quality of the user

experience

then you need to have skin in the game

and so bitcoin

provides skin in the game for all of all

of the interactors

in the cyber environment i think that

jack understands that

and that's why he's enthusiastic about

bitcoin being integrated into twitter

and i think that you're going to see

other big tech networks like facebook

and apple and google and amazon realize

that the killer app is is cyber security

integrated into an international trust

network

interesting what do you make i know you

were following robin hood's ipo

what do you make of robin hood becoming

a bigger player

in crypto you know obviously they've

talked about wanting to expand beyond

trading

crypto transactions becoming a bigger

piece of the pie

they mentioned doge in their risk

factors because

you know a significant amount of the

transactions in crypto on robin hood

involve dogecoin you know you know

what's your take on them

becoming more involved in this space

well you know crypto.com put out a

survey this week where they actually

showed that the number of users in the

crypto world went from 100 million to

200 million in four months

and the number of bitcoin users has

surged to 114 million

and they're adding two million bitcoin

users a week

so this is clearly where the excitement

is and where the traffic is

and since robin hood wants to reach out

and be engaged with as many people as

possible

i mean the only option you have for

engagement for the next

you know 50 hours is bitcoin

or some kind of cryptocurrency and of

course bitcoin

is the risk off king of all the

cryptocurrencies so

for robin hood it makes total sense that

they would

want to drive that hard now i know

you've talked about

10 years but when might microstrategy

sell some of its bitcoin to realize

these paper gains i mean are you saying

you won't do that

for 10 years or could that happen sooner

yeah i mean bitcoin is not really a

trading strategy

people joke it's an exit strategy what

we want to hold

is a form of non-sovereign store of

value

forever so it's like i had a billion

dollars and i want to give it to my

great grandchildren

i'm either going to buy land or i'm

going to buy gold or i'm going to buy

some other tangible property bitcoins

digital property

and so if i buy a billion dollars of

bitcoin there's no reason why i wouldn't

be holding it a hundred years from now

i took a survey the average twitter

follower thinks it's going to last

3500 years nobody's in a hurry with

bitcoin we're thinking that it's the

future of property