LIVE: CNBC chats with MicroStrategy founder Michael Saylor and Blockstream CSO Samson Mow — 11/11/21

good morning everyone i'm deirdre boza

in san francisco i'm thrilled to be

joined this morning bye

i think they're going to come up there

he is michael saylor the man and samson

mao it is such a pleasure to have both

of you i think that this is one of our

most popular live streams before it's

even kicked off a lot of anticipation

how are you both

awesome

happy bitcoin great happy bitcoin day

although coming up a little bit from

those all-time highs um let's jump right

into it michael last time you were on

cnbc you said

that bitcoin would go up forever i want

you to clarify those comments does

anything go up forever do you stand

behind that

yeah my point is that bitcoin's never

going to be more than 21 million bitcoin

so it's a very fixed supply it's the

only scarcity that anybody can invest in

the world every other asset that you can

buy as an inflation hedge like real

estate or stocks or gold or commodities

all of those things have a supply that's

going to increase as the price goes up

but you can't increase the supply of

bitcoin so if you look at the world

currencies they're inflating at 10 10 or

more a year for the past 30 years maybe

as much as 14 a year you can expect

they'll keep inflating for the next 30

years and so bitcoin measured in

currencies of the world and in currency

derivatives it's just going to keep

going up with volatility albeit

sure but forever samson nothing goes up

forever you don't you have a fixed

supply of gold as well i mean this

sounds like something someone might say

at the peak you could argue gold is not

fixed deirdre right gold is increasing

in supply at two percent a year in the

physical regime and

bankers can re-hypothecate gold and they

can print 100 ounces of paper gold for

every real ounce of gold and so

bitcoin is the dominant digital monetary

network and because it's dominant and

because it's fixed it means that it's

the it's the most reliable highest

integrity scarcest thing in the

financial universe it's going up does it

go forever

i'm i'm stuck on this point i want to

hear both of you say or not say that

it's going to go up forever samson go

ahead it's going up forever deirdre

forever

i mean

michael do you agree with that you're

going to stand behind that comment going

up forever bitcoin is going up forever

deirdre forever come on

something someone would say at the peak

no i mean

michael didn't you say before it would

hit 5 million 5 million is not infinity

deirdre in argentina the dollar used to

trade at a dollar per peso and now the

dollar is approaching 200

pesos the dollar is going up forever

against the peso the dollar has gone up

forever against against the venezuelan

bolivar

so a strong asset is going to go up

against a weak asset forever and since

we know that nobody in the universe can

create any more bitcoin and since we

know that everybody every political

nation state is going to create more

currency

it isn't

it isn't really that much of a stretch

to say that measured in the currencies

of nation states bitcoin is just going

to continue to appreciate

the only reason it would stop going up

forever is if central banks stop

printing money and that's not something

they can do the only thing they can do

is print money at a slower pace but

they're still going to print money

thereby bitcoin is going up forever and

let me let me move away from i'll make

one other point if you're trying to

model the price of bitcoin the price of

bitcoin is a function of inflation right

if i double the amount currency then

you've got a natural boost against a

scarce asset it's also a function of

technology right we're building bitcoin

into every iphone and android phone on

the planet like in el salvador they

delivered it to three million people in

three weeks so as the utility of the

asset increases that drives adoption

and so if you increase the number of

users by a factor of 10 if you bring 10

billionaires with a billion dollars of

capital each on the network right as you

bring corporations on the network and as

you improve the utility the price just

keeps appreciating for all those reasons

even if we stopped printing any money

and we had zero inflation rate the

utility of digital property that moves

at the speed of light that can be

programmed a million times a second is

clearly higher than gold or higher than

any other monetary asset you can hold

both of you have talked about bitcoin as

sort of an asset class a store of value

but you know we've already got some

comments from our viewers that says that

perhaps bitcoin doesn't have the kind of

technological usefulness as an ether how

would you respond to that samson

[Laughter]

well ether and ethereum is completely

mutable they can change the rules at any

time

so a few months ago they changed their

monetary policy to be deflationary so

they're trying to burn ethers to

prop up the price but to me that's just

like any central bank fiat money someone

or some group of people they're able to

manipulate the supply they're if they're

able to make it more scarce they're able

to make it more abundant it's just

whoever wants to change at any given

time they can

change it had this hard fork um back

when they were hacked with the dao that

was when they actually rewrote the whole

rule set and

basically took the money back from the

hacker saying you can't steal from us

we're going to change the rule this sort

of thing can't happen with bitcoin

bitcoin is actually immutable and when

you're trying to be money

you don't want to be mutable you don't

want to be changed because we have this

like this is in human history for scarce

hundreds of years more abundant it's

just whoever wants to change at any

given time they can

change it had this hard fork um back

when they were hacked with the dao that

was when they actually rewrote the whole

rule set and

basically took the money back from the

hacker saying you can't steal from us

we're going to change the rule this sort

of thing can't happen with bitcoin

bitcoin is actually immutable and when

you're trying to be money sam so i think

you're feeding back through this just

one of the changes yeah

you're that's really weird

i just i was very confused also you

might have your twitter open or

something and you're feeding back for

our

have stream oh you know what i actually

it was me i'm admitting it i'm sorry

guys

okay

just feeding back

i want to take a shot at this

but i

there's so much to get to though michael

also i i also want you to talk about you

mentioned you know its uses

if it goes into iphones etc we have that

comment from tim cook saying that he

personally you know holds some

cryptocurrencies but he kind of threw

cold water on the idea of apple ever

having it in its reserves where does it

do you think for like major ceos and

your perfect person to ask on this

michael does it go from sort of a

personal interest to actually being on

the balance sheet of multi-billion

dollar trillion dollar companies

i think the most interesting thing in

this year is that every public figure

every public ceo every politician is

being forced whether they're going to

integrate bitcoin into their nation

state and to their currency into their

company into their technology that's the

story no one's asking whether they're

going to integrate gold or integrate

silver or integrate silicon chips right

bitcoin is the story i think that over

time more and more companies are going

to integrate bitcoin into their balance

sheet and they're more and more

companies going to integrate bitcoin

into their products and their services

and their technology what's that

inflection point i mean from it to take

a specific example tim cook thinking

about it personally to thinking about it

in terms of his company like when does

that happen i think we've got a we had a

big inflection point in march of 2020

with covid and that accelerated the

adoption of the institutional adoption

of bitcoin because it gave companies

like mine a reason to buy billions of

dollars of it and i think the second

inflection point is the past month

where it's very clear to every

institutional investor and every

mainstream company

that the administration supports bitcoin

the senate supports bitcoin congress

supports bitcoin the treasury department

supports bitcoin it's digital property

you can hold it it's going to come into

the normal regulatory regimes

and so i think a lot of people are

waiting for that

with a caveat i mean

yeah they're thinking about it but this

maybe moves us on to another topic too

of regulation right a lot of that

has is remained to be seen and we have

this infrastructure bill with the crypto

provision that a lot in the ecosystem

did not like but that went through

samson you know what does that tell you

well it just tells me that

the regulators are going to try to

regulate and

maybe it is for

the goal of protecting people

i think also if we want to talk about

etfs i think the sec is worried about

approving a spot bitcoin etf because

they don't want to

accidentally pump the price of bitcoin

to a million dollars a coin i think if a

spot etf went through tomorrow that

would probably happen and that's why

they're testing the waters first with a

futures etf a bit more watered down but

uh i think the concern is really that

they don't want to

accidentally pump bitcoin to the moon

okay and maybe michael can you speak to

the provision and the infrastructure

bill what does that mean for the

community is that a setback

i think that there's two ways to see the

world there's the crypto world the

crypto world would like to issue their

own securities and create their own

banks and create their own stock

exchanges

and not be subject to the cftc the sec

or the treasury department and uh they

would just like to recreate the world

anew there's the bitcoin view of the

world which is we've got digital

property

all we need to do is plug it into every

existing insurance company existing

finance company existing bank existing

country existing technology so bitcoin

is the solution for apple to make a

trillion dollars whereas in the crypto

world they want to rip apple to zero and

reinvent everything and so

i think that the bill is actually going

to expand

michael which i kind of see that as sort

of the evangelist believer right in

crypto they want to rip apart everything

we have and rebuild it new in a

decentralized way look my view is that

bitcoin can be paired with jp morgan and

make jp morgan a better bank it can be

paired with the us dollar and make the

us dollar a better currency it could be

bitcoin can be paired with the existing

power structure and the existing world

as we know it today and make everything

better you don't need to rip everything

down and rebuild it so i think that

there's a schism here the crypto world

is about rebuilding everything we don't

we don't want regulation we don't want

taxation we don't want government and

there's another way to see the world

which is let's just fix the capital

structure or fix the underlying

foundation of the world economy with the

digital asset which is bitcoin and then

let the world evolve to something better

samson does that make michael a true

believer i mean a core tenant of the

crypto ethos is that everything is

decentralized and you cannot do this

through existing traditional

institutions where

many people have you know historically

gotten a bad deal isn't crypto supposed

to fix that well

bitcoin is the only crypto that is

decentralized and i think it's not

really about tearing things down it's

about how do we

live together like the regulation

it seems very

heavy-handed a bit poorly thought out

and i think that's just endemic to the

legacy system and you know speaking as

the the the michael sailors

crypto people i don't think that uh we

want to tear things down but

bitcoin cannot uh comply

with all of these regulations

and and backwards schools of thought

right now like it's more likely that

nation states and institutions and

governments are going to bend to

bitcoin's will and comply with bitcoin's

consensus rules more than anything else

and even there you see banks

capitulating uh you see nation state

adoption uh it's just on the precipice

we have el salvador already and there

are going to be more it's not going to

be the other way around because bitcoin

can't negotiate you cannot negotiate

with bitcoin

yeah i guess on the other side though

you've seen you know places like china

and india really crack down michael do

you think that when we talk about

regulation and who's who's writing it

who's looking at it do you think that

the people on the u.s side in the

administration like gary gensler the

chair of the sec is the right person

to be

looking at it to be making regulation do

you think that he has a good enough

understanding of the market and what it

needs to flourish or be safe i think

i think

i think the administration is quite

qualified and i think when they look at

the world what they see is

bitcoin is property

and

it should be uh it should be treated as

property i think they look at stable

coins and they think that stablecoin

should be issued by banks and be treated

as money markets in cyberspace

and it should be subject to banking

rules i think they look at security

tokens and they think they should be

treated as securities and i think they

look at uh at the trading and they think

if you're going to trade derivatives or

securities they should come under

existing commodities and securities laws

and if they do all those things if

that's the way the world looks at this

then

the entire

the entire ecosystem is going to grow

stable coins are 130 billion dollars

right now and if if jp morgan and

citigroup start issuing stable coins

we're going to go to a trillion dollars

and then 10 trillion dollars and then

100 trillion dollars so so i i don't i'm

not at all concerned about what's going

on i actually think it's going to

accelerate

the adoption of bitcoin as the world's

reserve asset i think it's going to i

think it's also going to provide a

foundation for the 21st century economy

that's for the good of everybody i'm not

troubled by uh by what's happening uh if

you're an entrepreneur and you want to

be a bank and you don't want to get a

banking license and you don't want to

comply with existing

treasury cftc and sec rules then you

might be concerned about them having an

interest in you but on the other hand we

have 500 trillion dollars of stuff in

the existing system and i think it's i

think it's more important that the

existing banks the existing companies

the existing countries adopt the digital

uh the digital asset economy than it is

that uh

that they stay out of that system right

so you're talking about working within

the existing framework samsung this is

you know a fascinating point for you if

banks become

the predominant stablecoin issuers what

happens to the existing ones

like tether and usdc

damn it i had a bet with uh stuart and

apollo it took us 16.

they didn't want to take my bet they

didn't want to take the bet they said

that it's going to be mentioned i could

have won like a bitcoin each from them

but anyways um

uh

i think it's a question of how

a a central bank or a bank issued

stablecoin is going to function the the

reason why the u.s dollar has this

hegemony in the world is because it's a

very free money a nation another nation

state can adopt the u.s dollar as its

own national currency

um it's used around the world it's moved

freely around the world there's no

restrictions

but if you look at uh let's just take

central bank digital currencies as an

example

the the government of canada they issued

they posted a job posting to hire a

developer to work on a canadian central

bank digital currency and in the job

posting they're basically saying we want

it to be cash but not too much like cash

so

the question really is how freely

moving will a bank issued stablecoin be

is it going to be able to be used

anywhere in the world is it going to be

transactable by anybody in the world are

people going to be able to extend it

with new technologies like the lightning

network or whatever

but if you if you look at just like the

history like it doesn't bode well for

that they're going to add a lot of

restrictions it's going to be

uh very difficult but as you say

history doesn't bode well but as you and

both michael and many others would say

we are very very early and michael you

seem to allude to the idea that the

regulators know what they're doing and

they want sort of a more legit stable

coin that operates like a money market

fund that's right

dear dr i'm an optimist and i actually

believe that bitcoin can fix everything

and that technology makes the world a

better place i'm an optimist gary genser

taught a class at mit on blockchain and

money right nobody in the administration

understands digital technology better

than him

and and we've got two possible views

right one view is wouldn't it be nice if

stable coins were used for international

remittances by global multinationals by

what if the us dollar was used by eight

billion people on the planet

in a friction-free fashion right and

what if the entire world economy of a

hundred million companies and eight

billion people all evolved to something

better but if we're gonna evolve as

something better then governments need

to adopt it and get comfortable with it

like the united states government and

the banking sector and the financial

sector and publicly traded companies

need to be able to handle it and i think

the objective of the administration is

to bring this technology into into a

regulatory framework such that the

entire world economy can avail

themselves of the benefits of money

moving at the speed of light

that's what's going on here i don't

think anyone's arguing with the

usefulness of that idea but i guess what

you're talking about michael too is

trust has to be such an important

component of this if you're gonna have a

stable coin that is used for

transactions internationally it's gonna

be pegged to the u.s dollar

you have to be able to trust that stable

coin right samson yeah i i think it's

backing it there's a lot of trust in

tether um

by going back to michael's point like

stable coins are already used for

worldwide commerce i don't think it's as

apparent

to people in north america perhaps but i

was in dubai recently and i was talking

to several um otc traders there and

there is about half a billion dollars of

tether usdt trades every day usdt to

durham and this is like durham's to usdt

uh either in the form of cash or bank

wires etc but there's already a massive

market you could buy a house in dubai or

apartment in dubai with usdt so it is

already happening i think it's just

going to keep accelerating and i think

there is a but it is happening samsung

but you know we're talking about two

very different things here michael's

talking about stable coins becoming more

mainstream being issued by banks and

perhaps

it's central bank you're talking about

the current state of usdt or even you

could choose another one which is being

used not not in the mainstream sense at

all yet

well it depends like i was also in

turkey and you know there are money

changer shops there with the big tether

logo so i think there's a wide degree of

trust behind this and the the fact that

they're at 70 i don't know it keeps

going up every day 74 billion dollars

now of issuances that just speaks

volumes about how much trust i think i

think

the point here is that no one's

questioning the credit worthiness of jp

morgan and bank of america

and citigroup so at the point

that at the point that the regulators

give a green light to major banks in the

world to issue hundreds of billions or

trillions of dollars of digital assets

which happened last week which happened

last week at that point you're you're

beckoning the entire world financial

system to embrace digital technology and

you'll know that we got there when

amazon moves 100 billion dollars back

and forth on digital rails we've we've

been locked in this non-stop debate over

whether tether is reliable for four

years endless debate it's holding the

industry back and we need to get to the

point where people have tens of

trillions of dollars of money moving

around without the debate about whether

or not it's credit worthy or not so

tethers holding the stablecoin industry

back is that what you're saying michael

no i'm not saying that i'm saying that

if tether wants to be tr as trusted as a

bank they should get an fdic license and

they should get an auditor and they

should publish their reports and they

should subject themselves to a regulator

just like every other bank in the

western world does it and then they'll

be treated like every other bank in the

western world and that is what the

administration is saying samsung respond

to that because i also want to let our

viewers know that bitfinex the company

the parent company of tether is a major

investor in your company and i know that

you've defended tether before so yeah

how do you respond to what michael just

said

oh i think the i believe in free markets

and i think the free market has already

spoken and i think tether is very

ubiquitous and you know to pull a quote

michael's saying michael's saying that

it's being held back let me finish let

me finish so to pull a quote from the

social media and the social network you

know when they said uh if you when mark

zuckerberg in the movie said if you

would have been if you invented facebook

you would have invented facebook right

if the if the banks could have done a

stable coin they would have done a

stable coin i don't see them being able

to replicate the network effects of

tether like

they could have done that they could

have banked the unbanked they could have

let people in turkey use a us dollar a

savings account but the fact is you

can't do that so unless they can do that

with their existing system i just don't

see a way they can do it with the news

to michael's point does heather want to

go from what 75 billion market cap to

hundreds of billions to potentially

trillions does it want to be the

mainstream

stable coin is it does it need an audit

does it need a bank charter to be able

to do that

michael's sort of saying that the

company that will do that the stable

coin that is willing to do that is going

to be the one ultimately in the future

that's going to be the one that's mostly

used well i think we differ on opinion

there i think the freest money will win

just like the us dollar

with its strong cash component and

liquidity is a winner i think uh a free

market decided

winner of stable coins is going to win

so samson let me ask you have you seen

tethers reserves yeah i saw them i went

to the big bank vault and paolo dove in

like uh

like

your school around in the dollar bills

but no in all seriousness you have seen

you have seen because they're an

investor in your company i would think

that you would want to see what's sort

of backing it you have seen what kind of

commercial not that you're going to tell

us now but you have personally seen what

kind of commercial paper

what makes up no i haven't but nobody

sees money like the money doesn't really

exist they're just numbers injected into

a spreadsheet so even if tether has

money in the bank we'll do some money

they don't they don't see there's no

bank vault with paper bills right

there's not that much paper i mean

michael would you would you allow

someone to invest or take a piece of

your company when you didn't know what

was backing what was behind that company

no

let me let me make a point here which i

think is constructive you have a you

have uh the crypto economy which has

been entrepreneurial

and has been a bit opaque and and

under-regulated or unregulated for a

decade and it got to a few trillion

dollars

and now you have a struggle between the

past and the future and you've got a set

of institutional investors that have

hundreds of trillions of dollars and

will they come into the space you have a

set of institutional companies like

square and apple and google and paypal

and microstrategy that have

huge amounts of capital and technology

and brand and will they come into the

space and you have countries

like the united states

right like el salvador will they come

into the space and i think that we're

going to move from the first uh decade

which got us to about two to three

trillion if you want to get to 30

trillion you need to get to the point

where like microstrategy buys a billion

dollars we bought

3.1 billion dollars worth of bitcoin

okay you can't find any entrepreneur

that ever put 3.1 billion of capital

into anything in the entire crypto

system and yet we're a small company so

i think the next stage is about laying

the framework such that the ray dalios

of the world will buy five billion in

bitcoin or 10 billion of bitcoin or when

fidelity actually shifts 500 billion

dollars right they got 11 trillion when

they ship they have two trillion dollars

worth of fixed income funds

when 25 of that flows into bitcoin

you're going to see a different world

and you're not going to get there if you

have a never-ending debate about is that

a security

is that backed by real money and and can

is it regulated and i think gensler's

point is we need transparency with

regard to banks that issue digital money

we need transparency with regard to

exchanges that trade securities for the

public we need transparency with regard

to organizations that would issue their

own securities in the crypto economy

and uh and this stuff is it's well

understood

in the mainstream uh the mainstream

community like if you're if you're gonna

sell stock to the public or debt to the

public you have to file your statements

and you have to you have to go through

regulatory compliance

what's happening right now is the entire

crypto world is going to go through

this evolution to become

more compliant and more

institutionalized and it either will

make it through that and grow by a

factor of 10 or it will not make it

through that gate and it will it will

have its uh growth uh impaired

right but the traditional system you

know was built in good faith and people

got

got left behind along the way and

there's that fear that if you use the

traditional systems to you know make

them better that that's going to turn

into the same thing i guess that's the

argument of tear it all down and build

an anew right samson is

what's preventing us from having these

sort of same issues if you're basically

just inserting bitcoin into the legacy

systems and

framework

i think that's probably where michael

sailor and i disagree a bit i don't see

the future as institutional money i see

it as the other you know

seven point something billion people

coming in because bitcoin is money for

the average person institutions you can

have some if you want you know pay

market price but i would rather see

people around the world mining bitcoin

uh transacting in bitcoin earning

bitcoin on a daily basis in this bitcoin

circular economy and we're starting to

see that in el salvador so it's very

interesting but deutsche i have a

question for you so heather tether is

going to publish an audit it's not a

matter of if it's just when and i think

in the coming months so when they

publish their audit will that satiate

you will you say okay tether is fully

backed and will you let that go or is it

always going to be this this point of

doubt for you i'm just questioning no no

it's not a point of doubt for me i don't

really doubt anything i just would love

to see what is actually behind it what's

backing and commercial paper and not

being able to answer certain questions

about where it is i'm just the i'm just

the interviewer i just ask the questions

i don't personally doubt or believe um

but i would love to see an audit and i

welcome

those guys back on when to talk through

it it would be great to have something

to point to i would certainly applaud

that as the short answer all right great

um

guys this has been such a great

discussion um we found some points of

agreement some points of disagreement we

started by both of you saying that

bitcoin is going up forever let me ask

you forever

we agree on that forever forever forever

raising the question of how fast yeah

and how is the rest of the economy going

to revolve around it we'll do let's do

this again let's say a few months from

now or say a year from now one year from

now how about where do you think at 100k

gonna be 100k for you samson we can do

it again when bitcoin hits 100k okay

yeah great michael are you down for that

sure

when does that happen when if we just

you know friendly friendly bet i would

say before q1 or in q1 next year

okay got it michael

soon

soon and there's no price too high that

you wouldn't be buying at right michael

i'll be buying it forever

okay we gotta we got a show to do but

thank you guys so much look forward to

talking to you when bitcoin hits 100k

thank you