Credit, Michael Tassela, the CEO of Business Intelligence Software for Microstrategy,
was getting Tesla electrified on crypto,
who's currently owns more than $2.5 billion worth of Bitcoin.
Tweeter's mask back in December, urging him to sink Tesla's cash
into the alternative currency to saying, quote, Elon Musk,
if you want to do your shareholders a $100 billion favor,
convert the Tesla balance sheet from dollars to Bitcoin.
That tweet helped lead to Tesla's big disclosure yesterday.
Michael Sela, who believes other CEOs will soon follow Musk's high profile lead,
joins us now. Michael fantastic to have you on the show.
How should we view Tesla's decision and what it means for others?
Well, we're in an environment where the money supplies
expanding at 15% a year or more, and we expect that to continue for the next four to eight years.
So for corporations that are cash rich, cash is the dilutive asset on the balance sheet.
It's losing 15% of its purchasing power every year.
So by converting a non-performing asset into the best performing asset,
which is Bitcoin, they convert a dilutive asset into a creative asset,
and it's really good for shareholder value.
So you're basically saying you prefer to have volatile appreciation versus stable depreciation.
If the value of the dollar is falling, I think that's well put.
But what about the risk profile of Bitcoin?
I mean, if you're talking about treasury departments for these corporates and
Tesla, perhaps, is a separate issue.
Traditionally, what they'd invest in is short term instruments.
Hold it in cash because they want to preserve capital.
You know, the world before March of 2020 was a different world where we had low monetary
expansion and high interest rates.
And the world for the next eight to 10 years looks like a world where we're going to have low
interest rates, high monetary inflation.
And it's nearly certain that cash on the balance sheet is going to lose 75 to 80% of its
shareholder value. And so switching it out to a digital asset like Bitcoin, which has been going
up more than 200% a year on average for the past decade, it might be short term a little bit volatile.
And certainly it's new as a paradigm shift.
But if you're looking out for the long term interest of your shareholders,
you'd, I think they would prefer that you double their money every six months
than lose 75% of their money with the guarantee over the next eight years.
I mean, does you think the Federal Reserve should be asking big questions of itself here where
it's a better investment decision to invest in a asset that's what 13 years old versus something
that the government itself issues? I mean, I know this is part of the thesis why
people are getting so excited about Bitcoin and those that believe that
fiat currencies are being debased. But the Federal Reserve surely has to take action here when
this is the argument we're making.
Well, you know, I think the story here is that Bitcoin is digital gold and it's engineered
to be light gold but superior to gold in all aspects. And it's also the world's first
digital monetary network. So imagine a block of a billion dollars of gold that moves at the
speed of light that you can program a million times a second in order to provide a framework
for the 21st century finance system. This is monetary technology and just like all big tech,
it's making financial systems more efficient. I don't think it's going to replace the dollar.
I think that what's happening is Bitcoin is replacing gold as a non-sauver and store of value
running on a big tech network. How quickly do you think other corporates decide to
invest in digital assets like Bitcoin? And do you recommend diversifying? It's not just about
Bitcoin. There are other options. It took us months to work through the issues and we uploaded
our corporate playbook for Bitcoin and open-sorted to the rest of the world and now it just takes days.
Last week we had 7,000 different firms that tend to our Bitcoin for corporation summit.
The materials we've gone viral with a quarter million or more views in just a matter of days.
I think a thousand companies adopt the Bitcoin as digital gold after March of 2020 and there's
a stampede on in 2021. So it's a store you're going to hear.
You know if I look at you specifically in your software company and I look at your share price
and I look at the price of Bitcoin and the two charts basically match and so I guess a critic
would look at this and say actually your fundamental business now has become a sideline in your
your digital stock. What would your response be Michael? We have two strategies. One strategy is
to grow our software business and that that is a good business makes a lot of money and it is
growing and our second strategy is to acquire Bitcoin and Bitcoin is the emerging dominant digital
monetary network. It's going to be a hundred times bigger than Google or Facebook and when companies
like Amazon plugged into the internet you know people didn't say you an internet company or retail
company I think there are technology companies in the future. Everybody's eventually going to
plug into a digital monetary network like Bitcoin just like everybody eventually plugged into the
internet. But how do those two businesses connect that you're now in? Every business has a P&L
and it has a balance sheet and if your balance sheet is sitting in US dollars that are yielding
zero interest losing 15% of their value they're depreciating and so every single business can
convert their balance sheet from a depreciating asset to an appreciating asset that's good for every
shareholders. So look if we're running a company in Argentina and I told you the peso was going to
devalue against the dollar by 99% every business in Argentina would be wise to convert their pesos into
dollars on the balance sheet for the benefit of their shareholders. And that's such a great point to
make though I do love how we're comparing the United States now to Argentina. Well you know every
company has a basic balance sheet currency whether it's euros or dollars or something the
difference after March is that those fiat currencies are weakening at a more rapid rate in essence
the cost of capital tripled after March and so conventional treasury approaches that worked for
a decade have to be reconsidered and that's why you see a thousand companies embracing Bitcoin
is digital gold.