Bitcoin has Emerged as the Institutional Safe-Haven Asset

Well, I think in the current macroeconomic environment, most corporations are beginning

to realize that their cash is going to be an appreciating asset, and they need to turn

their balance sheet into an appreciating asset.

So the obvious thing to do is to convert dollars that are being inflated, you know, expanded

15% a year into a scarce digital asset.

That's what Bitcoin is.

So Elon Musk is very progressive and Tesla is very progressive.

I think this is part of a trend toward the digital transformation of balance sheets as

people move from analog traditional treasury assets like cash and bonds into Bitcoin.

I want to say hello to Julia.

Oh, I was just going to say hello to Julia.

There's a few.

We'll throw the road here.

Let's double click on that.

You're talking about a digital transformation of the balance sheets.

Of course, we know, I guess historically, folks have been pretty conservative about the

balance sheet.

You did have a seminar last week.

I want to kind of elaborate a bit more on the pitch that you're giving to executives on

this.

And what is kind of the hurdle that must be overcome for them to get comfortable with adding

this digital asset to their balance sheets?

Well, I mean, the pitch is Bitcoin is digital gold, and it's sitting on the world's first

digital monitoring network.

That network does the job of gold a million times better than gold.

You can move it at the speed of light.

You can program it a million times a second.

And it's been appreciating versus the US dollar more than 200% a year on average for a

decade.

So I think at this point, Bitcoin is emerged as the institutional safe haven asset.

If you're a corporation and you generate a billion in cash flow and you buy back your

stock, you're a billion closer to insolvency.

If you borrow a billion dollars to buy back your stock, you're two billion dollars closer

to insolvency.

If you want to run your company to the benefit of your shareholders, of your customers,

of your employees, and of your local community over the long run, you can't decapitalize the

company.

And in the modern error, cash is becoming a liability because the money supplies expanding

at 15% and the purchasing power of the cash keeps degrading.

Holding a 15% degrading asset for eight years means you lose 75% of shareholder value.

So the pitch is convert your balance sheet from a liability into an asset to the benefit

of your stakeholders and use the world's first digital monitoring network to do it.

Bitcoin was engineered to do this.

I do want to kind of bring this topic up with you.

Elon Musk, of course.

It's been tweeting a lot about cryptocurrencies, doge, in particular, also adding hashtag

Bitcoin to his Twitter profile.

And if you look back a couple years ago, there are some issues around tweeting about Tesla,

taking Tesla private.

There's whole SEC settlement involved there.

So what do you think of regulations in this space?

And when you see more publicly traded companies add it to their balance sheet and how they

can kind of talk about it on social media, do you think we'll see regulations come in

and if so, what should those look like?

Well, I think there's been great advance in regulatory clarity over the past few years.

I think the IRS and the SEC have both designated Bitcoin as property.

And I think that's been very good for the asset class.

I think that we can expect a few more regulatory advances that will provide more clarity.

And as Bitcoin approaches regulatory parity with other types of assets like stocks and bonds

and gold, I think it's going to remove the few remaining

barriers that have given institutions pause.

I think a thousand institutions, a thousand corporations started adopting Bitcoin as an asset

for investment in the past 12 months.

I think there'll be an avalanche of thousands more that will be coming as they start to see

that this is a very high quality treasury reserve asset on parity with other assets.

It's one thing, Michael, to talk about companies investing in Bitcoin and seeing it take off

on Wall Street quite another to see it be adopted and go mainstream on Main Street.

Today, we saw Twitter's CFO come out and say in an interview that they're thinking about

playing in Bitcoin to the extent that they might actually pay vendors and employees in the cryptocurrency.

If they ask for it, what do you think some of the hurdles are to getting there?

How do we get the consumers to buy in on the idea that Bitcoin could possibly take on the US dollar?

Well, you know, I don't think Bitcoin is going to take on the US dollar.

I think that cryptocurrency is a misnomer.

Bitcoin's digital gold.

What Bitcoin is doing is rapidly replacing gold as a non-sovereign store of value.

We've already got something on the order of 120 to 150 million people in the world

using Bitcoin as digital gold.

I think that number is going to rapidly march through 200 million and we'll have a billion people

that want to hold digital gold on a mobile device in the next five years.

When you think about it, I think the right way to think of it is I want to convert my long-term

treasury reserves into something which is a million times better than gold that moves at the

speed of light and it doesn't matter if you're a company or you're an individual or an institutional

investor. They all have the same problem which is how do I preserve my monetary energy over long

periods of time? Expenditures day to day that you would normally do in dollars. People will continue

to do in dollars. The payment rails are going to be MasterCard and Visa and PayPal and SquareCash.

The euro and the dollar are going to do just fine.

I think that the people that ought to be really concerned are gold bugs.

Anybody that's storing their money in gold has got a big bulls eye on their forehead and that's

at risk. Michael, I guess one last question before they let you go. I should point out that you are

the longest-serving publicly traded CEO of an enterprise software company. Obviously,

experienced a lot. You mentioned earlier digital transformation. Now digital transformation of

the balance sheet. I want to bring this up with you and tie it in here. How do you think about

this generational shift? I've seen a survey a couple years ago. How more millennials favor

cryptocurrency Bitcoin things like that. As you go up and older generations, not so much. How do you

think about it? Is also a generational play here for companies? Well, I think the millennials

they discover things quickest. It was college students that found Facebook. Eventually,

everybody joined Facebook. I think it was 20-somethings that loved texting on mobile phones,

but eventually Warren Buffett bought Apple stock. I think that millennials love Bitcoin because

it's digital gold. There's no way that 100 million people can buy a bar of gold through their

mobile phone, but they are buying digital gold on SquareCash or PayPal or the like. But having

said it all, they're just the Vanguard. Eventually, the entire society is going to buy this.

Institutions are coming into it. The generation X's are coming into it. And so it's an idea whose

time has come. The millennials are leading the way.