The Solution to the challenges that face Meta

Bitcoin prices are still having a tough time reclaiming the $40,000 level with weak results

out of Facebook not helping investors sentiment.

Let's bring in a leading voice in all things crypto, micro strategy, CO, micro seller,

micro, always nice to see you.

Thanks for taking some time here.

Have you been frustrated with the price action in Bitcoin so far this year?

Now my time horizons a decade or more.

The answer to your question by the way as to what you do with your Bitcoin is you hoddle

your Bitcoin.

We're hanging out.

People buy Bitcoin because they want to buy an asset that they understand that might

have value in 100 years.

And the truth is there's no security trading on the NASDAQ or the New York Stock Exchange

right now that you can understand 100 years from now.

We got a long time horizon.

So yeah this is near term.

There's a lot of risk off volatility but I don't think that bothers any of true Bitcoin

or?

And we know that you are a true Bitcoin or of course Michael because we've talked to

you about it of course.

You tweet about it.

You've put it on the books that you're company and on in your personal accounts as well.

I would ask that when an individual buys Bitcoin and it goes down it has an effect.

When you put it on your balance sheet and it goes down it costs you right?

It costs you in terms of the accounting for your company because you get penalized when

it goes down but you don't benefit when it goes up until you sell it.

Yeah well I mean yeah go ahead your question.

I mean what do you think accounting rules need to change on that front?

I mean indefinite intangible accounting means that you can only market down.

You can never market up and in truth I'd be better off from an accounting point of you

to buy a stack of comic books or baseball cards because I would only be evaluating them

for impairment once a year as opposed to every minute on a Saturday night why people

are skittish about a risk off trade.

So I think that the gap accounting isn't a positive factor for a company that relies heavily

on it.

I believe that FASB is taking this up as an issue.

We'll see what they say.

Clearly it would be better if there are fair value accounting for a publicly traded company

and if we ever see a transition from indefinite intangible to fair value accounting that would

be a catalyst for more corporate option of Bitcoin.

But could it also in a sense allow companies who are going to add Bitcoin to their balance

sheets to sort of quote unquote cook their books or to make things look better than they

are.

I guess you could argue on the flip side things maybe look worse for micro strategy than

they are right now because of that other accounting.

I mean with a current accounting for when Berkshire Hathaway accounts for their ownership

of Apple stock they do it via fair value accounting.

So I think that either accounting is appropriate if everybody agrees that's what they're

going to do and then the accountants close the books at the quarter and they account

for the assets based upon that guiding set of principles.

Michael do you see yourself despite any accounting issues as it pertains to how you account for

Bitcoin do you still see yourself using leverage at some point to go out there and enlarge

more Bitcoin products and perhaps change your strategy at the company.

We have used leverage and if you could borrow money at 1% interest or 2 or 3% interest

and if you thought that assets were going to appreciate a dramatically higher rate

than it makes total sense.

I think we're in an inflationary environment.

The odd time pace has lost 93% of its value over 4 years.

In Lebanon they've lost 93% of their currency value almost overnight.

In environments like that it's almost criminal not to use leverage.

You should borrow in the local currency and then you should buy a stronger asset.

In the United States I think you can expect a 15% or more monetary inflation rate for the

coming few years.

So if you could borrow money at substantially less than 15% then your arbitrage is clear

and obvious.

So yeah we think it's a good idea if properly used.

It all comes down to the terms and conditions with all leverage.

I mean I would not recommend anybody to go and go along Bitcoin 20 to 1 in a market margin

alone situation.

You're going to get wiped out.

But if you have the ability to mortgage your house for 30 years for 2 and a half percent

interest and if you knew that the currency was going to lose 15% of its value a year

then by all means you ought to buy a house with mortgage and if you have a house that's

unmortgaged then drawing down a credit line against that real estate in order to invest

in a tangible scarce desirable asset that's going to appreciate and value at a much higher

rate is a rational business decision.

Michael before we let you go as someone that has used Bitcoin to diversify their business

local we're seeing out of meta this morning a challenging quarter now they announced

recently they're getting out of the crypto space was that a mistake for them because if

they added Bitcoin into their business and built that out theoretically maybe they would

be able to just you know avoid some of these Apple privacy issues and just report better

earnings.

Well to be clear I think the mistake was not getting into the crypto space.

Meta pursued a DM project and that wasted many many years of their time.

If they were to adopt and embed Bitcoin into their product they could deliver compelling

offering to billions of people and I think it'd be worth hundreds of billions of not trillion

of dollars to meta.

So the answer to meta's problem on the revenue and the P&L side is embed Bitcoin and

lightning into their product line and the answer to the problem of how do you make cyberspace

more secure and improve the quality of your products is to embed Bitcoin and lightning

into your product line.

You know I have 10,000 Instagram bots in my DM and they're not real people they attack

me.

You know you can't really trust anyone that communicates with you in cyberspace you can't

trust scammers coming at you and what's up every day I have dozens of what's up bots attacking

me.

So if you want to clean up what's up if you want to clean up Instagram if you want to

make Facebook and for that matter YouTube and Twitter is safe for children and safe for

the world you ought to wrap those personas in a layer of digital energy and that would

be Bitcoin on lightning.

And you know meta's solution is Jack Dorsey pointed this out he said if Bitcoin had existed

with Twitter was founded they wouldn't be so relying upon advertising and you wouldn't

have this surveillance capitalism problem.

meta's solution is to go from a pure ad model to a value creation model where they become

a bank in cyberspace there's no reason why they couldn't accumulate one to 10 trillion

dollars of assets on their cloud platform if they built Bitcoin and lightning into their

product line.

So I think that's the solution to the problem they have not embraced Bitcoin that's the

problem.

Alright let's leave it there micro strategy CEO Michael Seller always good to get some

time with you we'll talk to you soon.