Bitcoin Is Digital Property And That Makes It The Perfect Asset For A Retirement Plan

Welcome back to Squack on the Street Fidelity, becoming the first retirement plan provider to allow its investors the option to put Bitcoin in their 401Ks.

And MicroShrategy will be one of the first employers to offer the cryptocurrency in the company's retirement plans, joining us now exclusively Michael Saler, MicroShrategy at Chairman and CEO.

Michael, great to have you back on the show.

Yeah, thanks for having me.

So I do want to start with this news because it does certainly seem like a big deal that Fidelity, this retirement plan provider, the first major one to do this is taking a move like this.

How do you see it in terms of next steps for Bitcoin and Bitcoin adoption?

Well, like Bitcoin's digital property and that makes it the perfect asset for a retirement plan.

It's less risky than bonds than stocks than commercial real estate than gold.

It was kind of built for this.

Most people buying Bitcoin, they want to give it to their grandchildren and their great grandchildren.

So I think Fidelity's put their finger on an issue.

There's 80 million Americans, the currently own or have own digital assets, 30% of institutions want to own these digital assets.

401K plan is a pretty common thing for millions and millions of workers to use to save in order to protect their family interest.

And this is going to fill an important vacuum in the investment product market.

Now, and I realize that MicroShrategy is technically a tech company, but it is also the largest publicly traded company in terms of Bitcoin holding.

So are you expecting many of your employees to actually adopt this into the retirement plans?

There's been a lot of demand for this. They've been asking for it for quite a while.

And so it's a technical challenge to offer 401K savings plans.

And Fidelity has overcome that challenge and offering a great product.

So we're really, really delighted to be able to offer to our employees.

So even as we're having this conversation, it was just last month that the US Labor Department published guidance cautioning employers to quote exercise extreme care before they consider adding a cryptocurrency option to a 401K plans.

Investment menu, the fact that there is still so much hesitancy here, and I think a lot of it's been tied to historically the volatility we've seen in the price of Bitcoin.

What is it going to take from your viewpoint for the government to perhaps better understand or align itself around cryptocurrency assets?

There's a lot of fear and uncertainty around electricity, automobiles, airplanes, and the like when those technologies arrived, Bitcoin's a digital transformation of property of capital of energy.

It's like money at the speed of light on an open protocol.

It's going to require a lot of education.

And I think that as regulators and the society at large gets more educated, they'll get more comfortable that this is a much better way to do this than the 20th century technique.

Michael, you mentioned obviously there is a core of people who certainly want to hold digital assets such as Bitcoin for the long term.

So wondering, you read about how Bitcoin has traded. It's trading right now at levels first reach, let's say 15 months ago, after a massive surge, of course, before that.

And it's really been in sync with other speculative dollar-based assets like the NASDAQ. So what's the take on what's happening there?

There's three types of investors in Bitcoin. There's the traders, there's the technocrats, and there's the maximalist.

The maximalists are buying the stuff to get to their grandchildren and they just dollar cost average and they're all in already.

So they don't control the market. The technocrats think it's the next big tech network like Google or Facebook when they're feeling bullish on technology, they're buying, when they're feeling bearish on technology, they're selling.

So the traders think it's either a correlated asset or an uncorrelated asset, the risk assets, depending on their mood.

Right now they think it's correlated to risk and so if they're selling risk, they're selling Bitcoin.

It's obviously not a tech stock. It is actually the ultimate risk off asset in time over the course of 4567 years, everybody figures it out.

But right now the traders and the technocrats control the market trading of Bitcoin and it's a function of the tug of war between them and the mood in the market.

Yeah, I mean it's such a key conversation to be having right now because if ever there was a real-world use case for Bitcoin, it's now, right, with surging inflation, geopolitical conflict.

In fact, you have some fundamental questions. They're going to be longer term questions, but fundamental questions being raised about the future of Fiat currency, specifically dollar dominance in the face of sanctions, also things like Saudis considering pricing oil and you want.

So longer term, you believe that this plays out in favor of, for example, the maximum maximalist.

Yeah, long term we know where this ends, but in the near term, you know, the 30 year swap rates are all over the place.

Interest rates are like a roller coaster. And so people in the risk asset business and the risk off asset business are controlling the market in the near term.

Bitcoin is for people that just want to store excess money for the next decade or longer.

It's a savings plan for people that understand it, but but but people with less less conviction and more money than you will control the market in the near term.

So let's talk about Bitcoin mining and energy usage. It's been a malstrom of controversy and conflicting reports.

You are integral to the Bitcoin mining council put out data just this week showing that the energy usage is actually declining.

Why do we see such conflicting data and breakdown where you're getting yours or the mining council is getting its I should say and how that factors into this entire debate.

Look, most of the the fun is guerrilla marketing coming from competing companies promoting, you know, alternative technologies that are highly experimental.

It's a difference between using real energy and cars and planes and medicine versus imaginary energy and the metaverse.

And the truth of Bitcoin mining is that Bitcoin's running on 58% sustainable energy. Everything else in the world is running on 21% sustainable energy.

And Bitcoin mining is really a technology business. It's gotten 58 times more technically efficient in the last eight years.

It actually surged by plus 63% year over year just in this quarter. So so people that understand it, they understand that we're converting energy into digital property.

So we can move it at the speed of light so that it will be immortal and indestructible and programmable.

Those that don't understand it are easily spooked by some of some of this flood and the solution is just to educate them.

So speaking of education last year, Bitcoin mining getting a lot of attention in part because of Elon Musk weighing in.

You had conversations with him back and forth on Twitter. If I'm correct, you pulled him into the Bitcoin mining council's work as well in terms of that education.

Now the focus is on Elon Musk taking over Twitter and taking Twitter private as well, which you've been weighing in on to.

I want to get your thoughts on that, especially since crypto Twitter in general seems to be very supportive of this move.

Like there's two issues with the Twitter takeover. One is human rights and the other one is malicious bots that are destroying cyber space.

The human rights issue is people are generally coming to the opinion that companies with monopolies should respect our constitutional rights.

And I think Elon has articulated that clearly and there's a lot of rallying around that idea.

With regard to malicious behavior and cyber space, I get attacked by a million non person bots every day that are launched, you know, to do malice to commit sy ops to commit spam and scam and fishing attacks.

The solution by the way is Bitcoin if we allow hundreds of millions of people to get orange check verified by posting a few sats in a few seconds, we can completely eliminate all the malicious behavior in cyber space.

And we can clean it up for women and children and innocent people that are trying to actually go about their business without being attacked by some malicious operator.

I mean, you're tech guy, your software guy would open sourcing the algorithm. How profound would that be or not be where Twitter is concerned?

I think if you open source the algorithm, people know whether or not their human rights to freedom of speech or freedom of assembly have been respected or not.

And so I think that that's pretty useful and would be a benefit to the civilization.

Michael sailor always great to get your insights. Thanks for joining us today. Yeah, thanks for having me.