Joining us now, those Michael Seller,
MicroStrategy, Executive Chairman and co-founder,
Michael's great to have you on the show.
Yeah, thanks for having me, Morgan.
I do want to start right there with the regulatory landscape.
The fact that Coinbase is now filing a petition
in Federal Peel's Court Requesting Review of the Decision
by the SEC, is this the type of situation
that could impact Bitcoin or impact the type of work
you're doing at MicroStrategy?
No, there's a lot of uncertainty around the rest
of the crypto ecosystem, but the one certain element
of the ecosystem is Bitcoin is universally acclaimed
to be a global commodity or an asset without an issuer.
So the one thing we can count on is Bitcoin goes forward
in the year 2024 and a strategy built around Bitcoin
is generally a pretty safe one for institutions.
New rules, speaking of regulations,
recently announced by the Financial Accounting Standards Board,
the FASB that are going to require companies
to account for cryptocurrencies like Bitcoin at fair value,
set to go into effect these rules in the next year or so,
but companies can begin to apply them earlier than that.
How is that going to affect MicroStrategy?
You know, we welcome fair value accounting.
It's going to create much more transparency and clarity
and PNL's and balance sheets for any companies
that are holding Bitcoin.
I think this real significance is that there are companies
like Berkshire Hathaway and Apple Computer
that have $100 billion plus in cash.
And right now they have to invest it in treasuries
and sovereign debt.
And with this change in fair value accounting,
you're going to have a commodity that's valued
as fair value and it becomes a legitimate treasury reserve asset
for publicly traded companies.
Yeah, and we've had that conversation before
and the potential for more adoption,
although I suspect Berkshire Hathaway is probably
not going to be on that list of companies looking
to adopt based on commentary there.
As you want to get your thoughts though,
on Bitcoin and the rally we've seen
just in the last two months or so,
since early October, up something like 56%,
what do you attribute that rally to?
You know that we're going through a digital transformation
of everything.
Apple represents a digital transformation of telephones
and cameras and Googles the transformation of books
and libraries.
Bitcoin represents a digital transformation of capital.
99.9% of the capital in the world is tied up
in real estate and stocks and precious metals and bonds.
And so we're 0.1% transformed.
People as they get educated on digital assets
are realizing that they ought to be allocating
more and more of their capital to this digital asset.
And so they're moving from 0.1 to 0.2%.
And and I think that's really driving the trend.
It's I've said before, if Bitcoin's not going to zero,
it's going to a million.
The real question is, is it legitimate asset?
If it's a legitimate institutional asset,
everybody is under allocated to it.
So along those lines, how much is the possibility
of a Bitcoin spot ETF contributing
to this recent rally, geopolitics,
risk on rally that we've seen more broadly across markets
amid the Fed pivot?
And also next year's having, are all of these factors
that are contributing?
They're all factors.
Education makes a difference.
Institutional adoption makes a difference.
The spot ETF news is good news.
You know, loosening of monetary policy is good news.
Inflation anywhere in the world drives Bitcoin adoption.
And of course, the having is going to cut the available supply
of Bitcoins for sale and half from the miners.
And so we've got a confluence of very bullish milestones
over the next six months.
And I think smart money is investing into that ahead of it.
I do wonder what you think
about the centralization of mining though,
and whether you're concerned
since so much of the crypto community
does seem to be flagging it right now.
You know, people focus upon mining pools,
but the actual mining is taking place in Bhutan
and in Argentina and South America and Texas and Europe
and Iceland and Africa everywhere in the world.
And so the miners themselves are very decentralized.
They'll remain decentralized because they're chasing
after power this effective way marginally free.
And the pools they will accumulate hash rate
from time to time, but they don't really have the power.
The power is sitting next to a geo thermal
or a hydroelectric project somewhere in the world.
Yeah, Argentina is going to be one to watch,
especially with melee and power now.
And devaluing the peso amid rampant inflation.
A lot of expectation that we could see some more Bitcoin adoption
there.
Michael Seller, thanks so much for joining us.
The co-founder and executive chairman of MicroStrategy.
Thanks for having me.