The Emergence Of Bitcoin As The World Reserve Capital Network

With Bitcoin moving up, 1.8% pairing some of the advance here.

It looks like we're actually down below 100,000 again,

but still got up as high as 103,000 late last night early into this morning.

I feel like we might have the perfect guest to elaborate on this very topic.

Yes, indeed. Bitcoin indeed topped 100,000 for the first time ever.

The cryptocurrency on that record-breaking run since President-elect Donald Trump's victory.

Joining us now, Michael Sailer, executive chairman of MicroStrategy.

Of course, MicroStrategy now, one of the largest Bitcoin holders with just over 402,000 of the coins.

I don't know if you want to do a little dance, Michael, if you've got some champagne behind you.

But obviously, we've been talking to you for a while now.

And you have been a staunch bull on Bitcoin.

You put your money where your mouth is in terms of adding it to the balance sheet over there.

And MicroStrategy, I guess, now that we've gotten there, now what?

What's next?

Every day for the past four years, I've said, buy Bitcoin.

Don't sell the Bitcoin.

I'm going to be buying more Bitcoin.

I'm going to be buying Bitcoin at the top forever.

I joked with Dave Portnoy today.

He said, I missed it at 10,000.

I missed it at 20,000.

I missed it at 100,000.

I said, Dave, it's still less than a million coin.

You're getting a 90% discount from a million coin.

I'm sure that I will be buying Bitcoin at a million coin.

Probably a billion dollars a day of Bitcoin at a million coin.

I think it's a very simple idea.

It just keep buying Bitcoin with your spare capital.

It's going to appreciate against the dollar forever.

Michael, if I don't own Bitcoin, though, and I'm listening to this,

your advice is buy here or no, wait for a pullback.

When I do buy, Michael, your advice to folks who are listening

about how to do that?

What do they buy?

Do they dollar cost average into Bitcoin?

What's your advice?

I think you should think of Bitcoin as a long-term capital asset.

If you have money you don't need for four years,

or even better yet for 10 years,

put it into a portfolio.

You might hold scarce desirable real estate.

You might hold your favorite artwork.

You might hold some portfolio of companies going to hold forever.

I think a part of that is Bitcoin.

So I say dollar cost average into Bitcoin every quarter,

sweep some long-term savings into Bitcoin,

expect to keep it there for a decade or longer,

and don't get too worked up over the volatility in the near term.

Well, you alluded to this,

that you don't try and time the market here.

The strategy through micro-strategy is to just keep

buying consistently, regularly, no matter what the price is.

Yeah, I mean, I look at it like Manhattan real estate, the year is 1650.

And if you had a chance to buy it in every decade from 1650 to today,

wouldn't you just keep buying it?

If you didn't have to pay property tax and you could hold it,

you would just keep accumulating it forever.

There's never a bad time to buy it.

There's a sailor tracker.

You can look at it.

It just shows we bought at every price point every quarter

at the highs, at the lows, at the mids.

I bought it every week for the past four weeks,

and a size billion or more.

I'm going to just keep buying it.

It's not that complicated.

I expect that it'll be the most valuable thing

on the world 100 years from now.

So why wouldn't you just keep accumulating it?

Michael, we've talked a little bit about this before.

So I want to just re-up the question before we move on

when you've like inded to Manhattan real estate.

Manhattan real estate, you collect rent on it, right?

So at some point, do you somehow monetize the Bitcoin

that you hold in some way?

Yeah, well, imagine I gave you the chance to buy 40 city blocks of Manhattan real estate

100 years ago, but there are no buildings on it.

There was no rent associated with it.

But you knew it was going to be the greatest city in North America,

and you could buy it and hold it.

You would still do it just like you might buy Alaska in 1867,

and even though there's no rent on it,

because you think that over the next 100 years,

someone else will find a way to take advantage of it.

With Bitcoin, it's cyber Manhattan.

There's 8 billion people that have money.

They're not going to live there,

but they're going to put their money there,

because everybody has to park their money somewhere.

And so you're just buying one block out of 21 million

of all the capital in the world.

It'll be the center of the digital economy.

You may not know the applications,

but there are applications.

MicroStrategy makes a lot of money by holding that digital property.

We're generating massive amounts of shareholder value from that,

so you don't have to understand how we do it.

You just need to hold your Bitcoin and let us drive the price up.

And, Michael, obviously, the move since the election

has been powerful.

Trump is moving back into the White House,

to be positioned himself as an ally of Bitcoin and ally of crypto.

What would you like to see Michael his priorities be now?

His policy priorities.

Well, I mean, I think low regulation, low tax,

pro-innovation policies,

give me, especially, specifically with regard to digital assets.

If we have a digital assets framework that supports digital commodities,

digital securities, digital tokens, digital ABTs,

digital currencies, digital NFTs,

so that people can innovate in the United States of America

and spread those assets everywhere in the world.

I think that'll be good for the world and good for the United States.

Michael, I'm curious because we've talked to some of your peers in the crypto industry,

who have talked about maybe some of the friction at times that they have felt

when they've been trying to buy crypto assets under the existing regime,

under Gary Ganceler at the SEC, for example.

You guys have obviously accumulated an awful lot of Bitcoin at micro-strategy.

Has there ever been that kind of friction?

Have you seen those regulatory obstacles to what you've been doing?

Well, I think Bitcoin is the one digital asset that has the most regulatory clarity in the world,

because there's general universal consensus that it's a digital commodity.

The friction on Bitcoin has been slow, approval of the ETFs,

the inability to do cash, create, and redemption,

the slow approval of the options marked on the ETFs,

and resistance to banks, custodying, and handling Bitcoin.

So that's held back the asset class.

I think that a favorable crypto regime will accelerate the development of Bitcoin.

And I think on the digital asset, so I write just the lack of a digital assets framework

for digital currencies and digital exchanges and digital tokens has put that industry in limbo.

And I think we're looking for those things to be resolved with the incoming administration,

and that should accelerate growth for everybody.

And Michael, this week on the show, we did speak to Senator Kirsten Gillibrand.

And I asked her, Michael, specifically about this idea of a Bitcoin strategic reserve.

Listen to her response here.

I don't know what the purpose of a Bitcoin central reserve is,

and I haven't really seen the details of any idea about why you would do that,

and why that's important.

I think it would have an obvious impact of supporting the Bitcoin industry,

which in and of itself isn't good or bad.

I just wouldn't want to know what the reason is.

All right, Michael. So the Senator, not sure about the reason for it.

What do you say to that? What's your response?

Bitcoin is emerging as the world's reserve capital network.

If you want to store your capital for the long-term and you live in Africa,

or Russia, or China, or South America, or even the US,

your choice is local real estate or local stocks or Bitcoin.

Well, people are realizing that Bitcoin is better than real estate.

It's better than stocks.

There's not a single company or real estate property in Africa that you would

rather own for the long-term than Bitcoin.

So the very simple idea is by 20 or 25% of the Bitcoin network,

on behalf of the US government,

catalyze the development of that world reserve capital network and then let all the Chinese

and the Russians and the foreigners sell all their other assets and buy Bitcoin and then the

money flows into the United States. If you want to put a great twist on it, dump your gold,

sell all the US gold by Bitcoin, then the trade is free because you could buy 5 million Bitcoin

for the cost of the gold. You will demonetize the entire gold asset class and our enemies hold

gold in their banks. So their assets would go to zero. Our assets would go to a hundred trillion

dollars and we would control the world's reserve capital network as well as the world's reserve

currency network. As usual, you're painting a grand and vivid picture of Michael with this kind

of stuff. I know your long-term price targets are almost infinite. Let's talk shorter term and

let's assume that the Bitcoin reserve doesn't happen. Let's assume that the conditions continue

as they are. Where do you see Bitcoin at the end of 2025?

I don't charge it month by month but I noticed that it's about 60% A or R for the past four years

and even before that point. My model is generally that it will grow at 60% A or R desalorating to 20%

A or over 21 years. If you start to crank in 60% and 58% and 56% and 54% and you put that on a scale,

absent the cyclical volatility you get to a forecast which makes sense.

Michael, quick question on that cyclical volatility because typically Bitcoin does move in these

four-year cycles and there is a sharp pullback typically. Is that anywhere inside and what would be

a potential catalyst for that? I think as the asset grows and matures the volatility decreases and

those drawdown, the exchange of the drawdown decrease. The structure of the market determines

the volatility and so if you're going to forecast the structure of the market you can look back

to the market. If you looked at a bicycle four years ago and I show up with a motor cycle right

now, there is a difference set of physics. The market right now is driven by the ETFs, driven by

the options market, driven by companies like MicroStrategy, driven by the global adoption. I think

what you'll see is you will still see volatility but you won't see the extreme drawdowns of the

last cycle. You'll see a more gentle volatility. It will surge up, it will come back but I don't expect

we saw an 80% drawdown in the depth of the crypto winner from 66,000 to 16,000. In order for that

to happen you had to have a bunch of very poorly capitalized companies like FTX and Genesis and

Celcius and BlockFi, Force Liquidate. We don't have those kind of companies in the system now that

the capital structures that the company is participating in the market today are much deeper,

much more robust and there's a lot more equity capital today. You'll see a different dynamic,

I think it will be muted to the upside and the downside because of the options traders that are

moderating the market. Michael, great to see you. Thank you so much for joining especially today

on seeing this milestone a bitcoin. Appreciate it. Yeah, thanks for having me.