MicroStrategy CEO on Bitcoin Surge

our own Bloomberg Intelligence commodity strategist Mike mcglome. So he joins us. Are Mike mclog He's on the phone in Connecticut. He follows bitcoin as well and joining us right now. Our guest is Michael Sailor, Chairman, CEO and founder of micro Strategy, and he joins us as well. So, Mike, Michael, both of you. Great to have you here. Michael, Um, we did see bitcoin go above forty dollars. You were buying last year, you are this year? Where are you

in terms of your buying strategy? You know how much of your balance sheet are you committing to do it? Um? Well more than a dent because we're leverage. We've we've invested all of our free cash and we've borrowed six hundred fifty million dollars. So I don't know two of our balance sheet something like that, but but we're up about one point two billion since we started buying, So so we have a lot of bitcoin um in terms

of our strategy. We were buying it at ten thousand, we were buying it at eleven thousand, we bought it at nineteen thousand, and twenty one thousand, at thirty one thousand, and just today I announced to the world that we bought our last batch of ten million dollars worth of thirty three thousand, eight hundred. I think we'll be buying it forever forever. Where do you see it going buying? Well, yeah, we know, we know you like it um. Where do

you see the value going. We've had, you know, various guests come on and talk about a quarter of a million dollars. Where do you see it going? Well, I think bitcoin is digital gold on the world's first digital monetary network, and so it represents a high yield savings account to consumers, and there's plenty of them that would like to get paid tax free. It represents digital gold for institutions and they've got a big problem. They need

a safe haven. It represents a monetary network for Facebook and Google and Amazon investors, and it's a lifeboat for a billion people in the developing world that have currencies that are collapsing. So if you wonder where's it going, Well, at first it's going to flip gold, which is going to take it to five hundred thousand dollars a coin.

Then it's going to start to it's going to start to attract capital from weaker safe haven assets like negative yielding sovereign debt, low yielding stock indexes, other types of medals and commodities and uh and the light and that that will take it up another factor of ten. Mike mcglo, you want to come out, come on in on this conversation.

Oh yes, well, Michael, thanks for coming on. And what the key thing that struck me about when I really heard what you were doing last summer and you just nailed the media and you hover and covered it so

well as your your sense of the history. So think the key question I really want to get out of an I think from you today's how do you think future generations will look back upon you and us and what we're doing now in bitcoin, um, say fifty hundred years from now, or maybe even just ten years from now. I think for five thousand years we had the Goal standard, and that was a non sovereign bearer instrument store of value.

I think for forty or fifty years we've we've drifted through the Fiance standard, and we've been looking for a new anchor. And I think the Bitcoin is going to is the emergent digital monetary protocol for moving money through time and space, and I think it's good for another

five thousand years. Mr mcglow, I think it's I think that fifty years from now people are to say this was that transition period when the world figured out what a digital monitoring network was and what a protocol for moving money around is, and they can't imagine a world

without it. Michael, though, let me understand something, because what I keep hearing as though there's going to be a fixed supply, So how can it then become something on par there's a fixed supply of gold as well, but can it be something that we really put on par with gold? And I'm just curious what your thesis is BEI, you know, behind investing so much in in one asset essentially well, you know, people say fixed supply, but of course what we're really talking about is twenty one million

coins infinitely divisible. They're divisible infinitely, so it's only fixed in the sense that the numbers one through ten are fixed. You have the principles of mathematics or arithmetic and geometry, there's three or sixty degrees in a circle, specified supply, and fix supply applies the geometry, arithmetic and conservation of energy and the laws of physics, like there's a fixed supply of energy and you can't make or eliminate it.

So it's not a limitation in fact. In fact, conservation of the laws of physics and energy are critical to the working of electrical systems, pneumatic systems, hydraulic systems, every engineering system on the face of the earth. And so when people talk about fixed supply of bitcoin, what they mean is this is a monetary network that works and doesn't leak. Listen, Michael, one thing that we've got to ask you about is risk, and um, what could go

wrong here when it comes to bitcoin? Is this a question for Michael mcgloan or Michael Sailor from Michael Sailor for you. Okay, I know it's confusing. Yeah, Um well I think that, uh, most of the risk around bitcoin is really just news fund and regulatory fund cons earns

about how will various governments treated and what will happen. Um, as governments normalize the regulation, they're putting some know your customer and anti money laundering rags in place to normalize it compared to other assets, and sometimes people get a little bit skittish about it, but but ultimately as it normalizes, that risk will go away. Um, Michael, Mike McGlone. How about any The question I've heard from other people is this is a revolutionary and nary technology. How about another

technology improving upon it or replacing it? And that's from a person as it was, the markets guy, not really technology guys. There is that a risk? Do you view that as a potential risk? You know? I think non technologists sometimes think that, But what they don't understand is that it's a monetary protocol like t C P I P, or like the English language, Like when everybody agrees to speak English, there might be a better language, but we're

not replacing it. When we all agree to use inches and pounds, the metric system comes along, but it's really difficult to get people to replace it. And bitcoin is a monetary protocol. All the innovations going on on the edge with companies like Square and PayPal, and the underlying protocol has power because of the network effect and the and the network is not just a function of the hundred million plus people to use it. The other part of the network effect is new Tony and laws of gravity.

When you have hundreds of billions of dollars of monetary energy on the network, there's no way that's moving. Once people decide what's the winning network, they're going to stick with it, just like we stick with Twitter and Facebook and Google and YouTube. It's incredibly powerful and new technology like a better YouTube rank better Twitter isn't gonna win, and everybody knows that they're not winning. We want the network that all of our friends is where all the

money is. Yeah, it's interesting. Well, you know, I have someone tweeting at me, Michael, and they're saying, I'm curious about all the people have lost their mind bitcoins. Lots of people have have lost them, and a lot of them have been hoarded, So how do you factor that in, especially if you're thinking that this can be something that is accepted, you know, much more broadly and use more

widely financially. You know, in the early days of the Internet, we didn't have Netscape browsers and web browsers, and people had to type the tcpaddresses in by hand, and it was really difficult and only the techies did it. But then along came Netscape and it got really easy and it became consumer thing. So when people talk about losing their bitcoin, it's like the early days when they're trying

to do it all in machine code. You can also buy bitcoin by owning a share of gray Scale, or or you can actually buy it with one click on PayPal. That's like ten thousand times easier. And so there's a lot of ways to have bitcoin, and the new ways are wrapped in consumer apps by Square and PayPal. People aren't losing their bitcoin with those apps, right, It's a different thing, it's and it's much simpler. Well, one of the main question I have to ask you, Michaels, we're Americans.

We deal with the reserve currency, the dollar, and it's still the reserve currency so how about the rest of the world doing something similar that you did with corporate treasuries. It seemed to me that's much more prudent um for most of the most of the company's the rest of the world that are not dollar based, even those that aren't eural based. I operate a business in Argentina and I watched, and our business makes a lot of money.

I watched the pay soo go from a paso to the dollar, to two to a dollar, to ten to the dollar, to twenty to the dollar, to forty to the dollar, to eighty to the dollar, to and now the block market rates a hundred and fifty to the dollar. Now our our logical policy as we sweep all our patios into dollar and we get them out of Argentine banks as soon as possible. But I've still lost millions

of dollars in Argentina. So clearly I think I think it's common sense anywhere in the world you do business, if the currency is weakening or collapsing, you convert your local currency into a scarce asset. You know, if I had known about bitcoin twenty years ago, I would have bought bitcoin instead of losing all my money with paso devalued. And you know, two years ago my lawyers came and said the paso's devaluing again and there's capital controls And I said, can we buy gold? They said no, you

can't get it to the airport. I said, can we buy a yacht and sailor from Argentina to the Caribbean. And it looked at me like I'm out of my mind. If I know it about bitcoin, I would have bought bitcoin, right, hard asset. Hey, listen, one thing we want to ask you about. UM. You are hosting a bitcoin conference and it's a lot of leaders, executives, UM officers and directors and advisers of corporation and what is it about the conversation around bitcoin? Do you think that has changed dramatically

that tells you maybe about where it's going? And and just got about a minute here. Yeah, a bitcoin rotated from being a consumer leveraged, you know, strange digital asset to being an institutional safe haven store of value in the last twelve months. Every corporation with cash on the books has a liability as the money supply explates by fiercent a year, if they can flip it to a scarce asset like bitcoin. It becomes an asset, not a liability.

That's driving thousands of companies to want to do this, and that's that those the people that will be at our conference tomorrow. Alright, interesting, interesting stuff. Is there anything that keeps you up at night over Bitcoin? Just got like twenty five seconds here. I think it's a certain that I'm gonna lose se of my value in cash instruments over the next ten years. So no, I'm not kept up at night at all. I'm happy to have done it and I and I think that everybody can

benefit from discovering bitcoin is a store of value. All Right, we're gonna leave it on that note. Listen, Michael, thank you so much, really appreciate it. Michael Sailor, chairman, CEO and founder of micro Strategy joining us on the phone and her own Mike mcglogan. Pretty cool stuff, Mike, that's great, Thanks for having me. Yeah, thanks to both of you. Mike mcglogan also of our Bloomberg Intelligence team. He's a commodity strategist and follows bitcoin for us