Last week, Michael J. Saylor, Co-Founder, Chairman, and CEO of Nasdaq-listed business intelligence company MicroStrategy Inc. (NASDAQ: MSTR), explained why he believes that Bitcoin is the best store of value.
On 11 August 2020, MicroStrategy announced via a press release that it had “purchased 21,454 bitcoins at an aggregate purchase price of $250 million” to use as a “primary treasury reserve asset.”
Saylor said at the time:
“Our decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program ― risks that should be addressed proactively.“
Since then MicroStrategy has continued to accumulate Bitcoin and its CEO has become one of Bitcoin’s most vocal advocates. MicroStrategy’s latest $BTC purchase, which Saylor tweeted about on February 1, means that the firm is now HODLing around 125,051 bitcoins, which were “acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin.”
During an interview on episode 128 of PBD Podcast — which was streamed live on March 1 — Saylor explained why Bitcoin should not be called a commodity:
“The reason that Bitcoin is magical is because there’s only 21 million. I can create more real estate in New York City. I can create more cars. I can create more luxury watches… I can create more gold. I can create more shares of stock. I can create more bonds.
“I can create any commodity. They’re commodities by definition. Given enough money and time, I can create infinite of any of them. Bitcoin is a scarcity. Okay, name another scarcity in the world, right? And technically, it’s not clear there is another scarcity, right? A scarcity is something of which it is absolutely capped.
“If the price goes up by a factor of a thousand or a million, it is absolutely capped. That is not the case with gold, soybeans, silver, stocks, bonds, real estate, single-family homes, ships, planes, trains, nothing else. Everything else could be manufactured. And of course, if the price goes up, the incentive to manufacturer more will go up, which is why, you know, buying a house isn’t necessarily going to be a great store of value in an inflating economy because you’re going to have incentives for someone else to dilute the value of your house.
“If you do buy a house, better off to buy a house on land than a condo on the 57th floor of a building. And if you do buy it on land, better off to buy it on on waterfront property. And if you buy waterfront property, better off to buy it on the beach. And if you buy it on the beach, you’re better off to buy it in the in the most desirable location of affluent intelligent people for the next 30 years…. And you can do that for 10, 20, 30 years — that’s Palm Beach, that’s the Hamptons, right? You can figure that out. Now figure out for a hundred years.“
According to a report by Bloomberg, last Monday (March 14), while speaking to the members of the Economic Club of New York, Saylor talked about the advantages of Bitcoin over other popular stores of value.
Saylor does not like gold because it cannot be developed or rented unlike real estate:
“Real estate is a better idea… If your grandmother or grandfather was smart enough to buy New York City real estate and it’s still in the family, you’re probably doing OK.“
However, he points out that real estate has its own limitations, namely that it is not always liquid (e.g. in the event of a war) and it is definitely not portable:
“If your property is not safe out of your country and it’s not safe in your country, where can you go?… The answer is cyberspace. Bitcoin is the American dream.“
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.