on the crypto
MicroStrategy's bitcoin bet was a rational response to a chaotic macroeconomy, said company CEO Michael Saylor. In a recent interview, Saylor shed new light on one of this year's biggest crypto events: Microstrategy's purchase of $ 425 million in bitcoin.
Away from the dollar
According to Saylor, MicroStrategy's bitcoin strategy began with the understanding that $ 500 million fiat capital was continually being taken by government officials who were printing new money.
With recent emergency incomes inflating US dollar supply in the blink of an eye, company executives felt compelled to shift treasury reserves away from the dollar. "What we are trying to do is preserve our treasure," he said. "The purchasing power of money is rapidly degrading."
The rise of Bitcoin
Convinced that the dollar was not the right place to store MicroStrategy's excess capital, Saylor and his executives began looking for a "tangible" alternative. “We had to scroll through real estate, bonds, stocks, precious metals, derivatives or cryptocurrencies,” Saylor said.
Of that group, precious metals, particularly gold, have long been an attractive store of value, a scarce commodity and a safe haven recognized around the world. But not for Saylor. To begin with, he does not totally agree that gold is in short supply, since it can still be mined again.
But he is also very concerned about what he describes as the conflicting interests of gold miners and gold bugs. Some are trying to capitalize on the market by extracting new resources, while others are hoping that access will remain scarce, driving up prices. Furthermore, he predicts an even bigger problem for the gold market: investors now fleeing to bitcoin. It is not an if. It's a when.
Fiat in decline
Citing the predictions of some analysts, Saylor said "more aggressive monetary expansion" is likely on the way. Investors will therefore continue to consider blue chip giants from Apple (Apple shares - ticker: AAPL) to Amazon (Amazon shares - ticker: AMZN) as a new type of safe haven.
But all of these assets depend on the fiat currency crumbling. "Stocks are not a good store of value over the long term, unless the company can raise prices faster than the rate of monetary expansion or increase gross margins faster than the rate of monetary expansion," he said.
Saylor predicts that monopoly companies will be the only ones capable of achieving that kind of price growth. But politicians won't allow those companies to wield that power indefinitely, he said.
So, let's get back to where we started. "Eventually you have to find something that you can't print at will, that doesn't have its roots tied to a fiat currency, and the only thing you can find right now is bitcoin," he said.
