👉 The news. The price of bitcoin has lost more than 50% since its all-time peak at $69,000 in November 2021.
👉 The context. The boss of MicroStrategy believes that bitcoin remains the only way to fight inflation, which continues to rise.
👉 Why it matters. With $3.5 billion in bitcoins, American Michael Saylor is one of the most exposed investors on the planet.
The Big Whale: The markets have been falling steadily for months and don't seem to be at their best. How are you doing?
Michael Saylor: Everything is going very well (laughs). The price of bitcoin has fallen, but its intrinsic value is still intact. I've always said that we have a long-term vision. That bitcoin is a technological, economic and social revolution. And nothing has changed in that respect. All these debates about prices are completely pointless and make us miss the essential point.
What do you think is essential?
With bitcoin, this is the first time in history that we are able to circulate value in the digital universe. For 30 years, everything we have created in the digital space - our writings, our music, our videos, in other words absolutely everything - has been nothing but information. But information is duplicated, it doesn't retain its energy, i.e. its intrinsic value. If I create a song and put it in a digital file, I can copy it and send it to millions of people. If I send you a bitcoin, I don't have it any more, it's with you. It has moved into digital space and retained its value. And I really insist on this idea of value.
You often say that Bitcoin is what the internet has been missing since its creation, what do you mean?
Every day, I receive thousands of messages from bots on Twitter, Instagram... All this happens because it can be done for free. There is no cost to creating millions of fake accounts and false information. That's what Elon Musk understood with Twitter and why he wants to transform the social network. In the physical world, I can't go at the speed of light, I have limits, whereas in the digital world, anything is possible. I'm not saying we should limit the Internet's potential, but Bitcoin is the basis for rationalising this universe and what gives value in cyberspace.
You say Bitcoin is "digital energy", what do you mean by that?
A bitcoin is a file that represents one 21 millionth of all the energy in the Bitcoin network (the maximum supply of bitcoins in circulation is set at 21 million units, ed. note). How do I create this file? I create it using electricity and mining machines. So it's "digitised energy". What is the dollar? Political energy: I work and get paid with a currency guaranteed by the US government. Bitcoin works in the same way: it's digital energy. You can keep that energy on the network or you can spend it.
The debate around mining and its environmental impact is growing all the time. Is this an issue for you?
We tend to focus on the energy consumed by Bitcoin when all human activity requires energy. When you go to work, you eat, you take transport, you consume energy!
Do you think Bitcoin solves the problem of energy storage? Can we think of bitcoin as a super battery?
If you have a million dollars, how do you store it for 100 years? Do you put it in the bank? I ask because our current monetary battery, the fiat currencies (euro, dollar, etc), are losing at least 2% of their value per year. In other words, if you don't invest this money, you lose a bit of it every year. Bitcoin solves this problem. We store the value in the form of energy. And the advantage is that you can move it around easily. Try moving gas or oil, you'll see... There are transport and storage costs. You lose value in the process. With Bitcoin, I can send tens of millions of dollars of energy in a few minutes from Paris to Tokyo, I can move this energy easily and store it. What does it cost to store the equivalent of a billion dollars on Bitcoin? Almost nothing!
What do you say to those who say you can't do anything with Bitcoin?
If I give you digital music or a digital film and you don't have a computer, it's useless. To listen to my music, I have to put it on the network and it has to come out of my iPhone. If I send you a file with Beethoven's 5th Symphony and you don't have electricity, nothing will happen. Does that mean that there is no digital music? No. And that goes for everything. Google Maps is a digital map, Facebook is a digital relationship, YouTube is a digital university, Netflix is a digital cinema.
And what is Bitcoin?
Bitcoin is special because it is several things at once: digital energy, digital property and digital currency. It's just a matter of perspective. If I keep my bitcoin for 10 years, it's digital property. If I use it to buy things, it's digital currency and if I regularly transfer it to the four corners of the world, it's digital energy.
You talk about digital property. Over the last 10 years, Bitcoin has been an excellent store of value. But what guarantees do we have that it won't collapse? Are we sure it can last another 10, 20, 50 years?
Nobody is sure of anything. Bitcoin is a decentralised peer-to-peer network that anyone can use and on which anyone can become a validator. The more validators there are and the more stable the network, the more resilient it becomes and the more valuable it becomes. This is what encourages people to become miners to secure transactions and obtain bitcoins in exchange. It's an incredibly ingenious system that has seen the Bitcoin network grow from strength to strength. I don't have a crystal ball, but I'm convinced that Bitcoin's value is not going to stop rising because unlike everything else in the physical world, Bitcoin doesn't depend on a central body. It has no weak points. This is an essential point that many people have not yet understood. Trying to destroy Bitcoin is like trying to kill a bees' nest with a sword. You'll never succeed.
You're known as what's known as a "maximalist", i.e. someone who only believes in Bitcoin. Is there no other crypto that finds favour in your eyes?
The big difference between bitcoin and other cryptos is that bitcoin is digital property whereas all the others are digital assets controlled by a central entity. The people in charge of the project can decide to issue new tokens, there can be forks, the protocol can be changed, which gives enormous power to its creators, as is the case with Ethereum, which wants to move to proof of stake. With Ethereum, Bitcoin Cash, Litecoin, you have no real control over your cryptos, and I'm not even talking about "shitcoins" like Luna.
Speaking of the Luna token, does the collapse of the Terra project surprise you?
Since our first bitcoin purchases in August 2020, I've been saying all along that you should avoid these projects that have demonstrated little or nothing. The only reason Terra was being talked about in recent months was the 20% returns UST was offering. What a joke.
After El Salvador, the Central African Republic has just made bitcoin its legal currency, alongside the CFA franc. Other countries could follow suit. Is there a real groundswell?
El Salvador has bought a few hundred million dollars worth of bitcoin. That's a lot and a little at the same time. If I were President Nayib Bukele, I would buy billions of dollars worth of bitcoins! I wouldn't buy gold or sovereign bonds, just bitcoin. After that, I don't know exactly what El Salvador's reserves are. And that's not all they do. They've given everyone digital wallets, which is a very good thing. It's important to allow people to be able to keep and transfer their money.
And it could work in other countries?
Venezuela, Argentina, Turkey, Lebanon, Syria and lots of other countries have currencies that are worth nothing. All these countries will gradually switch to dollar or euro stablecoins, and also to bitcoin. But in the longer term, these countries should just buy bitcoin, in large quantities, and peg their currencies to it. In fact, that's more or less what we've done with MicroStrategy. We have invested a very large part of our cash in bitcoin, which means that MicroStrategy's share value is no longer based on cash flow, but on the value of bitcoin.
Isn't it dangerous to do that?
The dangerous thing is to keep your cash in dollars or any other traditional currency. Every currency in the world loses value over time. Even gold loses value every year as new deposits are discovered all the time! All the world's currencies are like planes with a fault. Even if you only lose a few metres of altitude a day, at some point you're going to crash...
So you think it's absolutely necessary to have bitcoin?
Yes, everyone, individuals, companies, local authorities. Apple has 200 billion in cash, it's madness to keep all that in dollars, especially with inflation rising all the time. If I were the boss of Apple or the mayor of New York, I'd borrow a billion dollars at a rate of 1.5% or 2% over 20 or 30 years to buy a billion dollars' worth of bitcoin, which would yield at least 15% annually over the same period.
In less than two years, you've become one of the figures of crypto. We see you on Twitter, on television. A lot of people wonder what your day-to-day is like...
I'm the boss of MicroStrategy, which is a Nasdaq-listed company, so I have quite a bit of operational stuff to manage. But I have an excellent team and the business is doing well. I also manage the financial strategy. Should we buy more bitcoins? Should we issue debt? Should we raise capital? Invest our bitcoins? The rest of my time is spent communicating with investors and institutions that want to understand what we do and how we manage our cryptocurrencies. It's fascinating stuff. I spend a lot of time talking to other companies that would like to buy bitcoin but are still wondering. I also spend a lot of time managing the Bitcoin Mining Council, developing the Saylor Academy, which runs courses on bitcoin, and of course talking to journalists because there's a lot to explain (laughs).
How do you store your cryptocurrencies?
We work with several companies, most notably Coinbase.
What future do you see for traditional currencies? Do you think they will disappear?
Not at all. The dollar, the euro, the yuan, the yen and the pound sterling will continue to exist. For the others, however, I don't know. If you have a state with the economic and military power to defend your currency, that's fine, but I wouldn't put it past those who don't. Can you name a currency in Africa or South America that you'd rather hold than the euro? Currencies like the Argentinian peso or the Turkish lira still exist because the locals find it very difficult to convert them into other currencies. Argentines are subject to major exchange controls to prevent them from jumping on the dollar or the euro. I think we need currencies, but not all currencies. The most important thing is for people to be able to pay and protect their assets. And bitcoin is going to enable Salvadorans and Central Africans to do that.
Could MicroStrategy one day focus solely on bitcoin?
I don't think so. We are a software company and this business is profitable. And there's one important point for me: MicroStrategy is an operational company, we're not a financial company, which allows us to do a lot of things, like make acquisitions or issue debt to buy... bitcoin.
On regulation, we can see that things are moving fast, particularly in Europe. And in the United States?
There is indeed a big movement. I think the most important thing is to give the industry visibility. Clear legal definitions are needed. What is a digital currency? A digital asset? Digital property? How should the custody of cryptos work? Things are still very vague, even though the sector is becoming structured with major investors, global platforms and miners. There are also NFTs.
Do you still trust the US government? Do you think the dollar will remain the world's currency?
The dollar is going to be more and more powerful. Of course, it will continue to lose value relative to bitcoin, but it will become more and more powerful because the other currencies will depreciate even faster... In fact, things are quite simple: the world needs currencies and property. You need currencies to carry out your day-to-day exchanges, while you need property to preserve the value of your assets or make them grow. I think that in the next few years, everyone will have a wallet to store their local currency (peso, pound), their global currency (euro, dollar) and bitcoin to protect their wealth.
