Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Before the Game
Speaker 1: Stop Frenzy, which we've all been obsessed with, we had
Speaker 1: the Bitcoin frenzy, and if you go back a month
Speaker 1: or more, we were regularly talking about the run up
Speaker 1: and bitcoin. It's up about so far this year after
Speaker 1: gaining more than last year. One of our listeners, Alexander,
Speaker 1: messaged me and said, you really need to be talking
Speaker 1: to our next guest, and uh, that was confirmed by
Speaker 1: our own Bloomberg Intelligence commodity strategist Mike mcglome. So he
Speaker 1: joins us. Are Mike mclog He's on the phone in Connecticut.
Speaker 1: He follows bitcoin as well and joining us right now.
Speaker 1: Our guest is Michael Sailor, Chairman, CEO and founder of
Speaker 1: micro Strategy, and he joins us as well. So, Mike, Michael,
Speaker 1: both of you. Great to have you here. Michael, Um,
Speaker 1: we did see bitcoin go above forty dollars. You were
Speaker 1: buying last year, you are this year? Where are you
Speaker 1: in terms of your buying strategy? You know how much
Speaker 1: of your balance sheet are you committing to do it? Um?
Speaker 1: Well more than a dent because we're leverage. We've we've
Speaker 1: invested all of our free cash and we've borrowed six
Speaker 1: hundred fifty million dollars. So I don't know two of
Speaker 1: our balance sheet something like that, but but we're up
Speaker 1: about one point two billion since we started buying, So
Speaker 1: so we have a lot of bitcoin um in terms
Speaker 1: of our strategy. We were buying it at ten thousand,
Speaker 1: we were buying it at eleven thousand, we bought it
Speaker 1: at nineteen thousand, and twenty one thousand, at thirty one thousand,
Speaker 1: and just today I announced to the world that we
Speaker 1: bought our last batch of ten million dollars worth of
Speaker 1: thirty three thousand, eight hundred. I think we'll be buying
Speaker 1: it forever forever. Where do you see it going buying? Well, yeah,
Speaker 1: we know, we know you like it um. Where do
Speaker 1: you see the value going. We've had, you know, various
Speaker 1: guests come on and talk about a quarter of a
Speaker 1: million dollars. Where do you see it going? Well, I
Speaker 1: think bitcoin is digital gold on the world's first digital
Speaker 1: monetary network, and so it represents a high yield savings
Speaker 1: account to consumers, and there's plenty of them that would
Speaker 1: like to get paid tax free. It represents digital gold
Speaker 1: for institutions and they've got a big problem. They need
Speaker 1: a safe haven. It represents a monetary network for Facebook
Speaker 1: and Google and Amazon investors, and it's a lifeboat for
Speaker 1: a billion people in the developing world that have currencies
Speaker 1: that are collapsing. So if you wonder where's it going, Well,
Speaker 1: at first it's going to flip gold, which is going
Speaker 1: to take it to five hundred thousand dollars a coin.
Speaker 1: Then it's going to start to it's going to start
Speaker 1: to attract capital from weaker safe haven assets like negative
Speaker 1: yielding sovereign debt, low yielding stock indexes, other types of
Speaker 1: medals and commodities and uh and the light and that
Speaker 1: that will take it up another factor of ten. Mike mcglo,
Speaker 1: you want to come out, come on in on this conversation.
Speaker 1: Oh yes, well, Michael, thanks for coming on. And what
Speaker 1: the key thing that struck me about when I really
Speaker 1: heard what you were doing last summer and you just
Speaker 1: nailed the media and you hover and covered it so
Speaker 1: well as your your sense of the history. So think
Speaker 1: the key question I really want to get out of
Speaker 1: an I think from you today's how do you think
Speaker 1: future generations will look back upon you and us and
Speaker 1: what we're doing now in bitcoin, um, say fifty hundred
Speaker 1: years from now, or maybe even just ten years from now.
Speaker 1: I think for five thousand years we had the Goal standard,
Speaker 1: and that was a non sovereign bearer instrument store of value.
Speaker 1: I think for forty or fifty years we've we've drifted
Speaker 1: through the Fiance standard, and we've been looking for a
Speaker 1: new anchor. And I think the Bitcoin is going to
Speaker 1: is the emergent digital monetary protocol for moving money through
Speaker 1: time and space, and I think it's good for another
Speaker 1: five thousand years. Mr mcglow, I think it's I think
Speaker 1: that fifty years from now people are to say this
Speaker 1: was that transition period when the world figured out what
Speaker 1: a digital monitoring network was and what a protocol for
Speaker 1: moving money around is, and they can't imagine a world
Speaker 1: without it. Michael, though, let me understand something, because what
Speaker 1: I keep hearing as though there's going to be a
Speaker 1: fixed supply, So how can it then become something on
Speaker 1: par there's a fixed supply of gold as well, but
Speaker 1: can it be something that we really put on par
Speaker 1: with gold? And I'm just curious what your thesis is BEI,
Speaker 1: you know, behind investing so much in in one asset
Speaker 1: essentially well, you know, people say fixed supply, but of
Speaker 1: course what we're really talking about is twenty one million
Speaker 1: coins infinitely divisible. They're divisible infinitely, so it's only fixed
Speaker 1: in the sense that the numbers one through ten are fixed.
Speaker 1: You have the principles of mathematics or arithmetic and geometry,
Speaker 1: there's three or sixty degrees in a circle, specified supply,
Speaker 1: and fix supply applies the geometry, arithmetic and conservation of
Speaker 1: energy and the laws of physics, like there's a fixed
Speaker 1: supply of energy and you can't make or eliminate it.
Speaker 1: So it's not a limitation in fact. In fact, conservation
Speaker 1: of the laws of physics and energy are critical to
Speaker 1: the working of electrical systems, pneumatic systems, hydraulic systems, every
Speaker 1: engineering system on the face of the earth. And so
Speaker 1: when people talk about fixed supply of bitcoin, what they
Speaker 1: mean is this is a monetary network that works and
Speaker 1: doesn't leak. Listen, Michael, one thing that we've got to
Speaker 1: ask you about is risk, and um, what could go
Speaker 1: wrong here when it comes to bitcoin? Is this a
Speaker 1: question for Michael mcgloan or Michael Sailor from Michael Sailor
Speaker 1: for you. Okay, I know it's confusing. Yeah, Um well
Speaker 1: I think that, uh, most of the risk around bitcoin
Speaker 1: is really just news fund and regulatory fund cons earns
Speaker 1: about how will various governments treated and what will happen. Um,
Speaker 1: as governments normalize the regulation, they're putting some know your
Speaker 1: customer and anti money laundering rags in place to normalize
Speaker 1: it compared to other assets, and sometimes people get a
Speaker 1: little bit skittish about it, but but ultimately as it normalizes,
Speaker 1: that risk will go away. Um, Michael, Mike McGlone. How
Speaker 1: about any The question I've heard from other people is
Speaker 1: this is a revolutionary and nary technology. How about another
Speaker 1: technology improving upon it or replacing it? And that's from
Speaker 1: a person as it was, the markets guy, not really
Speaker 1: technology guys. There is that a risk? Do you view
Speaker 1: that as a potential risk? You know? I think non
Speaker 1: technologists sometimes think that, But what they don't understand is
Speaker 1: that it's a monetary protocol like t C P I P,
Speaker 1: or like the English language, Like when everybody agrees to
Speaker 1: speak English, there might be a better language, but we're
Speaker 1: not replacing it. When we all agree to use inches
Speaker 1: and pounds, the metric system comes along, but it's really
Speaker 1: difficult to get people to replace it. And bitcoin is
Speaker 1: a monetary protocol. All the innovations going on on the
Speaker 1: edge with companies like Square and PayPal, and the underlying
Speaker 1: protocol has power because of the network effect and the
Speaker 1: and the network is not just a function of the
Speaker 1: hundred million plus people to use it. The other part
Speaker 1: of the network effect is new Tony and laws of gravity.
Speaker 1: When you have hundreds of billions of dollars of monetary
Speaker 1: energy on the network, there's no way that's moving. Once
Speaker 1: people decide what's the winning network, they're going to stick
Speaker 1: with it, just like we stick with Twitter and Facebook
Speaker 1: and Google and YouTube. It's incredibly powerful and new technology
Speaker 1: like a better YouTube rank better Twitter isn't gonna win,
Speaker 1: and everybody knows that they're not winning. We want the
Speaker 1: network that all of our friends is where all the
Speaker 1: money is. Yeah, it's interesting. Well, you know, I have
Speaker 1: someone tweeting at me, Michael, and they're saying, I'm curious
Speaker 1: about all the people have lost their mind bitcoins. Lots
Speaker 1: of people have have lost them, and a lot of
Speaker 1: them have been hoarded, So how do you factor that in,
Speaker 1: especially if you're thinking that this can be something that
Speaker 1: is accepted, you know, much more broadly and use more
Speaker 1: widely financially. You know, in the early days of the Internet,
Speaker 1: we didn't have Netscape browsers and web browsers, and people
Speaker 1: had to type the tcpaddresses in by hand, and it
Speaker 1: was really difficult and only the techies did it. But
Speaker 1: then along came Netscape and it got really easy and
Speaker 1: it became consumer thing. So when people talk about losing
Speaker 1: their bitcoin, it's like the early days when they're trying
Speaker 1: to do it all in machine code. You can also
Speaker 1: buy bitcoin by owning a share of gray Scale, or
Speaker 1: or you can actually buy it with one click on PayPal.
Speaker 1: That's like ten thousand times easier. And so there's a
Speaker 1: lot of ways to have bitcoin, and the new ways
Speaker 1: are wrapped in consumer apps by Square and PayPal. People
Speaker 1: aren't losing their bitcoin with those apps, right, It's a
Speaker 1: different thing, it's and it's much simpler. Well, one of
Speaker 1: the main question I have to ask you, Michaels, we're Americans.
Speaker 1: We deal with the reserve currency, the dollar, and it's
Speaker 1: still the reserve currency so how about the rest of
Speaker 1: the world doing something similar that you did with corporate treasuries.
Speaker 1: It seemed to me that's much more prudent um for
Speaker 1: most of the most of the company's the rest of
Speaker 1: the world that are not dollar based, even those that
Speaker 1: aren't eural based. I operate a business in Argentina and
Speaker 1: I watched, and our business makes a lot of money.
Speaker 1: I watched the pay soo go from a paso to
Speaker 1: the dollar, to two to a dollar, to ten to
Speaker 1: the dollar, to twenty to the dollar, to forty to
Speaker 1: the dollar, to eighty to the dollar, to and now
Speaker 1: the block market rates a hundred and fifty to the dollar.
Speaker 1: Now our our logical policy as we sweep all our
Speaker 1: patios into dollar and we get them out of Argentine
Speaker 1: banks as soon as possible. But I've still lost millions
Speaker 1: of dollars in Argentina. So clearly I think I think
Speaker 1: it's common sense anywhere in the world you do business,
Speaker 1: if the currency is weakening or collapsing, you convert your
Speaker 1: local currency into a scarce asset. You know, if I
Speaker 1: had known about bitcoin twenty years ago, I would have
Speaker 1: bought bitcoin instead of losing all my money with paso devalued.
Speaker 1: And you know, two years ago my lawyers came and
Speaker 1: said the paso's devaluing again and there's capital controls And
Speaker 1: I said, can we buy gold? They said no, you
Speaker 1: can't get it to the airport. I said, can we
Speaker 1: buy a yacht and sailor from Argentina to the Caribbean.
Speaker 1: And it looked at me like I'm out of my mind.
Speaker 1: If I know it about bitcoin, I would have bought bitcoin, right,
Speaker 1: hard asset. Hey, listen, one thing we want to ask
Speaker 1: you about. UM. You are hosting a bitcoin conference and
Speaker 1: it's a lot of leaders, executives, UM officers and directors
Speaker 1: and advisers of corporation and what is it about the
Speaker 1: conversation around bitcoin? Do you think that has changed dramatically
Speaker 1: that tells you maybe about where it's going? And and
Speaker 1: just got about a minute here. Yeah, a bitcoin rotated
Speaker 1: from being a consumer leveraged, you know, strange digital asset
Speaker 1: to being an institutional safe haven store of value in
Speaker 1: the last twelve months. Every corporation with cash on the
Speaker 1: books has a liability as the money supply explates by
Speaker 1: fiercent a year, if they can flip it to a
Speaker 1: scarce asset like bitcoin. It becomes an asset, not a liability.
Speaker 1: That's driving thousands of companies to want to do this,
Speaker 1: and that's that those the people that will be at
Speaker 1: our conference tomorrow. Alright, interesting, interesting stuff. Is there anything
Speaker 1: that keeps you up at night over Bitcoin? Just got
Speaker 1: like twenty five seconds here. I think it's a certain
Speaker 1: that I'm gonna lose se of my value in cash
Speaker 1: instruments over the next ten years. So no, I'm not
Speaker 1: kept up at night at all. I'm happy to have
Speaker 1: done it and I and I think that everybody can
Speaker 1: benefit from discovering bitcoin is a store of value. All Right,
Speaker 1: we're gonna leave it on that note. Listen, Michael, thank
Speaker 1: you so much, really appreciate it. Michael Sailor, chairman, CEO
Speaker 1: and founder of micro Strategy joining us on the phone
Speaker 1: and her own Mike mcglogan. Pretty cool stuff, Mike, that's great,
Speaker 1: Thanks for having me. Yeah, thanks to both of you.
Speaker 1: Mike mcglogan also of our Bloomberg Intelligence team. He's a
Speaker 1: commodity strategist and follows bitcoin for us