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Yahoo Finance’s Alexis Christoforous and Julia La Roche along with Michael Saylor, MicroStrategy co-founder, discuss bitcoin and the future of cryptocurrency.
Michael Saylor, the CEO of business intelligence software company MicroStrategy (MSTR), the first publicly traded company to add bitcoin to its balance sheet, sees an “avalanche” of corporations that will embrace the cryptocurrency.
“The pitch is bitcoin (BTC-USD) is digital gold, and it’s sitting on the world’s first digital monetary network,” Saylor told Yahoo Finance Live on Wednesday, two days after electric car maker Tesla (TSLA) made headlines for buying $1.5 billion worth of bitcoin.
He also pointed to the digital currency’s performance versus the U.S. dollar, making a case that “bitcoin has emerged as an institutional safe-haven asset.”
‘Cash is going to be a depreciating asset’
In Saylor’s view, bitcoin can convert a balance sheet “from a liability into an asset,” something the enterprise software company has done itself. As of this publication, MicroStrategy owns 71,079 bitcoins, acquired for $1.145 billion, a position worth more than $3.1 billion at current prices.
Last week, MicroStrategy hosted a virtual conference where Saylor shared his bitcoin corporate playbook and strategy with executives from more than 1,000 companies.
According to Saylor, against a macroeconomic backdrop of low-interest rates and central banks printing money, companies are “beginning to realize that their cash is going to be a depreciating asset and the need to turn the balance sheet into an appreciating asset.”
Bitcoin reached record highs this week after Tesla revealed it bought $1.5 billion worth of the digital currency, and that it plans to start accepting bitcoin as payment in the “near future.” The joke-based currency dogecoin also surged after Tesla CEO Elon Musk tweeted about it last week.
“Elon Musk is very progressive, and Tesla is very progressive. I think this is part of a trend toward the digital transformation of balance sheets as people move from analog traditional treasury assets, like cash and bonds, into bitcoin,” Saylor added.
To be sure, Saylor doesn’t think bitcoin is going to take on the U.S. dollar. He thinks the euro and the dollar “are going to do just fine.”
“I think that cryptocurrency is a misnomer. Bitcoin is digital gold. What bitcoin is doing is rapidly replacing gold as a non-sovereign store of value,” the executive added.
He estimates that 150 million people are already using bitcoin as “digital gold.” He predicts “a billion people will want to hold digital gold on a mobile device in the next five years.”
“I think that the people that ought to be really concerned are gold bugs. Anybody that’s storing their money in gold has got a big bull’s eye on their forehead, and that’s at risk,” he added.
Shares of MicroStrategy fell $298.46, or a decline of 23.45%, to close Wednesday’s trading session at $974.48, as bitcoin also fell off of its recent highs to close down nearly 5%.
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