Michael Saylor – the CEO of MicroStrategy, which recently purchased more than $400 million in bitcoin – has stated that holding BTC is far less risky than holding cash or even gold.
Michael Saylor Is Clearly a Fan of BTC
This is an interesting statement to make as over the last several years, bitcoin and crypto – despite being designed as tools for purchasing goods and services – have been considered far less stable than traditional assets such as stocks and gold, and nowhere near as strong as fiat currencies. For the most part, assets like bitcoin have remained largely speculative due in part to its volatility, as well as other serious factors.
Many stores refuse to accept crypto payments for merchandise given that the price of such a coin can fall easily and quickly overnight. We’ve been witnessing it as of late. Bitcoin had recently crossed the $11K mark, but now the asset is trading for around $500 less. Prior to that, bitcoin had moved into the $12,000 range, but it wasn’t long before the world’s leading digital currency fell to an even $10,000.
Stores and retailers are not willing to take a chance that they will lose money. A person could come in and buy $50 worth of merchandise with bitcoin, but tomorrow, the price of the asset falls, leading the store to lose out while the customer still gets to walk away with everything they bought. This establishes an unfair situation for the retailer.
So, for someone to say that bitcoin is less risky than both cash and gold is intriguing to hear and suggests that perhaps bitcoin and the crypto space are both entering mainstream status. In an interview, Saylor says that prior to the spread of the coronavirus, his company MicroStrategy had garnered about $500 million in government securities, but that the pandemic has caused him to view these securities as mostly useless. He states:
Once the real yield on our treasury got to more than negative ten percent, we realized that everything we are doing on P&L is irrelevant. We really felt we were on a $500 million melting ice cube.
He, like most investors throughout the country, began to see traditional stocks and gold fall the moment the pandemic took hold on the economy and its relative markets. In addition, he says that gold may as well be an infinite asset considering it’s mined on a regular basis. This will undoubtedly decrease “future returns,” he states, while bitcoin boasts a finite amount, and will eventually be much rarer.
More Companies Will Follow
Saylor is also confident that many companies will follow in his footsteps, and that both private and public enterprises are likely to build up their bitcoin stashes given the state of standard fiat. He says:
It will probably be private companies first because they don’t have as much inertia.