Bitcoin advocate Michael Saylor says the crypto currency presents an opportunity for New Zealand investors, and suggests domestic businesses should acquire it to boost their balance sheets.
“It represents an extraordinary financial opportunity for people in New Zealand, and that’s kind of why I’m pleasantly surprised that you’re here,” MicroStrategy executive chairman Saylor told Markets with Madison in Washington DC.
“The people that really need it [Bitcoin] are the global investors that are not in the major cities.
“Because you can buy into the most scarce, desirable, global, digital property, and you’re getting the same investment proposition as a New York billionaire.
“[New Zealanders] need it more. Trust fund babies in Manhattan don’t need it, they’ve got a lot of other [investment] options.”
Saylor said investors like himself – who personally owned at least US$1.1 billion ($1.8b) worth of the crypto currency – were actively attempting to drive its price higher, meaning buyers of Bitcoin would stand to benefit.
His Nasdaq-listed technology company was the largest corporate holder of Bitcoin, with more than 225,000 Bitcoins on its balance sheet worth more than US$16b.
Saylor suggested New Zealand businesses could follow his adoption playbook and acquire Bitcoin as a Treasury asset.
“If you’ve got a company that’s a low-growth company, geared to the New Zealand economy, if you start to invest your balance sheet into Bitcoin, you are now with a 1% grower in New Zealand bolted on to a 50% high-growth, Big Tech, digital monetary network.
“How many companies in New Zealand grow 20% a year for 10 years in a row? The odds are just about next to none.
“But what are the odds of Bitcoin going up 20% a year? That’s actually my bear case.”
Saylor expected Bitcoin to reach a price of US$13 million – it was currently about US$68,000.
This year, financial institutions including BlackRock launched exchange-traded funds, offering investors exposure to the crypto currency through the stock market for a low fee.
He believed Bitcoin’s next big moment – more listed companies or governments adopting Bitcoin – would be driven by banks accepting it as money in accounts or as collateral for loans.
“Banking is just the next logical step,” Saylor suggested.
“If you want to see all the people with the money and the power in the world embrace the asset, they will do it when their vendors support the asset. That’s a rippling thing.”
Some Bitcoin investors were against Saylor’s suggestion banks should become more significant custodians of the asset because it would centralise a currency popular for its decentralised nature.
In the interview he defended his position, arguing it increased the safety of the asset.
“I think when the Bitcoin is held by a bunch of crypto-anarchists who aren’t regulated entities who don’t acknowledge government or don’t acknowledge taxes, or don’t acknowledge reporting requirements, that increases the risk of seizure.
“When you have regulated, public entities like BlackRock and Fidelity and JP Morgan and State Street bank holding the asset, well, all the lawmakers and all the law enforcement arms, they’re invested in those entities.
“So, there’s no way all the senators and all the congressmen are going to seize the assets ... because that’s where all their retirement money is.”
Bitcoin’s peer-to-peer network had no central power controlling it and no central point of technological failure.
Speaking to the characteristics of the Bitcoin network and its invention by the pseudonymous Satoshi Nakamoto, Saylor said it achieved scarcity and had an “immaculate conception”.
“Satoshi launches it, walks away forever, disclaims beneficial ownership – it’s an immaculate conception.”
The initial Bitcoin mined by Nakamoto to secure the network had not been sold, Saylor said.
Bitcoin’s supply was capped at 21 million tokens, meaning it had an expected deflation rate, unlike fiat currencies issued by central banks that targeted an annual rate of inflation.
While many other crypto currencies had been launched, Saylor said Bitcoin was clearly the winner.
“It’s because all the smart money in the world decided that’s the winner. Did it have to be? Well, no.
“It’s like, why do we speak English? Because all the rich, powerful people decided on English. Could it have been a different language? It could have been French.”
Explaining why he believed Bitcoin was a superior asset, Saylor said it was “clean money”, akin to “economic steel”, compared with dirty money such as sovereign debt, which had a negative real yield after tax.
“It’s like forcible chemotherapy for your healthy 14-year-old teenager,” he said of sovereign debt.
“That’s the scourge, the burden of humanity that they’ve been hauling for thousands of years.
“When you ask, ‘What is human progress, what elevated the civilisation?’, it’s technology.”
Saylor himself was once against Bitcoin, comparing it to online gambling in a 2013 post on social media platform X (formerly Twitter).
Acknowledging it, Saylor said: “Everyone’s against Bitcoin before they’re for it.”
“I’m sure the first guy with fire scared a bunch of other tribesmen. No one wants to get burned. Yet without fire, we’re not better than the apes.”
When asked why he bothered being so publicly bullish on Bitcoin, Saylor said he wanted to “fix the money”.
“If the money is broken, all eight billion people have toxic capital. All 300 million companies have toxic capital.”
Watch part one and two of Michael Saylor discussing Bitcoin and his company MicroStrategy on Markets with Madison in the videos above.
Get investment insights from executives and experts on Markets with Madison every Monday and Friday here on the NZ Herald, on YouTube and wherever you get your podcasts.
Sponsored by CMC Markets.
Madison and video producer Corey Fleming travelled from Auckland-New York courtesy of Qantas.
Experience the Qantas difference on travel to North America, including direct flights from Auckland to New York.
Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is the host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
Plus: The CEO puts its ingredients products to the test in the kitchen.