Saylor advocates for a long-term focus on Bitcoin's potential. | Credit: BTCPrague
Key Takeaways
- Self-custody crypto disrupts old rules, said MicroStrategy CEO Michael Saylor
- Saylor explained that Bitcoin challenges how we regulate money.
- He used a historical analogy to position Bitcoin as a potential hedge against economic turmoil.
- Saylor advocated for a long-term focus on Bitcoin’s potential, believing its value could reach far beyond $100,000.
At the recent BTC Prague conference, Michael Saylor, CEO of MicroStrategy, spoke about Bitcoin and financial regulations.
Among other things, he said Bitcoin’s potential goes far beyond the $100,000 price target than some are predicting.
The Challenge of Regulation in Crypto Ventures
Saylor began by addressing businesses’ intricacies when dealing with customers and managing assets under a single entity. He said that such activities quickly lead to regulatory scrutiny, a significant hurdle for companies in the cryptocurrency sector.
According to Saylor:
“If you are doing anything that has customers or accumulated assets under an entity, that becomes quite tricky, where you very quickly get into a regulated world.”
A central theme of Saylor’s talk was the shift towards self-custody models in cryptocurrency. This allows people to hold and manage their assets independently of traditional financial institutions.
Saylor said:
“The interesting part is the self-custody angle of this, where you can start to move away from the way the rules were defined for financial services.”
Does Traditional Regulation Apply to Bitcoin?
Saylor discussed how traditional financial rules might not neatly apply to Bitcoin and other cryptocurrencies, particularly in areas like payment processing and trading.
He posed a question central to the current regulatory debate:
“Does it apply for Bitcoin?”
Reflecting on the evolution of crypto companies in the US, Saylor noted that many started as tech companies but were perceived by the public and regulators as financial services providers.
This misalignment has led to a regulatory gap. Saylor said:
“For the last ten years, most of the companies that started out in the bitcoin space were really tech companies that looked like financial services companies.”
He used Coinbase as an example , noting that only recently has it begun to be recognized as a financial services company.
Saylor touched on the ongoing efforts within the cryptocurrency industry to achieve regulatory recognition and legitimacy.
He described a scenario where companies are constantly seeking the “regulatory stamp” to affirm their status and enable them to offer broader services, similar to traditional banks. He said:
“There’s sort of a strange arbitrage between these different institutions, companies, and everyone’s just kind of chasing that regulatory stamp to say, we are a bank and therefore we can do x.”
Betting on Chaos: A Philosophical Perspective
In a profound extension of his talk, Michael Saylor delved into the philosophical implications of investing in times of chaos, likening it to “loaning your money to the gods of chaos.”
He posed a historical scenario to illustrate his point:
“I place you in Europe before World War Two… You can own any company, any piece of land, any currency, or you can own the one bank in Switzerland.”
He used this metaphor to highlight how, in times of extreme disruption like war, traditional investments can become exceedingly risky, whereas entities that manage to hold onto capital—such as a Swiss bank during wartime—can emerge with significant value.
This scenario raises the question:
“Are you in the business of benefiting from chaos, or are you in the business of attempting to stop it?”
Bitcoin Doesn’t Have to Replace Fiat, Says Saylor
Saylor also said that if people are pro-Bitcoin, that doesn’t neccesarily mean theyhave to be against fiat.
He said:
“Before Bitcoin, don’t be against fiat. If you go to Bernard Arnault, one of the richest men in the world, and you say to Bernard, well, here’s a good business, selling handbags, selling luxury items.
Bernard realises he’s not going to take all his money and buy euros or buy dollar bonds or buy pesos, but that doesn’t mean he won’t price his handbags and euros and dollars.
The richest man in the world still will price things in a local currency, recognising that people would rather trade the currency for the handbag back or trade the currency for the champagne or trade the currency for the Bitcoin.
We’re for something which is beautiful and elegant and powerful and inspirational.
We don’t need to be against the other thing.”
“Think in Bitcoin” for Smarter Investments
Saylor also explained how it’s important to “think in Bitcoin”. He emphazised the importance of recalibrating one’s financial mindset to think in terms of Bitcoin, especially given its impressive growth trajectory.
Many Bitcoin holders, according to him, surprisingly, fail to fully use this perspective.
He said that over the past four years, Bitcoin has appreciated by an average of 50% annually. This trend suggests the cost of capital or the “risk-free rate” stands at 50%, presenting an opportunity to borrow at lower rates and invest in Bitcoin, thereby capturing the substantial difference.
Despite this, claims Saylor, some Bitcoin businesses still opt to raise funds at a lower return rate of 15%, which doesn’t utilize Bitcoin’s potential effectively. To fully capitalize on Bitcoin’s financial benefits, one should consider investment opportunities that offer returns exceeding 24% annually, adjusted for risk over the next decade, in order to outpace Bitcoin’s conservative growth forecast.
Keep Your “Laser Eyes” On – Bitcoin’s Potential Goes Far Beyond $100,000
Saylor articulated a powerful message about maintaining focus and commitment in the context of Bitcoin’s growth, using the metaphor of “laser eyes.”
This term symbolizes a steadfast belief in the cryptocurrency’s potential to reach $100,000.
Saylor criticizes those who temporarily adopt this bullish symbol only to abandon it after short-term gains.
He warns against declaring premature victory when Bitcoin experiences significant price increases.
According to Saylor, removing “laser eyes” symbolizes a loss of focus. He says that Bitcoin’s market cap could potentially reach hundreds of trillions of dollars in market value. Saylor’s advice is to maintain focus on Bitcoin’s long-term potential, rather than getting sidetracked by fleeting successes or other opportunities, no matter how tempting they may appear.
He said:
“Watch Bitcoin go up $20,000 and then take the laser eyes off and declare victory, right? Don’t take the laser eyes off. The laser eyes tell you a message, which is you should listen. They signify the fact that you should avoid diluted distractions.
When Bitcoin goes from 10,000 to 10,0000 and you declare victory. So you launch 16 crappy businesses in 14 stupid industries because you’re a genius, right? You took the laser eyes off pride coming before fall, and bitcoin is going from a trillion to 10 trillion to 100 trillion to 500 trillion. And at that point it’ll be growing better than everything else.”
Saylor also said that because he made a mistake selling his Bitcoin in the past, he is not planning to sell anymore. He said:
“I will still be buying Bitcoin even when it’s $8,000,000.”
