[Editor's note: Michael Saylor's and Vala Afshar's opinions are their own, and their enthusiasm for Bitcoin should not be construed as investment advice. For a nuanced introduction to cryptocurrency, please see: "What is crypto? The business starter guide to cryptocurrency."]
Michael Saylor is the Chairman and CEO of MicroStrategy (MSTR), a publicly traded business intelligence firm that he founded in 1989. Saylor was the creator and founder of Alarm.com, one of the first home automation and security companies, and Angel.com (sold to Genesys for $110 million in 2013), one of the first cloud-based interactive voice response service providers. Saylor is a named inventor on more than 40 patents. Credited as the inventor of relational analytics, he led MicroStrategy into the fields of web analytics, distributed analytics, mobile analytics, cloud computing, mobile identity, and IoT. Saylor is the author of the book "The Mobile Wave: How Mobile Intelligence Will Change Everything, published in 2012. The book anticipated the impact of mobile, cloud, and social networks on worldwide political and economic development, along with the rise of Apple, Amazon, Facebook, and Google. Saylor founded and serves as trustee for the Saylor Academy (saylor.org), a non-profit organization that has provided free education to 800,000+ students.
Michael Saylor is also an advocate for the Bitcoin Standard. His company MicroStrategy owns ~91,579 Bitcoins. The Board of Directors of at MicroStrategy are paid in Bitcoin. Saylor believes that Bitcoin is the most powerful and disruptive technology of our lifetime. To learn more about why companies should invest in Bitcoin, Ray Wang, CEO and founder of a Silicon Valley-based advisory firm Constellation Research, and I invited Michael Saylor to our weekly show DisrupTV. Here are the key takeaways from our conversation with Michael Saylor.
Digital transformation of assets is the fasted form of current transformation
In the last 12 months we saw acceleration of digital transformation in two areas. The first areas were in lines-of-business including sales, services, and marketing with decentralized and digital only stakeholder engagements. The velocity and efficiency of how companies sell, market and service clients grew rapidly. The second area of digital transformation was the transformation of assets. This is what Bitcoin is all about. Saylor referenced the digital transformation of photos, music, videos and books and their fast movement. Now we see transformation of gold, silver, bonds, stocks and money. This is a profound change that will impact every company and every person on earth. And the digital transformation of assets is moving faster than any other transformation.
Bitcoin is the strongest treasury asset for institutional investment
According to Saylor, if you asked any company on February of 2020 about their Bitcoin strategy, you would likely hear 'What is Bitcoin?' or 'Why do I need a Bitcoin strategy?' Saylor believes all of the current treasury strategies are broken if you are buying low yielding bonds. Money supply is expanding and purchasing power is falling dramatically. The idea behind Bitcoin, applying first principles, is you recognize loss of purchasing power and then apply a different treasury strategy. MicroStrategy determined that Bitcoin was the strongest treasury asset that it could find. On February 3-4, 2021, Saylor held a "Bitcoin for Corporations" conference. The meeting was an attempt to convince other corporate executives of the benefit of Bitcoin for their portfolios. Executives from over 1,400 firms were in attendance. Among the guests were SpaceX executives, according to news reports. On Monday, February 8, 2021, Telsa, Elon Musk's electric vehicle firm, announced it had purchased $1.5 billion-worth of Bitcoin. Saylor noted that Bitcoin has increased by 200% per year for a decade, and by 800% in 2020. Converting a depreciating asset to a trillion dollar asset that is appreciating, providing a positive cycle for your shareholders. Saylor said the only disagreement he had with Musk is that he had recommended that Tesla should buy $10 billion in Bitcoin.
2021 is 'Year One' of Bitcoin Institutional Investments
The first mover advantage is a real advantage for cryptocurrency investors. If you are the first city, the first country or first company to invest in Bitcoin, you can significantly benefit from this appreciating asset. Saylor believes you can create a dynamic with assets trading up, generating investment income and you are lifting the balance sheet instead of P&L. Saylor points to the 'K-shape' recovery with Wall Street companies increasing their balance sheets by 25-40% doing nothing, mainstream companies have to work 25-40% harder to gain nothing, and if your business strategy is asset poor and manufacturing rich, then you are sailing against the wind. Only 32 out of the 40,000 publicly traded companies have Bitcoin on their balance sheet. In February of 2020, Bitcoin was a consumer play, according to Saylor, but now Bitcoin is an institutional play. Bitcoin is now digital gold. MicroStrategy was the first public company to invest in Bitcoin, followed by Square, Tesla and others. With respect to institutional adoption of Bitcoin, Saylor notes that 'Year zero' was from March 2020 to February 8, 2021 when Tesla announced their purchase of Bitcoin and 'Year one' with respect to legitimate institutional investments in Bitcoin is now and the next 36 months.
The mobile revolution powered by mobile wallets will drive adoption of strong digital assets, including Bitcoin
Saylor forecasts that 8 billion people will have access to digital wallets. The mobile wave will provide access to one layer of payment network based on dollars or euros or yen, on compliant payment rails. The second layer is access to saving accounts with access to high quality assets -- this includes Bitcoin, ETF, and stocks. Saylor believes losing assets, assets that provide negative growth, will be squeezed out. Strong assets and strong currencies will win. Saylor believes there will be 5 billion mobile wallets with US dollars and that the US dollar will be strong and a winner. Saylor also believes that Bitcoin is the most secure database and network in the world with respect to cybersecurity threats. The security threat with Bitcoin is at the layer-two level. Saylor provided numerous threat mitigation options for users to consider.
Your future compensation will be in Bitcoin
Saylor reminds us that Bitcoin is a saving account that has been yielding 200% tax free interest for a decade. It is a good way to save money. The Bitcoin savings account is the best method of growing your wealth. The new company stock program can be one that is based on compensation with Bitcoin. Saylor believes that we will see an explosion of financial offerings based on Bitcoin in the next 12 months.
I highly encourage you to watch our entire conversation with Michael Saylor to learn more about the future of digital currencies and the importance of institutional investments in Bitcoin. Saylor also shared very exciting digital transformation programs and offerings from MicroStrategy. His company is rapidly removing friction from business processes and customer engagements. Saylor provided several examples of how MicroStrategy is helping their clients create value at the speed of need. I also encourage you to follow Saylor on Twitter for daily insights on market trends.