Michael Saylor On the Geopolitical Logic of the Strategic Bitcoin Reserve

In his presentation at a Cantor Fitzgerald conference, Michael Saylor discussed the economic challenges posed by monetary inflation and proposed Bitcoin as a solution.

Economic Challenges:

Saylor highlighted that few asset classes have outperformed monetary inflation over the past 14 years, with monetary inflation averaging 15.4% annually. He noted that traditional treasury strategies, such as holding sovereign debt, often underperform the cost of capital by up to 10% per year, leading to shareholder value erosion.

Bitcoin as a Solution:

Saylor presented Bitcoin as a superior asset, outperforming monetary inflation and the cost of capital. He emphasized Bitcoin’s average annual return (ARR) over various periods: 46% over 6 years, 78% over 8 years, 65% over 10 years, 103% over 12 years, and 168% over 14 years. He also noted that Bitcoin has been the strongest asset in 11 of the past 14 years.

Advantages of Bitcoin:

Saylor argued that Bitcoin offers several benefits over traditional assets:

• Digital Capital: Bitcoin represents the transformation of capital from physical and financial assets to digital assets, providing advantages such as divisibility, programmability, and global accessibility.
• Risk Mitigation: Unlike traditional assets, Bitcoin is not subject to risks from competitors, countries, corporations, creditors, cultures, or currencies.
• Capital Preservation: Bitcoin serves as a store of value, preserving capital without the physical risks associated with real estate or other tangible assets.

Saylor concluded by advocating for the adoption of Bitcoin as a strategic asset to address economic challenges and preserve capital in the face of monetary inflation.