In an opening speech to MicroStrategy World: Bitcoin for Business, Michael Saylor, Executive Chairman of MicroStrategy, gave a masterclass on corporate finance and the power of Bitcoin to boost corporate balance sheets. Saylor was keen to highlight Bitcoin as the Single solution for capital appreciation in an inflationary environment.
In his speech, Saylor compared the cost of capital to the benchmark that a company must exceed to increase its purchasing power, arguing that “Bitcoin is the only asset that exceeds the cost of capital. Another way of saying that, East everything else is dilutive.”
Describing in more detail the TRUE cost of capital, he noted that “the S&P is the modern surrogate for the cost of capital…If you had to pick one metric and say, what is the metric that gives you an idea of how quickly the global supply of currencies is growing in dollars? Probably the S&P 500…that’s another way to look at inflation.
Saylor then highlighted his belief that all assets except Bitcoin are not accretive to corporate balance sheets despite their widespread acceptance. In particular, he highlighted the relative underperformance of silver, gold and US government bonds:
“(If companies) invest in Treasuries, they will get 3% after tax versus a cost of capital of 12% per year. And so you're holding $100 billion in capital, you're destroying $9 billion in shareholder value a year… The story here is that bonds don't have value, right? These are horrible capital assets. Money doesn't work. Gold does not keep up with the cost of capital.”
There is no second best crypto asset
The MicroStrategy executive chairman noted the key differences between Bitcoin and alternative cryptocurrencies like Ethereum, expressing the importance and necessity of proof-of-work based consensus in creating a digital product.
“You could see the writing on the wall when the Bitcoin spot ETF was approved in January. At the end of May you will know that Ethereum will not be approved. And when Ethereum is not approved this summer, it will be very clear to everyone that Ethereum is considered a crypto asset security, not a commodity. After that you will see this (for) Ethereum, BNB, Solana, Ripple, Cardano – all in the stack.
Regarding Bitcoin's energy consumption, Saylor invoked the idea of a “physical connection to the real world” in the Bitcon consensus. He described the network as having “raw digital power that stands in the way of anyone attempting to undermine the integrity of the network…The network feeds on electricity, which creates a dynamic of decentralization that drives the entire network until the end. the grid in search of stranded energy.
It goes up, forever
Saylor's conviction and use of physics-based metaphors were always present when he spoke about Bitcoin's price appreciation and continued monetization. “It never diminishes. The graph never decreases. It only goes one way. Bitcoin is a capital lever. It's a one-way ratchet. Archimedes said: Give me a lever long enough and a place to stand and I can move the world. Bitcoin is the place to be.»
“There is no idea more powerful than the digital transformation of capital… No force on earth can stop an idea whose time has come. It is an idea. His time has come. It's unstoppable. And so I will end with the observation that Bitcoin is the best. The best what? The best.”