Bitcoin Is the Scarcest Asset, MicroStrategy CEO Saylor Says

(Bloomberg) -- Elon Musk made waves with Tesla Inc.’s announcement that it bought $1.5 billion of Bitcoin, but he is far from the first chief executive to use his rainy day fund to invest in the world’s largest cryptocurrency.

“In an expansionary, monetary environment, you want scarce assets,” said Michael Saylor, MicroStrategy Inc.’s chief executive officer, in an interview on Bloomberg Television. “The scarcest asset in the world is Bitcoin. It’s digital gold.”

Saylor has been one of the most ardent supporters of converting company cash to Bitcoin, and said last year that the Federal Reserve’s relaxing of its inflation policy helped convince him to invest the enterprise-software maker’s reserves. Bitcoin advocates point to the 21 million coins that can only ever be mined under the current version of the cryptocurrency’s software. The limit is expected to be reached in 2140.

Musk has flirted with Bitcoin for years and in December posted on Twitter a suggestive image indicating he was tempted by the token. He also inquired about converting “large transactions” on Tesla’s balance sheet into Bitcoin in a Twitter exchange with Saylor. In a series of tweets, Saylor encouraged the billionaire to shift dollars from the EV company to the cryptocurrency.

MicroStrategy holds approximately 71,079 Bitcoins, according to a February filing. The holding are valued at about $3.2 billion based on Monday’s price. Saylor even issued $650 million in convertible bonds to help finance the purchases.

Saylor held a webinar last week on how corporate treasurers should move some cash into the digital coin, which he claims drew over 1,400 firms on the session in legal considerations for integrating Bitcoin into a company’s corporate strategy. On Bloomberg Television Monday, Saylor said that the whole conference attracted about 8,000 firms.

Gold will lose out to Bitcoin in reallocations, Saylor added.

“If we bought gold instead of Bitcoin, we would be down $2 billion. It would have been a disaster,” he said. “Once people start thinking about what they want, which is a non-sovereign, safe-haven store of value, they’re going to realize that Bitcoin does the job of gold better, and you’re seeing all of the institutional flows move out of gold into Bitcoin.”

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