Michael Saylor Doesn’t Understand Bitcoin
On a recent episode of the Galaxy Brains podcast, Michael Saylor made the case that bitcoin isn’t a currency and that it’s best to think of it as capital and capital only.
He also shared that Tether (USDT) and Circle’s USD Coin (USDC) are the real digital currencies and unveiled his “evil genius strategy” (his own words) to get the world to adopt the U.S. dollar stablecoins as opposed to bitcoin.
In this Take, I’ll cite some of Saylor’s own words from the podcast before breaking down why many of the points he made are off base.
Capital, Not Currency
“It’s not a currency, it’s capital,” said Saylor about halfway through the episode.
“You just have to come to grips with it — it is not digital currency. It is not cryptocurrency. It is digital capital. It is crypto capital,” he added.
I searched the Bitcoin Whitepaper to see how many times the word “capital” showed up.
It isn’t mentioned once.
However, in both the title and abstract of the text, bitcoin is referred to as “electronic cash.” While cash can of course also be capital, it’s not only capital. To think of bitcoin only as capital is to deny certain of its most essential properties — like the ability to use it to transact with anyone anywhere in the world permissionlessly.
To deny bitcoin as a currency is to deny a large part of its value proposition. Bitcoin’s roles as a Store of Value (SoV) and a Medium of Exchange (MoE) are inextricably linked. For more on this, I’d advise you (and Michael Saylor) to read Breez CEO Roy Sheinfeld’s piece “Bitcoin’s False Dichotomy between SoV and MoE”.
As the episode proceeded Saylor continued to (poorly) make the case for why bitcoin is capital and not currency.
“There are a lot of maxis who are like ‘No, we want it to be a currency. We want to be able to pay for coffee with our bitcoin. Pay me in bitcoin,’” he said. “It’s like ‘Pay me in gold. Pay me in a building. Pay me with a slice of your professional sports team. Pay me with a Picasso.’”
It’s actually not like that at all.
Sure, bitcoin is scarce, somewhat like gold, Manhattan real estate, sports teams or famous paintings, but it has a number of other properties that make it far different from any of these other assets.
To illustrate a dimension of that point, I’ll cite my colleague Alex Bergeron:
I invite anyone who thinks Bitcoin is like gold to launch a custodial gold wallet.
I’ll wait.
— Alex B (@bergealex4) December 22, 2024
And then Saylor cited — wait for it — Fed Chair Jerome Powell’s take on bitcoin in efforts to drive home his point that bitcoin is capital, not currency.
“The reason bitcoin rallied past $100,000 is because Jerome Powell on stage said to the world,…
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