MicroStrategy CEO Michael Saylor told CNBC on Tuesday that he believes bitcoin will continue to add value to the point where the cryptocurrency will become a “lasting influence” for the global financial system. all. He predicted, in a bold call, that the market value of bitcoin would be worth $ 100 trillion one day.
Saylor’s comments on “Squawk Box” came as the price of bitcoin fell more than 10% on Tuesday, dipping below $ 50,000 per unit. The lower move brought the market value of the world’s largest cryptocurrency back below $ 1 trillion, just days after the volatile digital assets surpassed that level for the first time.
However, Bitcoin was still up 60% from the beginning of the year and up more than 360% in the last 12 months.
“There’s a $ 500 trillion silver planet and the outer cover is like cash, then you have stocks, bonds, real estate. It’s worth $ 10 trillion worth of gold, $ 1 trillion worth of bitcoin. Bitcoin is going to turn gold, and it’s going to cover the entire cap of the gold market, ”said Saylor, who has been one of the most visible evangelists for bitcoin since the start of its software company campaign buys it in August.
“Then it’s going to introduce negative debt that will yield yield and other cash indices until it grows to $ 100 trillion. As soon as it reaches $ 10 trillion, its volatility will be much smaller , “continued Saylor. “As it marches towards $ 100 trillion, you are going to see the growth rates fall, the volatility fall, and it is going to have a lasting impact on the the entire financial system of the 21st century. “
In addition to the importance of bitcoin at his company, Saylor told CNBC that he also owns the digital coin in a personal capacity.
Bitcoin has been dubbed “digital gold” by some crypto bulls, and they are building on its potential to be a source of value because its total supply is limited to 21 million coins. Currently, 18.64 million coins are in circulation, according to Coindesk. New bitcoins are coming on the market as a reward for so-called miners, who use high-powered computers to authenticate transactions across the decentralized system.
Saylor unveiled his big vision for bitcoin a day after Finance Secretary Janet Yellen once again raised questions about digital coins. She said she was concerned about her role in “illegal finance” and the energy consumption used for bitcoin mining.
“It is a highly speculative asset and you know I think people should be aware that it can be very volatile and I am concerned about losses that investors may suffer. , “Yellen, who also served as Federal Reserve chairman, reported at the New York Times DealBook Monday. conference.
In an interview last week on CNBC, St. Louis Fed President James Bullard said he was not concerned about bitcoin’s ability to spend U.S. dollar status as the world’s reserve currency.
“I’m just thinking for Fed policy, it’s going to be a dollar economy as far as the eye can see – a real global dollar economy as far as the eye can see – and the price of gold going up or down, or the price of bitcoin going up or down, that doesn’t really affect that, “Bullard told Squawk Box. “
Saylor said he sees the demand for bitcoin growing in the coming years, not just from institutions but from individuals around the world, which would affect its push up its value.
“I think you can expect a billion of us to store the value, in fact a savings account, on a mobile device within five years and they are going to want to use something like bitcoin, “he said, describing it as” the strongest digital money network. “
Last week, MicroStrategy completed its second flexible debt offering with the goal of using the net profits to buy bitcoin. First debt sales came in at $ 650 million in December. The offer completed Friday generated about $ 1.03 billion in net cash, with the notes carrying a 0% coupon rate.
MicroStrategy unveiled its first crypto purchase in August, putting existing money on its balance towards nearly 21,500 bitcoins. The company had nearly 72,000 bitcoins, as they filtered regulation on Feb. 2. At about $ 47,000 in trading on Tuesday, that share is worth nearly $ 3.4 billion.
Saylor has argued that a company should keep bitcoin as an investment, rather than holding short-term money or government bonds, because the digital coin will yield much better returns in the long run. In December, Saylor publicly urged Tesla CEO Elon Musk to do so. Just over a month later, Tesla announced that it had purchased $ 1.5 billion worth of bitcoin.
Some have been skeptical about pushing MicroStrategy into bitcoin, especially when it comes to taking out debt to fund additional purchases. In a note to clients in late January, Citi analyst Tyler Radke described it as “aggressive” and a “breakdown” for some software investors. “
Shares of MicroStrategy have faded since the Virginia-based company began acquiring bitcoin while investors looked for ways to access the digital coin. The stock traded around $ 120 in early August before the company entered the crypto space publicly, but began building a rally during the fall and into 2021.
MicroStrategy stock hit its highest level since the dot-com rise on Feb. 9, reaching $ 1,315 per share. It has pulled back sharply in the past few days, falling over 20% in Tuesday ‘s session to less than $ 700 per share. However, MicroStrategy has almost doubled this year and is up 400% in the last 12 months.
As bitcoin prices fell, Tesla shares also suffered huge losses, down as much as 20% in the last two sessions. Tesla’s fall on Tuesday pushed the stock negative for 2021. However, Tesla was still up 250% in the past 12 months.