A critic of Covid-19 lockdown measures, Saylor exhibits many of the libertarian-inflected tendencies of the Bitcoin true believer. For him and his ilk, Bitcoin is an asset in which funds may be parked (and hopefully grow in value) while mostly outside the reach of the government-managed economic system. Like goldbugs, they have a distrust of federal authority and think that the economic lesson of the Covid-19 crisis is that scarcity reigns—in fact, should reign—and that central banks, by simply printing money through quantitative easing and relief efforts like the Cares Act, are risking inflation and cheapening the value of the dollar. The virtue of Bitcoin is that it’s limited—according to the code underpinning the cryptocurrency, only 21 million Bitcoin will ever be “minted,” with about 18.5 million already in circulation—so better to get in as soon as possible. Even Saylor, who has also called Bitcoin “digital gold,” has his regrets about not buying more earlier: “I wish I knew then what I know now,” he told a journalist in September.
Saylor described his company’s decision as a way of dodging inflation, taxes, and fees, and putting extra capital to more productive use. He says that the company will hold onto its Bitcoin for 100 years. But a company struggling to increase revenue that chooses to put its cash reserves into a speculative digital cryptocurrency is reason enough to take pause. Saylor and MicroStrategy’s history of alleged fraud is another one.
The truth is that Bitcoin, like gold, is worthless. It doesn’t do anything; it has no inherent value and can’t be converted to some other purpose. It’s not backed by a government, making it most useful to transnational crime networks, intelligence agencies, and anyone else looking to keep some assets off the books. The electricity cost of creating, or “mining,” a Bitcoin—which requires accessing the Bitcoin network and making a complicated mathematical calculation that requires tremendous computer power—makes it indefensible. (The more Bitcoin that are mined, the more complicated the calculations become.) Bitcoin works, if at all, because a band of rich speculators has decided it should. Institutional investors are pouring billions into Bitcoin, which some analysts think account for much of its movement in recent months. MicroStrategy itself counts the finance giant BlackRock as its biggest outside shareholder. (Saylor has said that he thinks much Bitcoin trading data is inaccurate.)