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, bitcoin does not compete with the dollar, it competes with gold,” he said.
Oddly enough, Saylor said this without acknowledging that the man who said this is the head of the institution that Bitcoin should theoretically replace.
USDT, Not BTC
In the interview, Saylor also drove home the point that the real digital currencies are US dollar stablecoins.
“The cryptocurrency, the digital currency, is Tether (USDT) and Circle (USDC),” he said. “It’s a stablecoin US dollar — that’s the digital currency.”
This is when I started to get nauseous.
For those who don’t yet know this, Bitcoin came into the world in the wake of the Great Financial Crisis of 2008, when the US government in conjunction with the US Federal Reserve opted to print US dollars en masse (debase the currency) to bail out failing banks, the burden of which was laid both on the US taxpayers and US dollar holders worldwide.
Bitcoin is a decentralized money that was created as an alternative to the US dollar and all other fiat currencies. Trying to convince people that bitcoin is not this is disingenuous at best, deeply manipulative at worst.
But this isn’t even the worst of what Saylor had to say on the episode.
He went on to propose that the banks that got bailed out in the 2008 financial crisis issue their own stablecoins, which would help prop up the US debt market.
“They ought to just create a normal regime to issue digital currency backed by US treasuries,” said Saylor.
“The US ought to have a framework so Tether relocates to New York City. That’s what you want, right? And then you ought to basically have a free-for-all where JP Morgan or Goldman Sachs can issue their own stablecoin,” he added.
No, Michael Saylor, that’s not what I want. In fact, it’s very far from what I want.
I don’t want Tether anywhere near New York City (my hometown) and I don’t want JP Morgan and Goldman Sachs issuing US dollar stablecoins that they control, essentially the equivalent of CBDCs.
When I think about Goldman Sachs, the first thing that comes to mind is award-winning writer Matt Taibbi’s description of the institution from his New York Times bestseller Griftopia.
“The first thing you need to know about Goldman Sachs is that it’s everywhere,” began Taibbi in the book. “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Goldman Sachs, much like the US Federal Reserve, is an institution that sucks the life force from humanity. Bitcoin was designed to take power away from such institutions, not strengthen them.
Toward the end of the episode, Saylor laid out his master plan for bitcoin and US dollar stablecoins.
Here it is:
“Everybody outside the U.S. would give their left arm to be capitalized on US bonds. So, my strategy would be — and I really think it’s an evil genius strategy; it’s so good that our enemies would hate us, but our allies would complain, too. And the U.S. would make $100 trillion in a heartbeat.
Here’s the strategy: You dump gold, demonetize the entire gold network. You buy bitcoin — 5 million or 6 million bitcoin — and you monetize the bitcoin network. All the capital in the world, sitting in Siberian real estate or Chinese natural gas or every other currency derivative that’s held as a long-term store of value — Europeans, Africans, South Americans, Asians, they all just dump their crappy property and their crappy capital assets and they buy bitcoin. The price of bitcoin goes to the moon.
The U.S. is the big beneficiary. U.S. companies are the big beneficiary. And while you’re doing that, you normalize and support digital currency, and you just define digital currency as the U.S. dollar backed by U.S. dollar equivalents in a regulated U.S. custodian that’s audited. What happens next?
$150 billion of stablecoins goes to $1 trillion, $2 trillion, $4 trillion, $8 trillion, probably somewhere between $8 and $16 trillion, and you create $10 to $20 trillion of demand for U.S. sovereign debt.
While you’re taking away a little bit of the demand because the capital asset of bitcoin grows, you’re adding back the demand to back the stablecoin. [The digital US dollar then] replaces the CNY, the Rubble. It replaces every African currency. It replaces every South American currency. It replaces the euro.
If you really believe in U.S. world reserve currency and U.S. values, every single currency in the world will actually just merge into the U.S. dollar if it was freely available.”
At this point, I stopped listening to the episode and projectile vomited all over the New York City subway car in which I was sitting.
I didn’t come into the Bitcoin space to help the U.S. run a scheme in which it acquires a large percentage of the bitcoin while hooking the world on its trash currency, and it deeply saddens me that someone that many in the Bitcoin space look up to would come up with such a conniving plan.
Bitcoin Is Money
Bitcoin is money. It’s a type of money that cannot be censored or debased that has spectacularly grown in value over the past decade, making it one of, if not the most, powerful tool ever created for individuals.
To think of it as anything less, or to try to convince people that a new iteration of an incumbent version of money is better than it, is to be deeply misinformed.
While bitcoin is capital, that’s not all it is, and please don’t let Michael Saylor or anyone else convince you otherwise.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.