Disclaimer: Any information found on this page is not to be considered as
financial advice. You should do your own research before making any decisions.

Michael Saylor on BTC Price Projections

Takeaways from three interviews of Michael Saylor

In the first video, posted on 1/11/2021, Michael Saylor sees:

  • Price of bitcoin reaching \$500,000 once it fully demonetizes gold.
  • 50% to 75% of \$300T to \$350T of monetary energy currently parked in cash, sovereign debt, bond index funds, stock index funds, and real estate index funds is just looking for a store of value.
  • Total value locked in bitcoin (IE, market cap of bitcoin) eventually growing to somewhere between \$100 trillion and \$300 trillion as it demonetizes those other assets that are currently being used as a store of value.
    • This implies a price in the range of \$4.8M to \$14.3M per coin in today’s dollars.

In the second video, posted 7/9/2021, Saylor says:

  • 100% returns per year in bitcoin will not continue forever. Eventually the law of large numbers will kick in and annual bitcoin returns will decrease.
  • No reason why the bitcoin market cap won’t flip the \$10T gold market cap.
  • Bitcoin will absorb 10% and even 30% of the value currently locked in bonds and the global equity market, which is just looking for a store of value.
  • Eventually, the bitcoin market cap will go to \$10T, \$20T, $40T, and even \$80T.
    • This implies per coin prices of \$480,000, \$950,000, \$1.9M, and \$3.8M, respectively.

In the third video, posted 9/22/2022 following a volatile 12 months for all financial assets, Saylor comments:

  • Bitcoin is a good inflation hedge over 5 years or 10 years.
  • The last twelve months have been devastating for all financial assets due to Fed quantitative tightening.
  • The right timeframe to hold bitcoin is a decade or more.

  • Lastly, Saylor seems to caution that due to market conditions and current Fed policy the 12 month period starting in late September, 2022 is very difficult to predict - he has no advice. This implies it could be a volatile time for bitcoin.

Transcription follows:

00:00 I that demonetizing gold gets you to \$500,000, and that’s simply pulling all the monetary energy off the gold rock from gold bugs who believe that gold is a store of value and a safe haven. But, its important to note there are a lot of organizations and a lot of investors who don’t use gold as their safe haven. They use government debt. Sovereign debt. And so cash is a safe haven, and sovereign debt is a safe haven, and another safe haven people use as a store of value is an index fund. Bond index funds and stock index funds. Like the Russel 2000, the S&P 500, the Dow index. So all told, I think there’s between \$300T and \$400T worth of fiat instruments, cash, debt, stock, commercial real estate indexes, something in that range. If you look at all of that. Half of that monetary energy, maybe more, even 50%, 75%, is simply seeking a store of value as a container. When I buy the S&P 500 index, or the vanguard fund, I’m not buying it because I equally love all 500 S&P stocks, equally, in proportion to their market caps. That’s not why I bought the index. I bought the index because I had a million dollars, and I knew if it was cash it would be debased in purchasing power. And so I needed to put it into something which was going to return more than the economic hurdle rate, or the cost of capital.

01:58 So, some people choose to preserve their wealth by investing in gold. Some people choose to preserve their wealth by buying gold. A land bank. I’m just going to buy a bunch of farmland. I don’t love it, I just bought it. Some people choose to preserve their wealth by buying debt. There’s like \$100T of sovereign debt, right? 10-year treasuries, 30-year treasuries, 3-year, 1-year treasuries. There’s like \$17T of debt that’s negative yielding, I think the last number I saw. Why would you buy a bond that you have to pay to own? Isn’t the obvious answer, its a safe haven? I don’t want to bury the cash, I don’t want to hold cash, I don’t want to bury the cash under my mattress. I don’t want to hold metal. And so I’ll buy a bond until I figure out what to do.

02:55 So ultimately, the amount of monetary energy in the world that’s looking for a safe haven store of value has got to be between \$100T and \$250T. Why not all of it? Why not \$300T? Or \$350T? The total sum of everything. Well, the answer is, at the right price I would own a stock because I believe in the stock. Like, for example, Tesla. If you bought Tesla at the beginning of the year, it went up by a factor of 5. And if you love Tesla, and if you believe its a growth stock. Then you invest. You’re making an investment decision. I might make an investment decision in a stock that I thought was going to grow faster than the cost of capital. If you believe that a stock can grow its revenues and cash flows more than 20% a year, you should probably own the stock. If the stock is going to out-perform the cost of capital.

04:01 If you came to me and you asked for a loan, and you were going to erect a hospital. And I lived in the city. And I had kids. And we needed a hospital. And I was a wealthy person. I would give you the loan, I would buy the bond, so that you could build a hospital so that my family doesn’t die if they need the hospital. So, sometimes, creditors would issue credit because they have a passionate belief in the project. And equity investors would invest because they have a passionate belief. That’s investment, and that’s true crediting. I mean credit and equity investments. And the same is true of real estate, right? I might buy real estate to live in, I love it. Or buy a commercial office building to put my company in. Or a factory. On the other hand, when I am buying the index of 187 companies I never heard of that yields me 2% or 3%, I’m just looking for a store of value.

05:02 So that’s a long-winded answer to the question, which is, is bitcoin worth more than the value of gold? And the answer is yea, in theory, all monetary energy is simply looking for a store of value safe haven index, should presumably drain out of real estate, cash, stocks, and bonds into the bitcoin network, and as that happens, the price discovery will return to real estate and bonds. A real bond should not pay you zero percent interest. Right? A real bond should not charge you money to own it. That’s offensive.

05:46 So the bond values will fall, the equity values will fall. The real estate values will fall. The yields, the dividend yields, the rent yields, the bond coupon yields. They will go up until a rational actor would choose to own those as an investment, or, a person that’s a passionate investor would own them because they’re trophy assets that they simply wish to own to say they own them, for their own personal purposes. And the rest of the monetary energy really ought to be in the bitcoin network because its a pure index of the economy, without counter-party risk, without execution risk, without credit risk, without debasement and political risk, without tax risk, and political risk.

06:47 That’s why that makes sense. And that means that means that the top is more than \$100T. Its somewhere \$100T and \$300T in today’s money. And of course if we look out 5 or 10 years, there may be \$700T in today’s money then. So if half of the monetary energy sits in a store of value index, then it could be \$300T or \$400T.

Transcription follows:

00:00 You know, my recollection is as of now, looking back from the current day for 10 years, I see some numbers showing about 110% to 120% annual appreciation a year. And that’s ten times better than the S&P, so I think that’s the best performing asset class. Buy, you know, depending on what dates, if you pick a different 10-year date you might get a different number. It all comes down to what date you choose. What I think, of course, is, bitcoin will continue to appreciate more aggressively than other asset classes because its the technically superior property, its the least inflationary, its engineered to do this. So, I expect it to outperform other comparable assets. It’ll be much better than bonds, much better than gold, much better than a market basket of equities, it’ll be much better than all the currency derivatives, because all the currency derivatives are based upon the net present value of the cash flows, or the discounted value of the cash flows, and if the discount rate increases, the value of the cash flows falls.

01:21 So, I think this is just a continual thing. Will it go up 110% for the next 10 years? At some point, presumably, its growth rate slows down as the law of large numbers kicks in. And it goes from growing 100% a year, to 50% a year, to 40% a year, to 30% a year, to 20% a year, to 10% a year. But I do think it’ll keep appreciating over a long enough timeframe. And I think it’ll appreciate faster than any other choice that I can come up with, right. So I take a long perspective. And in terms of where it could go, I mean I look at the value of gold, you know, about \$10T of gold, I don’t see any reason why it doesn’t flip that. And I look at \$100T in bonds and I look at the size of the global equity market, and I think, 10%, 20%, 30% of that or more just wants to be in a store of value as a monetary index or just a property.

02:22 So I think a portion of bonds, a portion of real estate, most of monetary gold, a decent portion of gold, a decent portion of ETFs. People putting money into an ETF, like an S&P index, they’re kind of just trying to save their money. If they really wanted to bet on Apple they’d buy Apple stock. If they wanted to bet only on big tech they’d buy big tech FAANG or they’d buy NASDAQ. When they’re buying the S&P500, they’re just buying a diversified portfolio of equity because they don’t want to keep their money in a savings account yielding 0% interest, and they know that bonds, you’re taking a risk of losing all your money but you’re only getting paid 1% or 2% or 3% interest or something.

03:05 So, as bitcoin grows I think it attracts that capital. So why shouldn’t it go to \$10T, then \$20T, then \$40T, then \$80T? And, so, do I see a path to a million dollars a coin? Sure I do, right? When it gets to a million dollars a coin, if you call me and ask me what are you gonna do? I’m gonna wait for it to go to two million a coin, right? When it gets to two million a coin, if you ask me, what am I gonna do? I’m gonna say, I think I’ll just hang out here, because its still digital property, and if it got to that point, it must be wired into a hundred thousand applications and billions of peoples' lives. So, I think its just a patient waiting game.

Transcription follows:

00:00 Interviewer: There was a lot of talk prior to these last 18 months or so that bitcoin, it was an inflation hedge. It doesn’t look like its turned out to be that way.

00:11 Saylor: Its an inflation hedge over 5 years or over 10 years. Its up 100% a year on average for a decade, its up 45% on average every year for five years, its outperformed the NASDAQ, the S&P, gold, everything.

00:27 Interviewer: Is it appropriate to set those sorts of metrics, when this thing has only existed since around 2009. That’s a very short sample size.

00:36 Saylor: You could debate the 10-year number, but 4 or 5 years is a reasonable timeframe for even this asset. I think the more important point is, in the last 12 months, bonds are a loser, precious metals are a loser, every equity is a loser, there really is no winner over 12 months. And the thing that’s causing the gyrations in the financial asset space is the 1-year treasury bond went from 2.80% to 0.70% over 18 months from November, 2018 to March, 2020. The Fed let that 1-year number sit at 0.12%, float down to 0.07%, until 12 months ago. And they cranked the 1-year from 0.07% to 4.07% in the last 12 months. That’s put every financial asset on a roller coaster.

01:29 Saylor: If you’re a trader, I have no trading advice for you. I’m not a trader. If you’re interested in bitcoin, you take the money you want to hold for the next decade and you divide that between a property portfolio. You’re either buying a block in Manhattan, or you’re buying scarce art for a decade, or you’re buying a bitcoin for the next decade. Its a long-term property strategy, its not a short-term trading strategy. I have no advice with regard to the next 12 months. I can’t tell what’s going to happen at 2:05 today, to tell you the truth.