The US dollar has long held the prestigious position of being the world’s primary reserve currency, admired for its stability and backed by America’s robust economic and political framework. Nevertheless, Michael Saylor, chairman and co-founder of MicroStrategy, holds a starkly different view regarding the greenback’s future.
In a recent episode of the PBD Podcast hosted by Patrick Bet-David, Saylor compared the US dollar to the Argentine peso, expressing his deep concerns. He stated, “The only difference [between] the U.S. dollar and the [Argentine] peso is, whereas it takes 20 years to lose your family’s fortune in the peso, it takes about 90 years to lose your family’s fortune in the dollar.”
To illustrate his point, Saylor shared a personal anecdote about his property. “My house in Miami Beach was $100,000 in 1930. It was appraised at $46 million a few years ago,” he explained. “Do the calculation. It’s on a path to be worth $100 million, which means that the U.S. dollar will have lost 99.9% of its value over 100 years. Warren Buffett knows this. Charlie Munger knows this.”
MicroStrategy, a publicly-traded analytics and business intelligence company, took a significant step in 2020 by investing heavily in bitcoin. As of June 20, the company owns 226,331 bitcoins, which represents slightly more than 1% of all bitcoin that will ever exist.
The Impact of Inflation
Inflation is a critical factor that can erode a currency’s value over time. Although the U.S. is not experiencing the hyperinflation seen in Argentina, where the yearly inflation rate reached 276.4% in May 2024, it still faces inflationary pressures. In the same period, the U.S. consumer price index reported an annual increase of 3.3%.
Saylor argues that the persistent erosion of purchasing power makes it unwise to keep money in the bank. “Basically, the bottom line there is, your money in the bank isn’t money. Okay, so the answer is, you shouldn’t have any money in a bank,” he asserted. “You’re basically losing 7% of all your wealth every year in a good year if it’s the dollar; you’re losing 15% of your wealth in a not good year if it’s the dollar.”
Over long periods, inflation can significantly diminish Americans’ purchasing power. According to the inflation calculator from the Federal Reserve Bank of Minneapolis, $1 in 2023 has the same buying power as about $0.05 in 1930, indicating that the dollar has depreciated by 95% over the past 93 years.
Bitcoin: The Strongest Money?
While the US dollar is widely recognized for its strength, Saylor believes bitcoin offers a superior alternative. “The strongest money in the world is bitcoin because bitcoin is absolutely capped at 21 million,” he said.
This cap on bitcoin’s supply, which is set at 21 million coins, contrasts sharply with fiat currencies, which central banks can print in unlimited quantities. This fixed supply makes bitcoin less susceptible to inflation.
“It is global money. You could take a billion dollars of bitcoin across the border, you can transfer it to a counterparty, and no government can interdict that, and nobody can inflate that,” Saylor added.
Bitcoin, the world’s largest cryptocurrency, has experienced significant volatility. Despite this, its growth trajectory remains impressive, with its price surging 37% in 2024 and 94% over the last 12 months when measured in US dollars.
Divergent Views on Bitcoin
It is crucial to note that Warren Buffett, whom Saylor referenced, does not share his enthusiasm for bitcoin. At the 2022 Berkshire Hathaway annual shareholder meeting, Buffett famously remarked, “If you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another.”
Buffett has consistently expressed strong confidence in the US dollar’s global status. In 2015, he stated, “I think the dollar will be the world’s reserve currency 50 years from now, and I think the probabilities of that are very high.”
Real Estate as an Inflation Hedge
Saylor’s experience with his Miami Beach property underscores another important investment strategy: real estate can be an effective hedge against inflation. While a multi-million dollar mansion like Saylor’s may be beyond the reach of many, real estate investment has become more accessible through real estate investment trusts (REITs) and crowdfunding platforms.
In conclusion, Michael Saylor’s skepticism about the U.S. dollar’s future value highlights the broader debate over inflation and currency devaluation. His advocacy for bitcoin as the “strongest money” contrasts sharply with traditional views held by figures like Warren Buffett, emphasizing the diverse perspectives in today’s financial landscape.
