In a recent episode of the Galaxy Brains podcast, Michael Saylor argued that bitcoin is not a currency and that it is best thought of as capital and only capital.
He also shared that Circle’s Tether (USDT) and USD Coin (USDC) are the true digital currencies and revealed his “evil genius strategy” (his words) to convince the world to adopt US dollar stablecoins instead of the bitcoin.
In this take, I’ll quote some of Saylor’s words from the podcast before explaining why many of the points he makes are off base.
Capital, not currency
“It’s not a currency, it’s capital,” Saylor said midway through the episode.
“You just have to face it: it’s not a 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” appeared.
It’s not mentioned once.
However, in both the title and the abstract of the text, bitcoin is referred to as “electronic cash”. While cash can of course also be capital, it is not just capital. To think of bitcoin only as capital is to deny some of its most essential properties, such as the ability to use it to transact with anyone anywhere in the world without permission.
To deny bitcoin as a currency is to deny much of its value proposition. Bitcoin’s roles as a store of value (SoV) and medium of exchange (MoE) are inextricably linked. To learn more, I would recommend you (and Michael Saylor) read Breez CEO Roy Sheinfeld’s piece “Bitcoin’s False Dichotomy Between SoV and MoE.”
As the episode progressed Saylor continued to (poorly) make the case for why bitcoin is capital and not currency.
“There are a lot of maxis that say ‘No, we want it to be a currency.’ We want to be able to pay for coffee with our bitcoins. 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.’”
In reality this is not the case at all.
Sure, bitcoin is scarce, much like gold, Manhattan real estate, sports teams, or famous paintings, but it has a number of other properties that make it very different from any other asset.
To illustrate one dimension of this point, I will quote my colleague Alex Bergeron:
I urge 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 a minute – Fed Chair Jerome Powell’s stance on bitcoin in an attempt to drive home his point that bitcoin is capital, not currency.
“The reason bitcoin went above $100,000 is because Jerome Powell on stage told the world, bitcoin doesn’t compete with the dollar, it competes with gold,” he said.
Strangely, Saylor said this without acknowledging that the man who said this is the head of the institution that Bitcoin is theoretically supposed to replace.
USDT, not BTC
In the interview, Saylor also emphasized the point that the true digital currencies are US dollar stablecoins.
“The cryptocurrency, the digital currency, is Tether (USDT) and Circle (USDC),” he said. “It’s a US dollar stablecoin – it’s the digital currency.”
This is when I started feeling nauseous.
For those who still don’t know, Bitcoin was born in the wake of the Great Financial Crisis of 2008, when the US government, together with the Federal Reserve, decided to print US dollars. en masse (devalue the currency) to bail out failing banks, the burden of which has been placed on both US taxpayers and holders of US dollars around the world.
Bitcoin is a decentralized currency created as an alternative to the US dollar and all other fiat currencies. Trying to convince people that Bitcoin is not this is at best disingenuous, at worst deeply manipulative.
But that’s not even the worst of what Saylor said in the episode.
He then proposed that banks rescued from the 2008 financial crisis issue their own stablecoins, which would help support the U.S. debt market.
“They should just create a normal regime for issuing digital currency backed by the US Treasury,” Saylor said.
“The United States should have a regulatory framework for Tether to move to New York City. That’s what you want, right? And then we should have a situation 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 they control, essentially the equivalent of CBDCs.
When I think of Goldman Sachs, the first thing that comes to mind is award-winning writer Matt Taibbi’s description of the institution in his book New York Times best seller Griftopia.
“The first thing you need to know about Goldman Sachs is that it’s everywhere,” Taibbi begins in the book. “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly sticking its blood funnel into everything that smells of money.”
Goldman Sachs, just like the US Federal Reserve, is an institution that sucks the life force out of humanity. Bitcoin was designed to disempower such institutions, not strengthen them.
Towards the end of the episode, Saylor presented his master plan for bitcoin and US dollar stablecoins.
Here it is:
“Everyone outside the United States would give their left arm to be capitalized on US stocks. So, my strategy would be – and I really think it’s an evil genius strategy; it’s so good that our enemies hate us, but our allies would complain too. And the United States would gain $100 trillion in the blink of an eye.
Here’s the strategy: Dump the 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, whether it’s sitting in Siberian real estate, in Chinese natural gas, or in any other currency derivative used as a long-term store of value: Europeans, Africans, South Americans, Asians, all dumping their crappy properties and assets of poor capital and buy bitcoin. The price of bitcoin goes to the moon.
The United States is the big beneficiary. US companies are the big beneficiaries. And as you do that, you normalize and support digital currency, and you simply define digital currency as the US dollar backed by US dollar equivalents in a regulated and audited US custodian. What happens next?
$150 billion in stablecoins is $1 trillion, $2 trillion, $4 trillion, $8 trillion, probably somewhere between $8 and $16 trillion, and creates $10 to $20 trillion of demand for sovereign debt American.
While you are taking away some of the demand because bitcoin’s fixed capital grows, you are adding demand back to support the stablecoin. [The digital U.S. dollar then] replaces the CNY, the Rubble. It replaces every African currency. It replaces every South American currency. Replaces the euro.
If you truly believe in the US world reserve currency and US values, every single currency in the world would merge into the US dollar if it were freely available.”
At this point, I stopped listening to the episode and projectile vomited all over the New York subway car I was sitting in.
I didn’t enter the Bitcoin space to help the United States run a scheme where they acquire a large percentage of Bitcoin while hooking the world to their junk currency, and it deeply saddens me that someone so many in the Bitcoin space are watching would come up with such a devious plan .
Bitcoin is money
Bitcoin is money. It is a type of money that cannot be censored or debased and which has grown spectacularly in value over the past decade, making it one of, if not the most, powerful tools ever created for individuals.
To consider it anything less, or to try to convince people that a new iteration of the dominant version of money is better than the current one, is to be profoundly misinformed.
While bitcoin is capital, it is not everything, and please don’t let Michael Saylor or anyone else convince you otherwise.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.