On a recent episode of the Galaxy Brains podcast, Michael Saylor argued that bitcoin is not a currency and suggested it should be regarded purely as capital.
He also indicated that Tether (USDT) and Circle’s USD Coin (USDC) are the genuine digital currencies and disclosed his so-called “evil genius strategy” (his own terminology) aimed at persuading society to adopt U.S. dollar stablecoins instead of bitcoin.
In this Take, I’ll reference some of Saylor’s comments from the podcast before explaining why many of his arguments are misguided.
Capital, Not Currency
“It’s not a currency, it’s capital,” stated Saylor around the midpoint of the episode.
“You just have to come to terms with it — it is not digital currency. It is not cryptocurrency. It is digital capital. It is crypto capital,” he noted.
I looked through the Bitcoin Whitepaper to determine how often the term “capital” was mentioned.
It does not appear even once.
Yet, in both the title and abstract of the document, bitcoin is described as “electronic cash.” While cash can certainly also function as capital, it is not limited to that. To view bitcoin solely as capital overlooks several of its most fundamental attributes — such as the capacity to transact freely with anyone, anywhere around the globe.
Rejecting bitcoin as a currency negates a significant aspect of its value proposition. Bitcoin’s functionalities as a Store of Value (SoV) and a Medium of Exchange (MoE) are intrinsically linked. For additional insight on this, I would recommend you (and Michael Saylor) read Breez CEO Roy Sheinfeld’s article “Bitcoin’s False Dichotomy between SoV and MoE”.
As the podcast continued, Saylor persisted in (poorly) arguing why bitcoin qualifies as capital rather than currency.
“There are many maxis who go, ‘No, we want it to be a currency. We want to be able to buy coffee with our bitcoin. Pay me in bitcoin,’” he remarked. “It’s like saying, ‘Pay me in gold. Pay me with a building. Pay me with a share of your professional sports franchise. Pay me with a Picasso.’”
In reality, it’s not analogous to that at all.
Granted, bitcoin possesses scarcity, somewhat akin to gold, Manhattan real estate, sports franchises, or renowned artworks, but it has several other characteristics that distinguish it significantly from any of these other assets.
To illustrate a facet of that argument, I’ll quote my colleague Alex Bergeron:
I encourage anyone who believes Bitcoin is similar to gold to launch a custodial gold wallet.
I’ll wait.
— Alex B (@bergealex4) December 22, 2024
Then Saylor referenced — you guessed it — Fed Chair Jerome Powell’s opinion on bitcoin to reinforce his stance that bitcoin is capital, not currency.
“The reason bitcoin surged past $100,000 is that Jerome Powell onstage told the world, bitcoin does not compete with the dollar, it competes with gold,” he asserted.
Interestingly, Saylor made this comment without recognizing that the individual who made this claim is the head of the entity that Bitcoin should, in theory, replace.
USDT, Not BTC
During the interview, Saylor emphasized that the true digital currencies are U.S. dollar stablecoins.
“The cryptocurrency, the digital currency, is Tether (USDT) and Circle (USDC),” he stated. “It’s a stablecoin U.S. dollar — that’s the digital currency.”
This was the moment I began to feel unwell.
For those who may not be aware, Bitcoin emerged in the aftermath of the Great Financial Crisis of 2008, when the U.S. government in collaboration with the U.S. Federal Reserve chose to print U.S. dollars en masse (debase the currency) to rescue failing banks, leaving the financial burden on both U.S. taxpayers and worldwide U.S. dollar holders.
Bitcoin is a decentralized form of currency that was invented as an alternative to the U.S. dollar and all other fiat currencies. Attempting to persuade individuals that bitcoin is not this is disingenuous at best, and deeply manipulative at worst.
However, this was not the worst of Saylor’s comments in the episode.
He went on to suggest that the banks rescued during the 2008 financial meltdown should issue their own stablecoins, which would bolster the U.S. debt market.
“They should establish a standard procedure to issue digital currency backed by U.S. treasuries,” Saylor commented.
“The U.S. should create a framework so Tether relocates to New York City. That’s your goal, right? And then we should essentially allow a free-for-all where JP Morgan or Goldman Sachs can issue their own stablecoin,” he continued.
No, Michael Saylor, that’s not my intention. In fact, it’s quite the opposite.
I don’t want Tether near New York City (my hometown) and I don’t want JP Morgan and Goldman Sachs to be issuing U.S. dollar stablecoins that they manage, which are essentially akin to CBDCs.
When I think of Goldman Sachs, the first thing that pops into my mind is award-winning author Matt Taibbi’s characterization of the institution from his New York Times bestseller Griftopia.
“The first thing you need to understand about Goldman Sachs is that it’s ubiquitous,” Taibbi began in the book. “The world’s most influential investment bank is a great vampire squid wrapped around the face of humanity, relentlessly inserting its blood funnel into anything that appears to smell like money.”
Goldman Sachs, similar to the U.S. Federal Reserve, is an institution that drains the life essence from society. Bitcoin was designed to strip power away from such organizations, not reinforce them.
As the episode drew to a close, Saylor outlined his grand vision for bitcoin and U.S. dollar stablecoins.
Here it is:
“Everyone outside the U.S. would gladly sacrifice their left arm to invest in U.S. bonds. So, my strategy would be — and I genuinely believe it’s an evil genius plan; it’s so brilliant that our adversaries would despise us, but our allies would also express grievances. And the U.S. would generate $100 trillion in an instant.
Here’s the approach: Abandon gold, demonetize the entire gold system. Acquire bitcoin — 5 million or 6 million bitcoin — and monetize the bitcoin network. All the capital globally, currently sitting in Siberian properties or Chinese natural gas or any other derivative of currency treated as a long-term store of value — Europeans, Africans, South Americans, Asians, they all divest from their inferior assets and purchase bitcoin. The price of bitcoin skyrockets.
The U.S. is the primary beneficiary. U.S. corporations stand to gain immensely. In parallel, you normalize and endorse digital currency, defining it as the U.S. dollar endorsed by legitimate U.S. dollar equivalents in a regulated U.S. custodian subjected to audits. What unfolds next?
$150 billion of stablecoins escalates to $1 trillion, $2 trillion, $4 trillion, $8 trillion, possibly between $8 and $16 trillion, generating $10 to $20 trillion in demand for U.S. sovereign debt.
While you slightly reduce demand due to the growth of bitcoin as a capital asset, you’re reversing the demand for backing the stablecoin. [The digital U.S. dollar then] supplants the CNY, the Ruble. It replaces every African currency. It replaces every South American currency. It overtakes the euro.
If you’re genuinely committed to the U.S. as the world reserve currency and U.S. principles, every single currency around the globe would ultimately merge into the U.S. dollar if freely available.”
At this point, I ceased listening to the episode and uncontrollably vomited all over the New York City subway car I was in.
I did not enter the Bitcoin domain to assist the U.S. in orchestrating a scheme to obtain a substantial portion of bitcoin while ensnaring the world with its worthless currency, and it deeply disappoints me that an individual many in the Bitcoin community admire would devise such a duplicitous plan.
Bitcoin Is Money
Bitcoin is money. It is a form of money that cannot be censored or diminished, having spectacularly appreciated in value over the past decade, establishing it as one of, if not the most, formidable instruments ever devised for individuals.
To regard it as anything lesser, or to attempt persuading others that a new version of an established currency is superior to it, is to be profoundly misinformed.
While bitcoin serves as capital, that is not its only function, and please don’t allow Michael Saylor or anyone else to persuade you otherwise.
This article is a Take. Opinions expressed are solely the author’s and do not necessarily represent those of BTC Inc or Bitcoin Magazine.
