In a recent interview, Michael J. Saylor, Co-Founder, Chairman, and CEO of Nasdaq-listed\u00a0business intelligence company\u00a0MicroStrategy Inc.\u00a0(NASDAQ: MSTR) addressed one of the most common criticisms of Bitcoin.<\/p>\n
On 11 August 2020, MicroStrategy announced via a\u00a0press release\u00a0that it had \u201cpurchased 21,454 bitcoins at an aggregate purchase price of $250 million\u201d to use as a \u201cprimary treasury reserve asset.\u201d<\/p>\n
Saylor said at the time:<\/p>\n
\u201cOur decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program \u2015 risks that should be addressed proactively.<\/em>\u201c<\/p>\n Since then MicroStrategy has continued to accumulate Bitcoin and its CEO has become one of Bitcoin\u2019s most vocal advocates. MicroStrategy\u2019s latest Bitcoin purchase was announced by Saylor on March 12, when he disclosed that his firm has so far bought (and held) roughly 91,326 bitcoins for an aggregate cost of $2.211 billion, i.e. for an average cost per bitcoin of $24,214. <\/p>\n Earlier today, TIME published as an article the transcript of its recent interview with the MicroStrategy CEO. One of the most interesting parts of this interview was when TIME deputy editor Eben Shapiro asked Saylor the following question:<\/p>\n \u201cI\u2019m going to read Nobel Prize winner Robert Shiller\u2019s quote about irrational exuberance. \u2018Irrational exuberance is the psychological basis of a speculative bubble. I define a speculative bubble as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, and, in the process, amplifies stories that might justify the price increase and brings in a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others\u2019 successes and partly through a gambler\u2019s excitement.\u2019 Is Bitcoin not a textbook example of irrational exuberance?<\/em>\u201c<\/p>\n Saylor replied:<\/p>\n \u201cNo, it\u2019s the opposite. It\u2019s a textbook example of a rational action in response to monetary inflation. Can we agree that the money supply is expanding in an unprecedented fashion the past 12 months everywhere in the world? If you\u2019re going to make a rational investment decision today, whether you\u2019re a real estate investor, a stock investor, a bond investor, or just a wage earner or you\u2019re a treasurer, you have to estimate the rate of monetary expansion for the next eight years. We know there\u2019s a commitment to run deficits, and we know this commitment to stimulus.<\/em><\/p>\n