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Gold will 'fail' and be replaced by Bitcoin, bank collapses are a 'political decision' - Michael Saylor

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(Kitco News) - Gold will "fail" as an asset as people realize that Bitcoin offers superior properties to the yellow metal. That is according to billionaire Michael Saylor, Executive Chairman and Co-Founder of MicroStrategy, a publicly traded company which holds 140,000 Bitcoin.

"[Bitcoin] is the digital synthetic successor to gold," Saylor told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "Bitcoin is going to appreciate at a faster rate. Gold is going to fail. Eventually people will sell all their gold and buy Bitcoin."

MicroStrategy started purchasing Bitcoin in August 2020, which Saylor said has paid off, given the appreciation in Bitcoin's price since then.

"Bitcoin is up 140 percent," he observed. "The S&P Index is up maybe 25 percent, the NASDAQ is up in the teens or maybe less, gold is like a plus one percent, silver has been down and lost money, and bonds have lost even more."

A long time HODLER of Bitcoin, Saylor claimed that Bitcoin has succeeded as an inflation hedge and store of value. He first started investing in Bitcoin because of its limited supply cap and decentralized blockchain network, which make it cheaper to self-custody than other assets without counterparty risk.

"[Bitcoin] is faster, smarter, and stronger than gold, with all of the advantages of gold – a bearer instrument with no counterparty risk that's a non-sovereign store of value," said Saylor. "[Gold] is expensive to hold, it's centralizing, people can steal it from you, and gold miners keep debasing it by making more gold."

Saylor spoke with Makori at the Bitcoin 2023 conference in Miami, Florida.

To find out Saylor's inflation outlook and why he thinks Bitcoin is the best inflation hedge, watch the video above.

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"I'm a Bitcoin realist'

Saylor maintained that he is a "Bitcoin realist," and not a purist when it comes to how people choose to hold Bitcoin.

"If Bitcoin is going to be the solution for 8 billion people on the planet, then it's going to be inevitable that… large institutions, churches and corporations and the like, are going to need an infrastructure of custodians and banks," he said. "There are all sorts of groups of people that can't reasonably be expected to self-custody."

He noted that a corporation which owns Bitcoin cannot have the CEO or Board of Directors self-custody the Bitcoin due to due diligence and regulation.

"If Apple is going to have Bitcoin, and Apple is a corporation, they're not going to give it to [Apple CEO] Tim Cook," Saylor remarked.

To find out what Saylor thinks will lead to more Bitcoin adoption, watch the video above.

Bank Failures are Political

March of 2023 saw the failure of the banks Silvergate, Silicon Valley Bank, and Signature. On May 1st, First Republic Bank also collapsed and was bought by JP Morgan. In total, these banks had over $500 billion in total assets.

Saylor said that whether or not more U.S. banks fail is a "political decision."

"It's the politicians that decide whether the banks collapse," he said. "They can choose to have them not collapse by backing them, or they can choose to take into receivership a bank, and then the creditors and the equity-holders are wiped out, and the depositors aren't."

In the case of Silvergate, Silicon Valley Bank, and Signature, the federal government and Federal Reserve bailed out depositors, while allowing the banks to fail.

Saylor is particularly concerned about jurisdictions outside of the U.S.

"Under no circumstances would I have my money in a weak bank, or in a bank in a weak country with a weak currency," he stated. "That's basically playing Russian roulette. In the U.S., I would probably have confidence in my deposits, but if I were an investor or creditor to a smaller bank, I wouldn't have confidence in my securities."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.