Michael Saylor warns that the US dollar is on track to lose 99.9% of its value

The US dollar has consistently maintained its role as the world’s leading reserve currency and is valued by investors as a safe haven due to America’s robust economic foundation and political stability. However, MicroStrategy Chairman and Co-Founder Michael Saylor is extremely skeptical of the greenback.

In an episode of Patrick Bet-David’s PBD podcast, Saylor compared the U.S. dollar to the Argentine peso.

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“The only difference between the U.S. dollar and the (Argentine) peso is that with the peso it takes 20 years to lose your family wealth, while with the dollar it takes about 90 years,” Saylor explained.

He underlined this point with an example from his own home.

“My house in Miami Beach was worth $100,000 in 1930. A few years ago it was valued at $46 million,” he said. “Do that. It’s on track to be worth $100 million, which means that in 100 years the U.S. dollar will have lost 99.9 percent of its value. Warren Buffett knows that. Charlie Munger knows that.”

MicroStrategy (MSTR), a publicly traded analytics and business intelligence company, began hoarding bitcoins in 2020 and owned 226,331 bitcoins as of June 20. That’s just over 1% of all bitcoins that will ever exist.

Money in the bank

Inflation can cause a currency to lose value, although it is worth noting that the US is in a much better position than Argentina in this regard.

In May 2024, annual inflation in Argentina was a whopping 276.4%. In the US, the consumer price index recorded an annual increase of 3.3%.

Given the diminishing impact of inflation on purchasing power, Saylor questions the wisdom of keeping dollars in the bank.

“The bottom line is that your money in the bank is not money. So, the answer is you shouldn’t have money in the bank,” he said. “In a good year, you basically lose 7% of your total wealth when it comes to the dollar. In a bad year, you lose 15% of your wealth when it comes to the dollar.”

Over long periods of time, inflation can significantly reduce Americans’ purchasing power.

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To put this into perspective, according to the Federal Reserve Bank of Minneapolis’ inflation calculator, $1 in 2023 will have the same purchasing power as about $0.05 in 1930. This means that the dollar has depreciated by 95% since then.

Read more: Car insurance premiums have risen to a staggering $2,150/year in the US – but you can be smarter. Here’s how you can save up to $820 per year in just a few minutes (100% free)

“Strongest money”

Although the US dollar is known worldwide for its strength, Saylor believes there is a better alternative.

“The strongest money in the world is Bitcoin because the number of Bitcoins is limited to 21 million,” he said.

Saylor was referring to Bitcoin’s supply limit, which is set at 21 million coins. This is in contrast to fiat currencies, which can be issued in unlimited quantities by central banks. Bitcoin’s fixed supply limits its vulnerability to inflation.

“It’s global money. You could bring a billion dollars worth of bitcoins across the border and transfer them to a counterparty, and no government can stop it, and no one can create inflation with it,” Saylor added.

As the world’s largest cryptocurrency, Bitcoin has been volatile of late – yet its growth remains remarkable. Its price is up 37% in 2024 and 94% in the last 12 months, measured in US dollars.

It is important to note that Saylor mentioned Buffett during the conversation, but the Oracle of Omaha does not share his enthusiasm for Bitcoin. Buffett stated at Berkshire Hathaway’s annual shareholder meeting in 2022: “If you told me you owned all the Bitcoins in the world and you offered them to me for $25, I would not take it, because what would I do with them? I would have to sell them back to you one way or another.”

Buffett also expressed his great confidence in the dollar’s global status. In 2015, he noted, “I believe that in 50 years the dollar will be the reserve currency of the world, and I think the probability of that is very high.”

Finally, Saylor’s experience with his Miami Beach home underscores another investment insight: real estate can serve as an effective hedge against inflation. While a multimillion-dollar mansion like Saylor’s may be out of reach for many, real estate investing has become more accessible through real estate investment trusts (REITs) and crowdfunding platforms.

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This article is for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.