Last week, a clip from a January interview with Michael Saylor, the chair of Strategy, surfaced on Cointelegraph, leading to a flurry of speculation and intrigue. The video’s caption suggested that Saylor hinted he would burn his BTC keys upon his death, effectively taking his coins out of circulation permanently. The notion, while causing a stir, requires a closer examination.
The clip in question was reposted by numerous media outlets, some suggesting outright that Saylor plans to take his Bitcoin stash to the grave. However, a more careful analysis of his words reveals a somewhat different narrative.
In the video, Saylor discusses the idea of a significant Bitcoin holder choosing to burn their keys as a “pro rata contribution” to all other Bitcoin holders worldwide. The premise behind this is straightforward – the deflationary nature of Bitcoin means that if a substantial amount of BTC is permanently removed from circulation, the remaining coins’ value increases.
This line of thinking aligns with Donald Trump’s advice to strategically accumulate and hold Bitcoin without selling. Several Bitcoin reserve proposals have stipulated a no-sale clause for set periods to maintain market stability and consistent demand.
However, Saylor’s statements should not be misconstrued as a personal commitment to this course of action. He merely shares the idea, without suggesting that he himself plans to lock his bitcoins away forever.
In the interview, Saylor aligns himself with Satoshi Nakamoto’s vision, often emphasizing the scarcity of Bitcoin as a key driver of its value. He argues that this scarcity, coupled with the inability to increase the supply, makes Bitcoin a strong store of value.
Saylor even goes on to suggest that the American dollar could be de facto-backed by Bitcoin, should the government choose to invest. In his view, this would strengthen the dollar, contrary to popular belief.
However, it is important to remember that while scarcity does drive Bitcoin’s value, demand remains a crucial factor. If someone were to bequeath a large amount of Bitcoin, say 450,000 BTC, the effect would be akin to eliminating the mining output of nearly three years. This sudden reduction in circulation could create an environment conducive to price growth, as buyers compete for the remaining coins.
Yet, Saylor’s vision may not be as simple as it seems. Over three million of the 20 million bitcoins mined to date are considered ‘lost.’ While this makes Bitcoin even scarcer, the fate of these coins remains uncertain.
The 21 million Bitcoin hard cap is not an immutable concept. If enough miners favor the idea, the Bitcoin network could change the total supply of coins. Furthermore, the advent of quantum computing could pose a significant threat by potentially breaking into BTC wallets and recovering ‘lost’ coins.
Therefore, while the idea of burning Bitcoin keys, thereby permanently removing coins from circulation, is indeed interesting, it is not without its complexities and uncertainties. Whether Saylor himself will adopt this strategy remains to be seen. However, the discussion it has sparked serves as a clear indication of the dynamic and evolving nature of the cryptocurrency world.
