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Michael Saylor, chairman of the board of directors and chief executive office of MicroStrategy Inc, speaks during the Bitcoin Conference 2023, in Miami Beach, Fla., on May 19, 2023.MARCO BELLO/Reuters

Michael Saylor has been banging the drum for years: Bitcoin isn’t a currency. Instead, he says, the crypto asset is the “apex property of the human race.”

Mr. Saylor, the former chief executive officer of cryptocurrency holding company MicroStrategy, tried to make this case in 2021, the last time bitcoin went on a tear, but no one really focused on the argument then. At that point in the COVID-19 pandemic rally, the main narrative from enthusiasts was that bitcoin would take over as the world’s reserve currency.

But then 2022 unfolded and the price of bitcoin plummeted 74 per cent from its peak. That summer, Mr. Saylor gave up his CEO title at MicroStrategy – but remained executive chair – after the company reported a $1-billion quarterly loss.

Amid the rout, the United States laid federal charges against at least seven different founders and CEOs of crypto companies, including the head of Binance, which was the world’s largest crypto exchange in 2021, when it processed US$9.5-trillion worth of cryptocurrency trades.

Now that bitcoin’s ripping again, it’s as if none of it ever happened. The digital asset’s price roared to a record high of US$73,000 this week, and Mr. Saylor is back in the limelight, conducting media interviews that resurrect his old argument.

“Bitcoin is the highest form of properties, the apex property in the world. And it’s the best investment asset. So the endgame is to acquire more bitcoin,” he said in a video interview with Yahoo Finance. “Whoever gets the most bitcoin wins. There is no other endgame.”

What goes unsaid is that bitcoin, the original cryptocurrency, has never been used as a currency in any meaningful way, and possibly never will be, which may be why Mr. Saylor is getting airtime on business television networks such as CNBC again. His characterization is a valid explanation for the recent investor interest, even if it is based on an improbable premise.

“Bitcoin doesn’t have to be a currency,” he said on CNBC. “Nobody is trying to buy a cup of coffee with a fraction of their building on 5th Avenue.”

Drake, the Canadian rapper, posted a snippet of the interview on Instagram, including the quote above, for his 146 million followers to see.

Another major theory making the rounds: The price of bitcoin is surging because the crypto asset is about to go through another “halving.” Bitcoin is backed by computer code that limits its eventual total supply to 21 million coins, more than 90 per cent of which are already in circulation. Roughly every four years the rewards for mining new coins are reduced, a process known as halving, which slows new supply. (Bitcoin mining involves using powerful computers to process bitcoin transactions, in exchange for a chance at being issued new coins.)

With a halving expected in late April – an exact date can’t be determined because it depends on the pace of new supply until then – the theory is that buyers have been scooping up bitcoin while it’s still relatively easy to get their hands on some. After supply is more constrained, that may be harder to do.

What this argument leaves out, however, is that bitcoin isn’t the only crypto asset whose price is soaring – an indication that the impending halving doesn’t fully explain the rally. The price of ether has jumped 135 per cent over the past six months, and meme coins are back in vogue, too. There are between 15,000 to 20,000 digital coins in existence, and during the pandemic scores of them took off. Like bitcoin, they crashed in 2022, but the price of dogecoin, one of the better known meme coins, is surging again. It has jumped 185 per cent over the past six months.

In all, the value of all digital assets has roared back to US$2.8-trillion, according to the FT Wilshire Digital Asset Index, nearing the US$3.2-trillion peak in November, 2021.

Digital asset manager Grayscale Investments plans spinoff of spot bitcoin ETF

The recent rally does have support from traditional players in the financial system. The U.S. Securities and Exchange Commission recently approved 11 bitcoin exchange-traded funds, and net inflows to crypto asset funds this year are now worth roughly US$10-billion, according to CoinShares.

In total, more than that has been invested in the new ETFs, but some of this money has simply been transferred from existing bitcoin funds, such as one run by Canada’s Purpose Investments, and another dominant fund run by Grayscale Investments.

One theory for the switch is that the older funds often charge fees worth 1 per cent to 1.5 per cent annually, whereas BlackRock’s new bitcoin ETF currently charges 0.19 per cent annually. Grayscale has seen net outflows worth US$10.5-billion this year, according to CoinShares, while Purpose’s net outflows total US$337-million.

In an e-mail to The Globe and Mail, Purpose CEO Som Seif said his company’s outflows are not related to fees, and instead stem from U.S. customers migrating back to their home country, now that bitcoin ETFs are available there.

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