As a seasoned analyst with over two decades of experience in the financial sector, I find myself intrigued and impressed by Michael Saylor’s ambitious vision for MicroStrategy. His strategic approach to Bitcoin is not just bold, but also innovative, leveraging debt and equity to maximize returns in an unprecedented manner.
Based on a report by The Block, during an interview with analysts at Bernstein, Michael Saylor, Co-Founder and Executive Chairman of MicroStrategy, expressed the company’s ambitious goal to become the world’s foremost bitcoin bank. Since 2020, MicroStrategy has actively purchased Bitcoin, utilizing debt and equity to optimize profits. As of September 2024, they own over 252,220 BTC, worth more than $15 billion, making them the largest corporate owner of Bitcoin globally. With a total investment cost of approximately $9.9 billion and $4 billion in debt, MicroStrategy controls around 1.2% of the total supply of Bitcoin.
MicroStrategy recently purchased approximately 7,420 Bitcoins for around $458.2 million, or roughly $61,750 each. This move has resulted in a quarter-to-date (QTD) Bitcoin Yield of 5.1% and a year-to-date (YTD) yield of 17.8%. As of September 19, 2024, we hold approximately 252,220 Bitcoins that were acquired for about $9.9 billion, or an average of $39,266 per Bitcoin. The symbol for MicroStrategy is $MSTR.
— Michael Saylor⚡️ (@saylor) September 20, 2024
In simpler terms, Saylor stated that Bitcoin is a groundbreaking type of digital wealth, providing protection against inflation and a means for long-term value preservation. He referred to Bitcoin as the century’s top-performing asset and highlighted its volatility, which he thinks appeals to investors seeking significant returns. As for MicroStrategy, Saylor’s goal is to establish a Bitcoin-centric financial powerhouse, or “Bitcoin bank,” that offers various investment options in Bitcoin through equity, convertibles, fixed income, and preferred shares.
According to Saylor, if Bitcoin continues to gain significance, MicroStrategy might one day possess billions of dollars worth of Bitcoin, potentially transforming into a company valued at over a trillion dollars. He envisions that the value of a single Bitcoin could hit $13 million by 2045, accounting for 7% of global financial assets. The company’s approach involves securing funds through various means such as debt, equity, and other investment tools in the U.S. market. Saylor is confident that MicroStrategy’s debt strategy has unlimited potential for growth.
Instead of acting like conventional banks by loaning out its Bitcoin holdings, MicroStrategy chooses to “invest in Bitcoin lending” by purchasing the cryptocurrency itself. Saylor points out that this strategy offers low-cost debt, which can be utilized to buy Bitcoin and potentially yield returns as high as 50% per year. He contends that providing loans to individuals, businesses, and governments carries more risk compared to investing in Bitcoin.
Saylor aims to inspire other businesses within the cryptocurrency sector, including mining operations and exchange platforms, to hold Bitcoin as a reserve asset in their treasury. He points to Marathon and Semler Scientific as companies that have already adopted this strategy. Saylor believes that more organizations will adopt this approach as the worth of Bitcoin increases and its significance within the global financial landscape expands.
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2024-10-12 17:44