In an interview with Bernstein analysts, Michael Saylor, the founder and executive chairman of MicroStrategy (MSTR), unveiled his ambitious plan to transform the company into the world’s leading bitcoin bank.
This bold strategy has positioned the AI analytics software company as a trailblazer in the cryptocurrency space, with the Tysons Corner, Virginia-based firm aggressively acquiring bitcoin (BTC) since 2020 through a combination of debt and equity financing.
MicroStrategy’s bitcoin holdings have reached an astounding 252,220 BTC, valued at over $15 billion, against a total investment of approximately $9.9 billion. This substantial position represents 1.2% of bitcoin’s total supply, cementing MicroStrategy’s status as the largest corporate bitcoin holder globally.
Saylor’s unwavering belief in bitcoin as the premier asset of the 21st century underpins this audacious strategy. He views the cryptocurrency as a revolutionary form of digital capital, offering unparalleled protection against inflation and superior long-term value storage.
Saylor anticipates that bitcoin’s inherent volatility will continue to attract high-return-seeking investors, eventually becoming an essential component of both institutional and retail portfolios.
The endgame for MicroStrategy, according to Saylor, is to evolve into a bitcoin bank specializing in creating bitcoin capital market instruments across various financial products. This includes equity, convertibles, fixed income, and preferred shares. Saylor envisions a future where MicroStrategy could manage $100-$150 billion worth of bitcoin through diverse financial instruments, potentially growing into a $300-400 billion company with significant influence in options and equity markets.
Saylor’s long-term outlook for bitcoin is exceptionally bullish, predicting a rise from its current 0.1% share of global financial capital to 7% by 2045, implying a staggering bitcoin price of $13 million per coin. This forecast forms the basis of MicroStrategy’s strategy to continually raise funds through U.S. capital markets and invest in bitcoin, which Saylor expects to grow by 29% annually in his base case scenario.
Interestingly, Saylor’s vision for a bitcoin bank differs from traditional banking models. Rather than lending out bitcoin, MicroStrategy plans to borrow fiat currency at low interest rates and invest it in bitcoin, which Saylor believes offers superior returns with lower risk. This approach, he argues, is infinitely scalable and more intelligent than traditional lending practices.
MicroStrategy’s unique position in bridging USD and bitcoin markets through investable instruments has set it apart from potential competitors. The company offers investors exposure to bitcoin volatility through options and convertibles with downside protection, while benefiting from low-cost debt and attractive conversion premiums. This model is challenging for smaller companies to replicate and for larger firms to offer due to their diverse business focuses.
As MicroStrategy continues to lead the charge in corporate bitcoin adoption, Saylor expects more companies in the crypto ecosystem, including miners and exchanges, to follow suit. He believes that adopting bitcoin – last trading above the $63,000 level – as a treasury reserve asset is crucial for preserving and creating shareholder value in the evolving digital economy.
Reference: The Block
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