- MicroStrategy aims to become the world’s leading Bitcoin bank, holding 252,220 BTC.
- The company invests borrowed funds in Bitcoin, expecting 29% annual returns.
- Saylor’s goal is to grow MicroStrategy into a trillion-dollar bitcoin-driven entity.
Michael Saylor, founder and executive chairman of MicroStrategy, in an interview with analysts at research and brokerage firm Bernstein outlined a clear vision for the future of his company. According to Saylor, MicroStrategy aims to become the world’s leading Bitcoin bank.
Saylor believes that Bitcoin (BTC) is not only the top-performing asset of the 21st century but also the cornerstone of a revolutionary financial system and his ultimate goal is for MicroStrategy to transform into a trillion-dollar company by leveraging the potential of Bitcoin (BTC).
MicroStrategy’s Bitcoin accumulation strategy
MicroStrategy’s recent acquisition of 7,420 BTC demonstrates its aggressive approach toward bitcoin accumulation, using both debt and equity to maximize returns. The company’s total investment in BTC is estimated to have cost around $9.9 billion, alongside a debt burden of $4 billion.
As a result, MicroStrategy now controls about 1.2% of the total Bitcoin supply, reinforcing its prominent position in the market.
Currently, with over 252,220 BTC in its reserves, currently valued at more than $15 billion, MicroStrategy holds the title of the largest corporate Bitcoin holder globally.
Saylor’s long-term thesis is that Bitcoin’s scarcity and volatility make it a superior asset for hedging against inflation and storing value. He foresees Bitcoin eventually reaching millions of dollars per coin, and with continued investment, MicroStrategy could grow into a trillion-dollar entity.
Saylor envisions the firm issuing various financial instruments such as equity, convertible debt, and preferred stock tied to Bitcoin, which would further cement its role in the emerging Bitcoin economy.
Saylor also emphasizes the attractiveness of Bitcoin over traditional lending models. He argues that lending to Bitcoin, by investing in it directly, offers better returns with less risk compared to lending to individuals or corporations. He plans for MicroStrategy to continue borrowing funds to invest in Bitcoin without lending out the Bitcoin itself, minimizing counterparty risk.
In the broader context of corporate bitcoin adoption, MicroStrategy’s model stands out. While other companies in the crypto space, like Marathon and Block, have adopted Bitcoin as part of their treasury strategy, MicroStrategy’s focus and scale make it unique.
Saylor remains confident that MicroStrategy’s business model, which bridges traditional USD capital markets with Bitcoin, will be difficult for others to replicate, positioning the firm as a pioneer in the Bitcoin-driven financial landscape.
A Bitcoin bank that doesn’t lend out funds
Unlike traditional banks that lend out funds, MicroStrategy’s business model revolves around borrowing money at low interest rates and investing those funds in Bitcoin.
By offering slightly higher rates to lenders and expecting Bitcoin’s annual growth to average around 29%, the company is positioned to outperform many conventional investments.
Saylor’s strategy hinges on capital markets arbitrage, where MicroStrategy capitalizes on the difference between USD capital and Bitcoin’s appreciation, allowing them to generate significant returns.
MicroStrategy’s bold ambition to become a trillion-dollar Bitcoin bank reflects Saylor’s unwavering belief in Bitcoin’s potential as the world’s most valuable asset.