TL;DR
- Michael Saylor, co-founder of MicroStrategy, reaffirms the company’s commitment to Bitcoin (BTC) and reveals that it has accumulated $8.3 billion in BTC since August 2020.
- Saylor highlights that the Bitcoin investment has outperformed the S&P 500, with an average annual increase of 44% compared to the index’s 12%, even surpassing Nvidia.
- Despite the focus on Bitcoin, MicroStrategy continues to operate its software business and has introduced convertible bonds backed by BTC, offering additional returns compared to ETFs.
Michael Saylor, co-founder and executive chairman of MicroStrategy, discussed the company’s Bitcoin (BTC) investment strategy. The entrepreneur reaffirmed the firm’s firm commitment to BTC despite market volatility. Since August 2020, the company has accumulated approximately $8.3 billion in Bitcoin.
According to Saylor, MicroStrategy’s Bitcoin investment has provided superior returns compared to traditional stock market investments. He stated that, since the start of the investments, Bitcoin’s value has grown at an average annual rate of 44%, in contrast to the S&P 500’s 12% annual increase over the same period. This performance has positioned the company ahead of all S&P 500 companies, including Nvidia, which had seen an 821% increase.
Surpassing Nvidia’s Success
Although Bitcoin is central to the company’s strategy, Saylor explained that MicroStrategy continues to operate its software business, which he describes as a “cash cow.” However, the company’s main focus has shifted to securitizing Bitcoin through the issuance of Bitcoin-backed convertible bonds. These bonds allow investors to access a range of investment opportunities, catering to both those seeking high-risk options and those preferring less volatile investments.
Competition Between MicroStrategy and Bitcoin ETFs
Regarding the recently introduced Bitcoin spot ETFs, Saylor acknowledged that these funds have increased demand for BTC but warned about their potential for volatility. According to Saylor, spot ETFs offer one-to-one performance with low fees but lack the additional yields that MicroStrategy can generate through its convertible bonds. The company captures a 50% premium on these bonds, benefiting from Bitcoin’s performance.
Saylor also addressed the recent outflows from spot ETFs, attributing them to the fast nature of Bitcoin trading. He noted that BTC’s liquidity allows investors to move quickly in and out of positions, which can lead to short-term volatility, although this feature is advantageous in the long run. He compared this liquidity to physical assets like real estate, arguing that BTC can be traded more quickly and efficiently, especially during times of uncertainty.
