As a company that actively invests in Bitcoin, MicroStrategy has the vision of becoming a Bitcoin bank, and MSTR, which has always performed well, has become one of the important ways for investors to participate in the Bitcoin market.
MicroStrategy’s Bitcoin Banking Vision
“Bitcoin is the most valuable asset in the world,” said Michael Saylor, executive chairman of the board, in an interview with Bernstein analysts. “Our ultimate goal is to become the leading Bitcoin bank or commercial bank, or you can call it a Bitcoin financial company.”
“If we end up with $20 billion in convertible notes, $20 billion in preferred stock, $10 billion in debt, and $50 billion in some kind of debt instrument and structured instrument, then we’d have $100 billion to $150 billion in Bitcoin.”
Saylor firmly believes in Bitcoin’s unlimited growth potential.
“I think it’s infinitely scalable,” Saylor responded. “I have no doubt at all how we can raise $100 billion and then $200 billion. This is a trillion-dollar asset class that will go to $10 trillion and then $100 trillion. The risk is simple — that’s Bitcoin. You either believe Bitcoin is something or you believe it’s nothing.”
MicroStrategy’s Bold Bitcoin Strategy
MicroStrategy firmly sees Bitcoin as the core of its corporate value creation. Its strategy is relatively simple and clear. Unlike other companies (such as Tesla or BlackRock), MicroStrategy's strategy is to use convertible bonds, preferred stocks and other structured debt instruments to continuously buy more Bitcoin. Saylor predicts that the price of Bitcoin will reach $13 million per coin in 2045.
MicroStrategy uses a leveraged Bitcoin hybrid strategy to grow its enterprise analytics business and hold Bitcoin as a long-term reserve. This strategy involves entering the market at low points and buying Bitcoin multiple times to increase its total holdings.
At the same time, MicroStrategy uses Bitcoin as its main asset reserve, and continues to accumulate Bitcoin through cash flow and returns from equity or debt financing. In addition, the company has adopted a balance sheet strategy, purchasing Bitcoin only in the US-based market and storing it in custody guaranteed by US regulators and cold storage.
The Bitcoin plan brings opportunities, and MTSR may become an important way to better participate in the Bitcoin market
As of September 2024, MicroStrategy holds 252,220 bitcoins with a total value of approximately US$15 billion, making it one of the world's largest corporate Bitcoin holders.
As of the latest trading day data (October 11), MSTR performed outstandingly, breaking through $210 per share.
Image source: Internet
And since MicroStrategy implemented the Bitcoin plan in 2020, Microstrategy stock has been performing well, significantly better than other companies. According to data, MSTR has risen 1,620% since August 2020, while Bitcoin has risen 426%, Magnificent 7 has risen 243%, and the S&P 500 has risen 73%.
Image source: Internet
These data seem to indicate that holding MSTR to indirectly participate in the Bitcoin market is a better investment approach than directly holding Bitcoin to participate in the cryptocurrency market.
Because MicroStrategy provides an attractive way for investors who want to indirectly participate in the Bitcoin market. By holding MicroStrategy's shares, investors can indirectly gain benefits from rising Bitcoin prices while sharing the company's performance growth. In addition, the core of MicroStrategy's business remains its steadily growing business intelligence services, which provides investors with a certain degree of risk buffer.
Bitcoin prices fluctuate, but MicroStrategy's Bitcoin holding premium remains healthy, Michael Saylor explained, "Long-term Bitcoin holders view Bitcoin as a top asset that should not be sold." He emphasized that MicroStrategy's ability to achieve positive BTC returns, rather than negative returns for closed-end funds, contributes to the equity premium. Investors value the company's strategy for acquiring Bitcoin and its differentiated investment approach.
