In a recent interview on CNBC’s “Squawk Box,” Michael Saylor, the executive chairman of MicroStrategy, shared details about the company’s bold Bitcoin investment strategy. He said how BTC strategy has reshaped their business.
Since the company’s first purchase investment in August 2020, MicroStrategy has bought approximately $8.3 billion Bitcoin from this, leading to its growth.
Although the cryptocurrency market is very volatile, Saylor is convinced that Bitcoin is the best long-term investment. He believes that the crypto has vastly outperformed any Traditional asset
MicroStrategy’s emphasis on Bitcoin has led to an average annual return of 44% compared to the S&P 500’s 12% per annum in the same time frame. Saylor also said that the investment made by the company has been far better than that of other companies including giants like Nvidia which saw its investment soar by 821%.
MicroStrategy has managed to yield 825% return because the company’s primary strategy is to invest heavily in Bitcoin.“Since we levered it, we’re up 825%,” Saylor remarked, pointing to the effectiveness of their Bitcoin strategy.
MicroStrategy’s Diversification Through Bitcoin-Backed Bonds
However, the company has also expanded its business by launching Bitcoin-backed convertible bonds as part of its financial products. These products enable investors to invest in Bitcoin and stand a chance to benefit from it. At the same time, this lets customers not be fully exposed to the risks that come with its volatility.
Saylor said that the bonds are divided into categories depending on the risk-reward profile that investors are interested in pursuing. It includes products ranging from the high-risk and high returns type to the low-risk and low-returns type.
MicroStrategy’s decision to launch Bitcoin-tied financial products has brought a major shift in the investment industry. The company has effectively created the BTC-backed bond market. It has enabled the firm to obtain capital, as well as offer the investors a profitable instrument.
These bonds entail high yields with the advantage of protecting the investor from the crypto market volatility. Such a move by the company strengthens its position as the leading company in Bitcoin financial product innovations.
Impact of Bitcoin ETFs and Market Dynamics
Saylor also spoke about the effects of the newly launched U.S.-listed spot Bitcoin ETFs in the market. Although these ETFs have led to increased demand for Bitcoin, he also pointed out that they could lead to additional volatility.
Compared to MicroStrategy’s Bitcoin-backed bonds which generate additional yield through the strategic backend performance, ETFs give direct exposure to Bitcoin with low costs but do not offer premium returns which MicroStrategy gets through its products.
According to Saylor, due to its high liquidity, Bitcoin is more attractive than other assets such as real estate. “Bitcoin is smart, fast, strong money,” he said, explaining that it can be easily transferred or exchanged during the volatile periods of the market. He compared Bitcoin with real estate which cannot be easily liquidated or leveraged during times of crisis. It means that Bitcoin is a much more versatile asset during the period of uncertainty.
Bitcoin as Digital Gold and Long-Term Investment
In the course of the interview, Saylor reiterated that Bitcoin should be considered as “digital gold.” He said BTC has a long-term store of value. Nevertheless, Bitcoin’s liquidity and fungibility surpass many conventional assets’ short-term price fluctuations making it a better investment option. He pointed out that although Bitcoin can’t be treated like gold 100% of the time. It remains strategically valuable in the long run for investors.
The firm is not backing down from its Bitcoin strategy. Saylor said that the company’s future strategy will be defined by its Bitcoin strategy. Although the company’s core business has been in software, the current focus has been on building and growing its bitcoin assets and financial services.
MicroStrategy’s bold investment in Bitcoin, led by Saylor, has positioned the company as a leader in the digital asset space. As a result of its diversified and profitable financial products and services, the company has remained one of the pioneers of integrating Bitcoin into corporate investment portfolios.
