As a seasoned researcher with years of experience under my belt, I find MicroStrategy’s ambitious $1 trillion valuation vision intriguing and potentially transformative for the digital asset industry. Michael Saylor’s unwavering belief in Bitcoin as the top asset of the 21st century is reminiscent of the dot-com era, where visionaries dared to dream big and disrupt traditional industries.
MicroStrategy Inc (NASDAQ: MSTR) is striving to achieve a market capitalization of one trillion dollars by transforming into the world’s leading Bitcoin banking institution, according to Michael Saylor, its founder and executive chairman. During a recent conversation with analysts at Bernstein Research, this ambitious plan was divulged as per The Block’s report.
Starting from 2020, MicroStrategy has been amassing Bitcoin through a combination of borrowed funds and stock sales, aiming for higher yields compared to conventional investments. In the past month alone, the company purchased an additional 7,420 Bitcoins, boosting its total holdings to a staggering 252,220 BTC, now valued at more than $15 billion. With accumulated costs amounting to approximately $9.9 billion and a debt of $4 billion, MicroStrategy stands as the biggest corporate Bitcoin owner, accounting for 1.2% of the total 21 million Bitcoins in circulation, as per Bitcoin Treasuries data.
Photo: Bitcoin Treasuries
- Saylor believes Bitcoin is the top asset of the 21st century. He sees it as a digital form of capital that protects against inflation and holds long-term value. He argues that Bitcoin’s volatility draws in investors seeking big gains and expects it to become common in both institutional and individual portfolios.
MicroStrategy’s $1 Trillion Bitcoin Vision
Under Michael Saylor’s guidance, MicroStrategy has demonstrated a robust faith in Bitcoin’s future prospects. If his prediction comes true and the company accumulates billions worth of Bitcoin, the outcomes could be groundbreaking. According to Saylor, he aims for MicroStrategy to metamorphose into a banking institution specializing in Bitcoin, providing financial instruments such as stocks, loans, and convertible bonds that revolve around Bitcoin.
Gautam Chhugani, an expert on digital assets at Bernstein, pointed out that Saylor views Bitcoin as the world’s most precious asset. Saylor intends to manage between $100 and $150 billion worth of Bitcoin through preferred stock, debt, and various other financial instruments for MicroStrategy. His goal is to exploit volatility to construct a business valued at $300 to $400 billion, ultimately transforming MicroStrategy into a company worth $1 trillion.
The approach relies on the function of Bitcoin as a form of deflationary currency. At present, Bitcoin accounts for only 0.1% of global financial assets, but MicroStrategy’s founder, Saylor, anticipates this proportion could escalate to 7% by 2045, causing each coin to be worth approximately $13 million. If the U.S. capital markets persist in backing MicroStrategy’s fundraising efforts through both debt and equity, significant growth may occur. In Saylor’s most optimistic projection, he anticipates Bitcoin to increase by 29% yearly.
When asked about scaling their debt strategy, Saylor was confident and said:
Here’s one way of paraphrasing the given text:
Saylor Eyes 50% Bitcoin Returns
Chhugani discussed how Saylor believes that Bitcoin’s remarkable yearly growth offers a profitable opportunity via market strategies, bypassing conventional banking. Saylor suggested it is wiser to obtain substantial loans from fixed-income markets with a 50% annual return on investment in Bitcoin instead of seeking someone who would pay around 12%-14%.
Michael Saylor, MicroStrategy’s founder, contends that loans extended to conventional entities like individuals or governments hold higher risks compared to Bitcoin investments. He affirmed the company has no intention of lending its Bitcoin. Instead, their strategy is geared towards acquiring substantial amounts of capital through borrowing and directly investing in Bitcoin for potentially lucrative returns, all while eliminating counterparty risk.
Saylor elaborated that taking out a $10 billion loan, providing slightly increased returns to creditors, and putting the money into Bitcoin with potential yields of 30%-50% is potentially more lucrative and safer. He projected that despite its volatility, Bitcoin could increase by around 22% every year for the next ten years, a growth rate challenging to find elsewhere.
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2024-10-11 17:54