Microstrategy's Saylor on Bitcoin: Our strategy beat every company on the S&P index
Summary
TLDRIn a discussion with MicroStrategy's Executive Chairman, Michael Saylor, it's revealed that the company has invested approximately $8.3 billion in Bitcoin, outperforming the S&P 500 with an 825% increase since leveraging. Despite market volatility, MicroStrategy continues to secure Bitcoin, leveraging it into a 'cash cow' software business and pioneering Bitcoin-backed bonds. Saylor highlights Bitcoin's liquidity and fungibility, positioning it as a strong investment alternative, even in times of crisis, and discusses the company's strategy to capture yields through bond issuance and the impact of ETF outflows on Bitcoin's demand.
Takeaways
- 💼 Michael Saylor, MicroStrategy Executive Chairman, discusses the company's continuous investment in Bitcoin.
- 📈 Despite market volatility, MicroStrategy has seen an average annual increase of 40% in their Bitcoin holdings since their initial investment.
- 💹 MicroStrategy's Bitcoin strategy has outperformed every company in the S&P 500, with an increase of 825% since leveraging Bitcoin.
- 🏦 The company still operates a software business, which serves as a 'cash cow' and funds their Bitcoin investments.
- 💵 MicroStrategy has pioneered the Bitcoin-backed bond market by issuing bonds secured by 5x Bitcoin collateral.
- 📊 The company offers a unique investment opportunity with high-performance equity and a deep options market.
- 📉 MicroStrategy has not faced any significant margin calls, even during times of market stress, and has made money on redemptions.
- 💸 The company has issued bonds paying 1% interest, capturing a significant yield upfront and on the backend.
- 🚀 MicroStrategy's strategy allows for large investments in Bitcoin that individual investors cannot easily replicate.
- 💰 There has been a significant outflow from an ETF, which Michael Saylor suggests is a positive development for Bitcoin's demand and liquidity.
- 🌐 Bitcoin is described as the most liquid and fungible asset in the world, with the ability to be traded quickly even in times of crisis.
Q & A
What is the current Bitcoin position of MicroStrategy?
-MicroStrategy has bought approximately $8.3 billion worth of Bitcoin.
How has Bitcoin performed on average annually since MicroStrategy's investment?
-Bitcoin has been up 40% on average per year since MicroStrategy's investment.
What was the outcome of MicroStrategy's redemption when Silver Gate Bank failed?
-MicroStrategy made money on the redemption when Silver Gate Bank failed.
How does MicroStrategy's Bitcoin strategy compare to the S&P 500 and other companies in terms of returns?
-MicroStrategy's Bitcoin strategy has outperformed the S&P 500 and every single company in the index, with an increase of 825% since leveraging it.
What is the role of MicroStrategy's software business in the company's operations?
-The software business at MicroStrategy generally acts as a cash cow, providing a steady stream of income for the company.
What is the significance of MicroStrategy's pioneering in the Bitcoin-backed bond market?
-MicroStrategy has pioneered the Bitcoin-backed bond market by issuing bonds backed by 5x Bitcoin collateral.
How does the investment in MicroStrategy's stock differ from investing in an ETF in terms of leverage and yield?
-Investing in MicroStrategy's stock involves more leverage and potential for higher yields compared to an ETF, which typically has a performance fee and no yield.
What advantages does MicroStrategy have over individual investors when it comes to borrowing and investing in Bitcoin?
-MicroStrategy can borrow large amounts, such as a billion dollars, at a low percentage and hold Bitcoin for years, which is not feasible for individual investors.
What is the impact of the $1.2 billion outflows from the ETF on the market according to MicroStrategy's perspective?
-MicroStrategy views the outflows from the ETF as a generally positive development, as it creates more demand for Bitcoin.
How does the liquidity and fungibility of Bitcoin compare to traditional assets like New York real estate?
-Bitcoin is considered the most liquid and fungible asset in the world, unlike New York real estate, which is not easily liquidated in a panic.
What is the long-term outlook for Bitcoin's performance according to the discussion in the script?
-The long-term outlook for Bitcoin is positive, with an annual increase of 40% over the years.
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