Microstrategy's Saylor on Bitcoin: Our strategy beat every company on the S&P index

CNBC Television
9 Sept 202404:25

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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Étiquettes Connexes
Bitcoin StrategyMicroStrategyInvestment InsightsFinancial MarketsCryptocurrencyStock AnalysisETF DynamicsMarket VolatilityBitcoin AdoptionCorporate Finance
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