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

Summary

In 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.