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Michael Saylor: Bitcoin is real estate in space, the rich always love to buy real estate

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Michael Saylor: Bitcoin is real estate in space, the rich always love to buy real estate

Michael Saylor, the founder of MicroStrategy, who has made it his mission to promote Bitcoin, spoke in a CNBC interview about the success of MicroStrategy's transformation into a Bitcoin development company, and referred to Bitcoin as digital property, not currency.

MicroStrategy Buys Another 12,000 Bitcoins

MicroStrategy announced that it has used funds raised through convertible bonds, along with its existing cash reserves, to further purchase 12,000 Bitcoins at an average cost of $68,477 each. The company now holds a total of 205,000 Bitcoins with an average cost of $33,706.

"Bitcoin Development Company" Outperforms ETFs

Michael Saylor recently stated that MicroStrategy will undergo a rebranding to position itself as a "Bitcoin development company." In an interview, Saylor likened the role of MicroStrategy to that of a real estate company, acting as an agent for Bitcoin and leveraging its software expertise to generate cash flow. As a publicly traded U.S. company, MicroStrategy has its own stock, can issue bonds, and has access to options markets.

When asked about various asset management companies, such as BlackRock, issuing Bitcoin spot ETFs in January, Saylor proudly mentioned the recent issuance of MicroStrategy's convertible bonds:

  • Which company can issue bonds at less than 1% interest?
  • After issuing convertible bonds, buying Bitcoin for shareholders without immediate dilution of equity
  • Convertible bond investors receive interest, tax advantages, downside protection, and potential profit from stock price appreciation

Saylor also expressed enthusiasm about options, as several issuers, including BlackRock, have not received SEC approval for their Bitcoin ETF options products.

Note: Convertible bonds have a clause allowing bondholders to convert them into stock at a predetermined price when the stock price exceeds a certain level. The pricing principle combines corporate bonds with call options on stocks. This also indicates that MicroStrategy's stock itself has options market.

What is the operating principle behind MicroStrategy issuing convertible bonds with low interest rates and high conversion prices?

Bitcoin as Digital Property, Not Currency

Saylor mentioned in the interview that Bitcoin is digital property and surpasses other investments like gold, stocks, or real estate because it is digital, usable, global, ethical, and beneficial to millions of companies and billions of people. He described

buying Bitcoin as purchasing valuable real estate in cyberspace, and wealthy individuals always like to invest in real estate.

Regarding the previous notion of Bitcoin as digital currency, he believes that Bitcoin no longer fits the definition of currency, especially as governments continue to print money while Bitcoin has a fixed supply.