Exclusive Interview with MicroStrategy: Founder Michael Saylor, the Company Holding the Most Bitcoin Globally, Discusses Why You Should Buy Bitcoin
MicroStrategy, MSTR, is the world's largest publicly traded company holding Bitcoin. Its founder and chairman, Michael Saylor, detailed "Why Bitcoin is an ideal investment choice" in an interview with Finance Magazine. He shared how the company restructured its capital by acquiring Bitcoin and emphasized Bitcoin's unique position in the digital asset market.
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Michael Saylor stated that in 2020, MicroStrategy had stable cash flow and loyal customers, but the capital markets showed little interest in its stock. Saylor explained that the company started looking for high-growth investment opportunities and ultimately chose Bitcoin, seeing it as a monopolistic, high-growth digital asset.
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Capital Restructuring and the Power of BitcoinSaylor emphasized that MicroStrategy raised $7 billion over four years and purchased $7.5 billion worth of Bitcoin, which has now nearly doubled in value. The company's market value and enterprise value have grown 20 times and 40 times, respectively. He stated that digital assets help change a company's capital structure to address low growth and inflation pressures.
Traditional capital strategies such as stock buybacks and purchasing government bonds face high funding costs and double taxation issues. Saylor pointed out that Bitcoin, as an asset, can avoid these problems and provide higher long-term returns.
He mentioned that until January 2024, Bitcoin was not clearly defined as a tangible asset, so its depreciation could not be offset. This would have a negative impact on the income statement and balance sheet, and traditional CFOs did not support a Bitcoin strategy. The first quarter of 2024 will start using fair value accounting, allowing companies to separate investment gains and losses from operating income, which is a significant change in the accounting world for Bitcoin. This year, the U.S. Securities and Exchange Commission approved 11 Bitcoin spot ETFs, signaling to the market that Bitcoin is an institutional-grade asset, allowing a large inflow of funds into the Bitcoin ecosystem.
Bitcoin spot ETFs are non-leveraged investment tools operated under the supervision of investment companies. If an investor puts in $1 million, they will purchase an equivalent value of Bitcoin, and investors will pay a small fee. MicroStrategy, like Tesla, Block, and Bitcoin miners, can issue new shares to raise capital and use venture capital to take risks, unlike traditional ETFs.
He mentioned that MicroStrategy raises capital through convertible bonds for low-cost Bitcoin investments and generates spreads for shareholders. This differs from ETF operations, as we can convert premiums into shareholder benefits. While ETFs are like cargo ships for quick large-scale investments, MicroStrategy can create premiums through capital structure and conduct arbitrage buybacks of Bitcoin to create more benefits for shareholders. MicroStrategy is tokenizing Bitcoin, allowing us to lock in a large amount of Bitcoin for profits from market operations, which has a positive impact on Bitcoin demand and liquidity.
The Investment Value of Bitcoin: The Digital ManhattanSaylor believes that Bitcoin is a scarce digital commodity whose value steadily grows with increasing demand. He likens Bitcoin to the "Manhattan" of the digital world, with a fixed number of blocks, making it an ideal long-term investment.
He stated that Bitcoin is a great city in the digital world, with 276×276×276 blocks, totaling never exceeding 21 million coins. Buying Manhattan real estate in New York has been a good deal for the past 300 years, and we see ourselves as a digital real estate development company, calling ourselves a Bitcoin development company. With each transaction, we acquire more Bitcoin, buy Bitcoin through premium securities, and create shareholder value. People generally desire to collect rare items like Da Vinci's paintings or the Magna Carta, or land in the prime areas of London, Paris, or New York, all of which have some elasticity. Bitcoin represents something with completely inflexible pricing, so MicroStrategy's strategy is to keep buying into the digital Manhattan.
The Future Development of BitcoinSaylor envisions the future of Bitcoin, believing it will become the core of the global digital asset market. He mentioned that the U.S. Securities and Exchange Commission approved multiple Bitcoin spot ETFs, which will attract more funds into the Bitcoin market, further enhancing its value. Bitcoin's decentralization and robust computing network make it the safest and longest-lasting digital asset. Saylor pointed out that Bitcoin has never been successfully hacked, and its technical stability and security far surpass other digital assets.
Saylor believes that Bitcoin is not just an investment asset but also a part of the global financial market. Its adoption and application will bring about a structural change in the economy, becoming a crucial cornerstone of the future digital economy.
Strategic Advice for Investing in BitcoinFinally, Saylor provided specific advice on investing in Bitcoin, emphasizing its value as a long-term capital asset. He believes that both companies and individuals should consider converting some assets into Bitcoin to address future uncertainties and inflation pressures.