Earlier today, in an interview on CNBC’s “Squawk Box,” Michael Saylor, MicroStrategy’s co-founder and executive chairman, extensively discussed the company’s Bitcoin investment strategy and its broader business initiatives. Saylor highlighted how MicroStrategy has remained committed to its Bitcoin strategy, even amid market volatility. According to Saylor, the company has consistently added to its Bitcoin position since August 2020. He proudly noted that since then, MicroStrategy has accumulated approximately $8.3 billion worth of Bitcoin.
Saylor emphasized that MicroStrategy’s investment in Bitcoin has delivered superior returns compared to traditional stock market investments. He stated that Bitcoin’s value has increased by an average of 44% annually since the company’s initial investment, outperforming the S&P 500, which has risen by 12% annually over the same period. He further asserted that MicroStrategy, with its Bitcoin-focused strategy, has outperformed every company in the S&P 500, including Nvidia, which had seen gains of 821% as of the interview date.
While Bitcoin is central to MicroStrategy’s investment strategy, Saylor clarified that the company continues to operate its original software business, describing it as a “cash cow.” However, the primary focus has shifted to securitizing Bitcoin. He explained that the company has been selling convertible bonds backed by Bitcoin, offering a range of investment opportunities. He noted that some investors prefer high-risk options, while others prefer less volatile investments, and MicroStrategy caters to both by providing exposure to Bitcoin with varying levels of risk.
Saylor explained how MicroStrategy has also pioneered the Bitcoin-backed bond market, issuing convertible bonds collateralized with Bitcoin. These bonds offer the potential for significant returns while allowing investors to hedge against volatility.
When asked about the impact of new US-listed spot Bitcoin ETFs on the market, Saylor acknowledged that these ETFs have increased demand for Bitcoin but warned that they can also introduce volatility. He pointed out that spot ETFs provide one-for-one performance with minimal fees but lack the yields that MicroStrategy can generate through its convertible bond offerings. According to Saylor, MicroStrategy captures a 50% premium on its bonds and benefits from Bitcoin’s performance on the backend.
Saylor further addressed recent outflows from spot Bitcoin ETFs, which he attributed to the fast nature of Bitcoin trading. He explained that Bitcoin is “smart, fast, strong money,” and its liquidity allows investors to quickly move in and out of positions. He noted that this feature, while beneficial in the long run, can also lead to short-term volatility.
Drawing a comparison to traditional assets, Saylor remarked that Bitcoin is much more liquid and fungible than real estate or other physical assets. He used the example of a missile strike to explain that, unlike real estate, Bitcoin can be quickly traded or moved across borders, making it a valuable asset during periods of uncertainty. Despite its volatility, Saylor reiterated that Bitcoin acts as “digital gold” over the long term, and its performance, in his view, justifies its use as a store of value.
