MicroStrategy’s Michael Saylor reveals ingenious dual strategy, turning billions in losses into profitability with Bitcoin investments, endorsing BTC ETF.
In a recent interview, MicroStrategy’s Executive Chairman, Michael Saylor, shed light on the company’s ingenious dual strategy, which saw it return to profitability after previously stomaching losses in billions of dollars.
Saylor confidently stated that the marriage of the two strategies has proven more valuable than their individual parts.
According to the chairman, the operating company offers investors diversification against the volatility of Bitcoin while also providing access to low-cost borrowing, with a blended cost of capital as low as 1.5%. This enables MicroStrategy to channel borrowed funds into Bitcoin investments.
On the other hand, the company’s investments in Bitcoin have yielded impressive returns after surging by 145% since MicroStrategy began its purchases.
Moreover, he highlighted that the Bitcoin position generates volatility in the company’s stock, allowing MicroStrategy to raise capital at lower costs, which, in turn, is reinvested to grow the business further.
Recall that MicroStrategy recently acquired over 12k BTC, bringing its total holding to a staggering dollar value of $4.52 billion, as The Crypto Basic reported.
There’s Consensus about Bitcoin’s Uniqueness
When discussing the rally in Bitcoin’s price, Saylor attributed it to a growing consensus that Bitcoin is a unique and valuable international asset. Saylor argued that endorsements from politicians, regulators, and investors had reinforced this sentiment.
— Documenting ₿itcoin 📄 (@DocumentingBTC) August 2, 2023
Furthermore, the MicroStrategy chairman expressed that the potential approval of a Bitcoin spot exchange-traded fund (ETF) has also boosted near-term sentiment for Bitcoin. He stressed that ETF represents an accessible and secure way for investors to participate in crypto without navigating complexities.
Will Bitcoin ETF Affect MicroStrategy?
Addressing concerns about the impact of a spot ETF on MicroStrategy’s investor base, Saylor assured that it would not be a threat to the company.
Instead, he likened Bitcoin to a beautiful house in a scary neighborhood and a spot ETF would be like that same house in a safe neighborhood with more convenient accessibility.
“It’s not a threat to MicroStrategy; MicroStrategy is like that beautiful house with 10,000 acres of ranch land behind it that generates cash flow that has a management team,” he remarked.
Regarding Bitcoin’s price performance over the past three years, Saylor believes it is crucial to consider the broader context. While some may see the current price hovering around $30,000 as disappointing, he highlighted that Bitcoin’s performance has significantly outpaced other traditional assets during the same period.
He argued that Bitcoin showed a staggering 145% increase, while the S&P has only risen by 37%, and gold and bonds have experienced declines.