Investors get better returns from bitcoin than any other asset, says founder Michael Saylor. The company intends to proceed with the purchase, expecting the price to reach $13 million. 2025 clocks in on a “digital gold rush”.
MicroStrategy's end game is to become a Bitcoin bank.
The company does not lend bitcoin at any point, a bank might. But, founder Michael Saylor said Wednesday, money can be made from the core business of capital markets arbitrage.
“The end game is a leading bitcoin bank or merchant bank, or you could call it a bitcoin finance company,” Sailer said in a fireside chat hosted by Bernstein.
According to Bernstein, MicroStrategy is one of the world's largest bitcoin holders, with $16 billion — or about 1.3% of the global supply.
Its strategy is essentially based on issuing debt to buy bitcoin. This is based on the belief that inflation will increase the value of fiat currencies over the long term.
Sailer said he expects bitcoin to account for 7% of the world's total financial capital by 2045 — up from 0.1% currently.
At that time, the price of Bitcoin touched 13 million dollars.
“Bitcoin wants to borrow your money. Lend your capital to Bitcoin and get a return in Bitcoin,” Saylor Bernstein told the client event.
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He said it was “much smarter” to buy bitcoin for a better return than to borrow a billion dollars from the fixed-income market and lend it to something less good.
“Lending to individuals, corporations and governments is riskier than lending to bitcoin,” Sailer said.
“We don't currently plan to lend out our bitcoin,” he said.
Instead, he suggested borrowing $10 billion from bitcoin holders, giving them a 1% higher yield, and then “lending the bitcoin” at 50% interest “with no counterparty risk.”
Saylor founded MicroStrategy in 1989 as a software company. This company started buying Bitcoin in 2021 and now owns so much of its stock that its stock is a de facto crypto proxy.
gold rush
Saylor said that regarding bitcoin's long-term value, it will achieve legitimacy as financial institutions pile in and regulators embrace it.
“You're seeing the birth of a new asset class,” he said.
“We've gone through a phase of idealism, then the crazy years, and now we're in the institutional and corporate adoption phase,” Saylor said.
'You are seeing the birth of a new asset class.'
– Michael Saylor
“In 100 years we'll have a new asset class and a new way of thinking about money and capital embraced by regulators.”
He pointed to the acceptance of bitcoin spot exchange-traded funds in the US and the political will to allow Wall Street to regulate bitcoin.
Additionally, he added, US presidential candidates embracing crypto is “a big deal.”
This mainstream adoption starts the clock on a “digital gold rush”.
Starting in early 2025, he said, it would take 10 years for investors to buy bitcoin before there would be any left on the open market. Ninety-nine percent of that will be mined and sold by 2035.
“Once you get to January 1, 2035, you've only gained 1% of Bitcoin in 106 years. It's less than what MicroStrategy already has,” Sailer said.
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