Michael Saylor’s Vision: MicroStrategy as a Bitcoin Bank

Michael Saylor has revealed his company’s actual plan for its Bitcoin stash.

Beaver Bulletin · October 16, 2024 · By Andrew Throuvalas

1. MicroStrategy stock (MSTR) has risen to a twenty-year high after Michael Saylor revealed the company’s long-term direction in light of its BTC accumulation. 

The executive chairman’s goal, he said, is to evolve his firm into a “Bitcoin bank” with a potential trillion-dollar valuation. This would make it the eighth largest company in the world by market cap, putting it within the same league as big tech giants like Alphabet, Apple, and Meta.

“We saw Bitcoin as a big tech monetary network,” said Saylor during an event hosted by Bernstein last week, “like Google for money, or Facebook for money.”

His company’s goal, he explained, would be to become a Bitcoin bank that could provide investors capital market instruments tied to the digital asset.

“We are in the core business of creating Bitcoin capital market instruments across equity, convertibles, fixed income, and preferred shares,” he added.

Saylor’s company has famously spent the last several years issuing convertible debt at near-zero interest rates to accumulate more Bitcoin. The company’s stack has now risen to 252,220 BTC worth $16.9 billion at current prices.

While MSTR has largely tracked the price of BTC in the past, the stock’s price exploded this year to a premium well above that of the BTC held by the firm. A similar surge occurred this week after Saylor’s latest comments, with one share rising above $220 on Monday,

According to Yahoo Finance, the company’s market cap is $39.4 trillion as of Tuesday’s close, leading some to believe that the firm is overvalued. Others, however, think most don’t understand the potential of what Saylor is building.

“MicroStrategy directly benefits from this high premium to NAV,” wrote macro analyst Lyn Alden on Monday. “They can keep issuing more convertible notes or other types of capital, and use it to buy bitcoin, which increases their amount of bitcoin per share.”

2. Blockstream has raised another $210 million to boost its Bitcoin mining infrastructure and Layer 2 construction efforts.

Blockstream is the Bitcoin infrastructure company led by Adam Back – the famous developer who directly collaborated with Bitcoin creator Satoshi Nakamoto.

Blockstream runs a major Bitcoin mining business, provides wallet infrastructure through its Jade and Green wallets, and supports the Layer-2 Liquid network that allows for faster and cheaper BTC transactions.

“This latest fundraise represents a defining moment for Blockstream as we embark on a critical new phase of growth to further bridge the gap between bitcoin and the wider world of finance,” said Back regarding the raise.

Since 2018, over $1.8 billion in assets have been issued on the Liquid network. 

3. Galaxy Research claims Kamala Harris will be lighter on Bitcoin than the Biden administration.

Research head Alex Thorn noted that a Trump U.S. election victory in November would undoubtedly be the most bullish for crypto, but that Harris could still improve on Biden’s record with a more “neutral” stance.

Thorn arranged a campaign scorecard for the three politicians based on their campaign’s public statements and intelligence from campaign insiders. The report found that Harris struggles to measure up to Trump’s overt support for the industry, but also that supporting her presents “few downsides.”

Harris has recently begun making very subtle gestures of possible support toward Bitcoin. Last month, she promised to ensure the United States would “remain dominant in AI, quantum computing, blockchain, and other emerging technologies.” Earlier this week, she also revealed an agenda targeting black male voters with a regulatory framework that would protect crypto holders.

The latter wasn’t well received by everyone, however – particularly a statement saying she would “protect cryptocurrency investments so Black men who make them know their money is safe.”

“No idea what this even means but sounds racist,” said one Twitter user. “Send Kamala back to San Francisco.”

4. A new survey reveals that Salvadorans aren’t using Bitcoin even though they like Nayib Bukele.

Though El Salvador’s President spearheaded efforts to make Bitcoin legal tender back in 2021, BTC has seen little adoption as a medium of exchange on the ground.

A new survey from the San Salvador University Francisco Gavidia found that just 7.5% of people in the country actually use Bitcoin for making transactions. Most others are just sticking by the dollar. Furthermore, only 1.3% of people said they thought Bitcoin should be the country’s main bet.

It’s worth noting that El Salvador is also still HODLing BTC, and is up 51% ($69.9 million) on its BTC holdings overall.

Stay humble, 

Andrew