MicroStrategy Wants to Be the World's First Bitcoin Bank

This is the statement of MicroStrategy Executive Chairman Michael Saylor, who believes that Bitcoin will become a trillion-dollar asset in the future.

In a recent interview with analysts at research and brokerage firm AllianceBernstein, Michael Saylor - founder and executive chairman of MicroStrategy - stated that the company's ultimate goal is to become the leading global Bitcoin bank.

Explaining the goal of becoming "The World's First Bitcoin Bank", MicroStrategy Executive Chairman stated:

• Bitcoin is the highest-performing asset of the 21st century.
• Bitcoin is a revolutionary form of digital capital, providing a strong "hedge" against inflation and a superior tool for storing long-term value.
• Saylor believes that Bitcoin's volatility attracts investors looking for high returns.
• Over time, Bitcoin will become a staple in both institutional and individual portfolios.

Saylor thus sees MicroStrategy as a Bitcoin bank, focused on creating Bitcoin-based capital market instruments in the areas of equities, convertible bonds, fixed income, and preferred stocks.

“This is the most valuable asset in the world,” Saylor said. The ultimate goal is to become a leading Bitcoin bank, or a Bitcoin finance company... if MicroStrategy holds $100-150 billion in Bitcoin, the company could reach a valuation of $300-400 billion, and eventually move to a trillion-dollar valuation as Bitcoin continues to appreciate."

The company's strategy is based on a long-term belief in Bitcoin as the best deflationary currency. Currently, Bitcoin accounts for only 0.1% of the total global investment capital, and Michael Saylor predicts that this number will increase to 7%, meaning that Bitcoin's price could reach $13 million by 2045.

Saylor believes that the company's strategy of raising capital through debt (equity or other similar instruments) can expand indefinitely, as Bitcoin will eventually become a trillion-dollar asset class. However, Saylor stressed that the biggest risk is Bitcoin's volatility.

"I don't have a problem What if we could raise another $100-$200 billion. That's a trillion dollar asset class, and then maybe $100 trillion. The only risk in this plan is Bitcoin. Either you believe Bitcoin will be something, or it won't be anything."

Gautam Chhugani, a digital asset specialist at Bernstein, suggested that Bitcoin's underlying average annual growth rate is attractive enough to make capital market arbitrage profitable, and lend Bitcoin like a traditional bank.

Contrary to the Bernstein expert's suggestion, Saylor argued that lending to individuals, businesses, and governments is riskier than "lending Bitcoin," stressing that MicroStrategy has no intention of lending Bitcoin like a traditional bank. Instead, the company wants to borrow money from financial markets at low interest rates to invest in Bitcoin, expecting an average annual return of around 22-29% without counterparty risk.

MicroStrategy believes it has bridged the USD and Bitcoin markets through its investment vehicles, giving it an advantage that other companies will find difficult to replicate. For example, mining company Bitcoin Marathon Digital (MARA), Metaplanet, or Semler Scientific... are gradually following MicroStrategy's footsteps, but cannot compete on the same scale.

Since August 2020, MicroStrategy has been actively buying Bitcoin, using debt/equity leverage to maximize profits, and this investment is currently yielding much higher returns than traditional investments.

The company's recent purchase of 7,420 BTC, brings its total Bitcoin holdings to 252,220 BTC, with a current value of over $15.4 billion, equivalent to 1.2% of the total supply of 21 million Bitcoin, making MicroStrategy the world's largest Bitcoin owner.