Sat 12 October 2024 ▪
5
min reading ▪ acc
As of 2020, Michael Saylor, founder and executive chairman of MicroStrategy, has transformed his company into a bitcoin pioneer, amassing more than 252,000 BTC. Now he’s thinking even bigger. During a recent presentation to analysts at Bernstein, Saylor revealed his ultimate plan: to turn MicroStrategy into a trillion-dollar “bitcoin bank.” Its strategy is based on a bold belief: Bitcoin as a deflationary asset will redefine global financial markets.
From BTC Accumulation to Bitcoin Banking
MicroStrategy’s approach is based on a massive accumulation of Bitcoins. Over the years, the company has used debt and equity to finance its purchases.
This strategy has allowed MicroStrategy to amass an impressive amount of Bitcoins, which now represent approximately 1.2% of the global supply.
But Saylor doesn’t stop there: he sees this accumulation as the first step. The growth potential of BTC is huge for him and he expects the price to increase exponentially up to several million dollars per BTC.
The bitcoin banking concept that Saylor is planning is not a traditional bank. Unlike institutions that lend money, MicroStrategy plans to borrow at low rates to invest those funds in BTC.
The idea is simple: take advantage of the appeal of Bitcoin, which is seen as a hedge against inflation, and generate average returns estimated at 29% per year. By increasing its holdings through this method, MicroStrategy seeks not only to maximize its profits, but also to establish itself as a key player in the BTC capital market.
This “Bitcoin Banking” model is gaining momentum. Saylor plans to use various financial instruments such as stocks, convertibles and bonds to raise long-term funds and transform them into BTC holdings.
He believes this approach could create a company worth between $300 billion and $400 billion through the accumulation of bitcoin and speculation on its future value.
A bold vision
For Michael Saylor, bitcoin is much more than just an asset. He describes it as the best-performing asset of this century and believes it will change the global financial system.
Indeed, Saylor predicts that Bitcoin could account for 7% of global financial capital by 2045, which would mean a price of $13 million per BTC.
Such an award would propel MicroStrategy to new heights, allowing it to become one of the largest holders of Bitcoin in the world and establish itself as a leading institution in the sector.
Saylor sees the traditional banking model as obsolete in the face of Bitcoin’s opportunities. In his view, current financial institutions are constrained by restrictive lending models and assets whose value is vulnerable to inflation.
In contrast, MicroStrategy is looking to take advantage of the digital scarcity and deflationary nature of Bitcoin. According to him, this approach is not only profitable, but also infinitely scalable. For MicroStrategy, every drop in the price of BTC is a buying opportunity, and every increase strengthens the value of its assets.
From this point of view, the risk, although considerable, is clear: everything depends on the future value of Bitcoin. Indeed, Saylor believes that if Bitcoin continues to grow, MicroStrategy will have a unique financial buffer.
The company could then afford to raise tens or even hundreds of billions of dollars while continuing to accumulate BTC. This ambitious strategy could redefine the role of companies in the cryptocurrency world and pave the way for new financial models. Also discover these two giants flocking to Bitcoin.
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Fascinated by Bitcoin since 2017, Evariste continued to research the topic. If his first interest was trading, now he is actively trying to understand all the developments focused on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the industry as a whole.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.