Michael emphasized that MicroStrategy's investment strategy is straightforward: continuously acquiring Bitcoin rather than diversifying. He referred to Bitcoin as "Manhattan in cyberspace," suggesting a long-term vision where he believes there will be a time when the majority of the global population will want to invest in it. This consistent approach indicates a commitment to understanding and leveraging the digital asset, opposed to traditional market speculation.
2. Significant Purchasing Milestones
Michael outlined significant milestones in their Bitcoin purchases, highlighting that MicroStrategy has made a series of large purchases over time totaling $6.6 billion since their last quarterly results. These purchases show an increasing confidence in Bitcoin as a valuable asset, with recent acquisitions including $2 billion and $4.6 billion in just two weeks. This aggressive investment strategy speaks to a belief not just in Bitcoin's current value, but its potential future growth.
3. Innovative Financing Strategies
Michael discussed how MicroStrategy manages to buy Bitcoin effectively by utilizing convertible debt, which allows them to borrow significant funds at a very low interest rate. He explained that the company's ability to sell bonds with an option component has created an appealing investment vehicle, allowing them to tap into capital markets for sustained growth without risking capital through margin calls.
4. The Volatility Factor
Michael highlighted that MicroStrategy's stock is among the most volatile in the S&P 500, and rather than fearing this volatility as conventional investors do, he sees it as an opportunity. He analogized volatility to RPMs in an engine, which can generate significant financial gains for investors who are willing to take on that risk. This perspective shifts the typical view on risk and emphasizes the potential rewards that can come from trading in such a high-volatility environment.
5. Expanded Market Accessibility
Michael pointed out that many institutional investors are interested in Bitcoin, but due to regulatory constraints, they are unable to invest directly in it. Instead, these investors turn to MicroStrategy as an avenue to gain exposure to Bitcoin. This highlights the importance of positioning the company as a bridge for those who want to invest in Bitcoin while adhering to their organizational mandates.
6. Predicting Bitcoin's Growth Trajectory
Michael shared an ambitious forecast for Bitcoin’s future, predicting that its market share could grow from 0.1% to 7% of the world’s money over the next two decades. By calculating Bitcoin's potential market cap growth, he illustrated the substantial upside that investors could experience, positioning Bitcoin not only as a commodity but as a revolutionary financial asset.
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