Michael Saylor Reveals $100 Trillion Impact MicroStrategy ‘Endgame’ As Bitcoin Price Surges

Bitcoin
Bitcoin
has changed wildly this week as analysts warn that “something’s got to give”.

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The price of bitcoin has recovered above $60,000 per bitcoin after a drop earlier in the week, even as JPMorgan analysts quietly predict that the so-called “downgrade trade” could fuel a rally in the price from bitcoin to the US election.

Now, after the mystery of bitcoin creator Satoshi Nakamoto took a surprise turn, Michael Saylor, founder and executive chairman of MicroStrategy, has revealed that the company’s end goal is to become a bitcoin investment bank and buy up to $150 billion worth of bitcoins.

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“(Bitcoin) is the most valuable asset in the world,” Saylor, who began buying bitcoins on the bitcoin-turned-software acquisition vehicle in 2020, told Bernstein analysts in an interview that revealed the leader of Bernstein’s digital assets Gautam Chhugani in a note to clients seen by The Block.

“The end game is to be the main bitcoin bank, or the commercial bank, or you could call it a bitcoin finance company,” said Saylor, with MicroStrategy building bitcoin capital market instruments through equity, convertibles, fixed income and preferred shares.

“If we end up with $20 billion of conversion, $20 billion of preferred stock, $10 billion of debt and say $50 billion of some sort of debt instrument and structures, we’ll have between $100 billion and $150 billion of dollars in bitcoins.”

Saylor has amassed just over 252,000 bitcoins worth $15.7 billion in MicroStrategy by issuing debt to fund bitcoin purchases, a strategy that could mean MicroStrategy receives a “margin” with a demand for additional capital if the price of bitcoin falls below a certain level, but one that Saylor intends to continue.

“I think it’s infinitely scalable,” replied Saylor. “I have no problem seeing how we could raise another $100 billion in capital and then $200 billion after that. This is a trillion-dollar asset class going to $10 trillion and then it will go to $100 trillion. The risk is very simple: You either think bitcoin is something, or you think it’s nothing.”

While other companies that have dabbled in bitcoin, such as Elon Musk’s Tesla or Wall Street giant BlackRock, have used earnings to fund their businesses or tried to extract fees from clients, Saylor’s strategy is simpler.

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“We just keep buying more bitcoins,” Saylor said. “Bitcoin will get to millions per coin, you know, and then we’ll create a trillion dollar company,” he said, predicting that the price of bitcoin will reach $13 billion by 2045 as it goes from 0.1% of world financial capital at 7%.

MicroStrategy’s stock has soared along with the price of bitcoin over the past year, outperforming bitcoin as the company’s shares attract buyers who want exposure to bitcoin but don’t want to pay the fees associated with new exchange-traded funds spot bitcoin exchange-traded fund (ETF) that debuted earlier this year.

The price of bitcoin is up 50% since January, while MicroStrategy shares are up just over 200%.

“On a relative basis to bitcoin, (MicroStrategy) shares are at their highest level since 2019,” Wolfe Research managing director Rob Ginsberg wrote in a note to clients seen by CNBCwarning that the stock is overbought and recommending “tactical hedging” of MicroStrategy’s gains by buying bitcoin directly.