Bitcoin’s recent price stability has been characterized as a sign of strength by Michael Saylor, Executive Chairman of Strategy (MSTR). In a recent episode of Natalie Brunell’s “Coin Stories” podcast, Saylor articulated that the current market phase is one of consolidation, where long-term holders are selling portions of their holdings while institutions gear up for larger investments. He emphasized that when observing the one-year price chart, Bitcoin is up a staggering 99%, and this decreasing volatility is a promising indicator for the digital currency.
Saylor highlighted that many early adopters, who originally purchased Bitcoin at single-digit prices, are liquidating small amounts to meet practical financial needs, such as housing or education expenses. He compared this phenomenon to employees of a rapidly growing startup exercising stock options, suggesting that these actions reflect a natural evolution rather than a loss of confidence in Bitcoin. He stated that this trend is crucial for paving the way for corporations and large funds to enter the market once it stabilizes.
In addressing criticisms regarding Bitcoin’s lack of cash flow compared to traditional investments, Saylor contended that numerous valuable assets, including land, gold, and art, also do not generate income. “The perfect money has no cash flows,” he remarked, arguing that traditional institutions rooted in long-standing equity-and-bond paradigms are slow to adapt but will eventually be compelled to reassess their strategies.
Saylor also explored Strategy’s ambitions to revolutionize credit markets by utilizing Bitcoin as collateral, moving beyond its commonly perceived role as a mere store of value. He criticized conventional bonds as “yield-starved” and under-collateralized, proposing that Bitcoin-backed financial instruments could be designed to offer higher yields and reduced risks. He introduced the firm’s range of preferred-stock products—named Strike, Strife, Stride, and Stretch—which aim to deliver yields of up to 12%, all the while being significantly over-collateralized with Bitcoin. By doing so, he posited that his firm is endowing Bitcoin with qualities akin to cash flow, enabling it to fit into both credit and equity index frameworks.
Saylor also addressed the notable absence of Strategy from the S&P 500, despite its size and profitability. He pointed out that the firm only became eligible for inclusion this year due to changes in accounting standards, noting that other firms, including Tesla, endured a similar wait before their inclusion. He expressed optimism about eventual acceptance as the market grows more accustomed to the Bitcoin treasury model, which he anticipates would be recognized by late 2024.
Looking to the future, Saylor compared the emergence of Bitcoin treasury companies to the formative years of the petrochemical industry, foreseeing a decade filled with diverse products, business models, and fortunes. He predicted that Bitcoin would likely appreciate at an average rate close to 29% annually over the next twenty years, thus driving innovations in credit and equity.
In his closing remarks, Saylor conveyed a hopeful perspective regarding Bitcoin and societal relations at large. He suggested that much of the negativity observed online is exacerbated by bots and orchestrated campaigns rather than authentic grievances. “Bitcoin is a peaceful, fair, and equitable way for us to settle our differences,” he stated, expressing confidence that as more people embrace Bitcoin, notions of peace, equity, and fairness will proliferate.
