- Founder Michael Saylor said investors can earn higher returns from Bitcoin than from any other asset.
- The company expects the price to reach $13 million and intends to continue buying.
- 2025 marks the beginning of the “digital gold rush.”
MicroStrategy's ultimate goal is to become a Bitcoin bank.
The company won't be lending out Bitcoin anytime soon like banks. But founder Michael Saylor said Wednesday that the company could profit from its core business of capital markets arbitrage.
“The ultimate goal is to become a major Bitcoin bank or merchant bank, or even a Bitcoin financial company,” Saylor said in a fireside chat hosted by Bernstein.
Bernstein said MicroStrategy is one of the world's largest Bitcoin holders, with holdings worth $16 billion or about 1.3% of the world's supply.
The strategy essentially relies on issuing bonds to purchase Bitcoin. This is based on the belief that while inflation will weigh on fiat currencies, their long-term value will rise.
Thaler said he predicts Bitcoin will account for 7% of all global financial capital by 2045 (currently it is 0.1%).
At that point, the price of Bitcoin will reach $13 million.
“Bitcoin wants to borrow your money. Lend your capital to Bitcoin and receive a return in Bitcoin,” Thaler said at a Bernstein client event.
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He said it would be “much smarter” to borrow, say, $1 billion from the bond market and buy Bitcoin, which doesn't have much return, than to lend it to something that doesn't have much return.
“Lending to individuals, businesses, and governments is riskier than lending to Bitcoin,” Saylor said.
“We have no plans to lend out Bitcoin at this time,” he said.
Instead, he proposed borrowing $10 billion from Bitcoin holders at up to a 1% higher yield, and then “lending back Bitcoin” at up to 50% interest “without counterparty risk.”
Thaler founded MicroStrategy as a software company in 1989. The company started buying Bitcoin in 2021 and now owns enough stock to become a de facto cryptocurrency agency.
gold rush
Saylor argued for the long-term value of Bitcoin, saying it is gaining legitimacy as financial companies come on board and regulators embrace it.
“We're seeing the birth of a new asset class,” he said.
“We went through the idealism phase, then the craziness phase, and now we're in the institutional and corporate implementation phase,” Saylor said.
“You're seeing the birth of a new asset class.”
— michael saylor
“This is the first time in 100 years that a new asset class is actually being created and regulators are adopting a new way of thinking about money and capital.”
He pointed to the approval of a Bitcoin spot exchange-traded fund in the United States and the political will to allow Wall Street to control Bitcoin.
Moreover, the adoption of cryptocurrencies by US presidential candidates was “a big deal,” he added.
This mainstream adoption will begin a “digital gold rush.”
Starting in early 2025, it will take 10 years for investors to buy Bitcoin until there are no more Bitcoins on the public market, he said. Ninety-nine percent of it will be mined and sold by 2035.
“On January 1, 2035, only 1% of Bitcoin will be out in 106 years, which is less than MicroStrategy already owns,” Saylor said.
Contact the author at joanna@dlnews.com.
