Saylor's Trillion-Dollar Dream 💰
MicroStrategy defeats S&P 500. Saylor's Bitcoin obsession continues. Who else wants to be MicroStrategy? What's better than BTC?
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We all love Bitcoin.
We all dream Bitcoin.
We all buy Bitcoin too.
But, no one's quite as obsessed as Michael Saylor.
This guy's Bitcoin love is so intense - like a superhero origin story.
And guess what? His obsession is paying off big time.
How obsessed?
So much that he has turned a business intelligence company into a Bitcoin-first firm.
We are talking about MicroStrategy.
The company that has championed Bitcoin, like no other.
And now, everyone wants to do the same - The Bitcoin strategy.
Read: Should You Invest in MicroStrategy’s Bitcoin Bet? 🍔 🤔
Let’s break it down?
MicroStrategy shares have soared a jaw-dropping 1,540% since 2020
They've outperformed every company in the S&P 500 index
Their stock is up 1,700% since their first Bitcoin purchase
The company's trading at a 270% premium to its Bitcoin holdings
But wait, Saylor, MicroStrategy's head honcho, is dreaming big. How big, you ask?
Become the leading "Bitcoin bank"
Raise $100-150 billion in Bitcoin
Grow to a $300-400 billion company
Eventually hit that sweet, sweet trillion-dollar valuation
Saylor's strategy? Borrow low, invest in Bitcoin, and watch it grow. He's betting on a base case of 29% annual returns.
Why's MicroStrategy stock so hot?
Leverage: They're using debt to amplify their Bitcoin holdings
Software biz: Steady cash flow to service debt
Saylor himself: Market loves his aggressive Bitcoin strategy
Block That Quote
Founder and Executive Chairman of MicroStrategy, Michael Saylor
"Bitcoin is going to go to millions a coin, you know, and then we create a trillion dollar company."
Saylor's not just bullish; he's got his own constellation in the shape of a bull.
Okay that’s a bit too much.
But, Saylor's envisioning a future where MicroStrategy is the JPMorgan of the crypto world.
“This is the most valuable asset in the world. The endgame is to be the leading bitcoin bank, or merchant bank, or you could call it a bitcoin finance company,”… “If we end up with $20bn of converts, $20bn of preferred stock, $10bn of debt and say $50bn billion of some kind of debt instrument and structures instrument, we'll have $100-$150bn of bitcoin.”
No borrowing, but lending.
Why? the lack of counterparty risk associated with lending to bitcoin.
“We think it’s a better idea to borrow $10bn from people who would be eager to lend and give them a 100 basis point more yield, and then lend to bitcoin for 30% to 50% interest with no counterparty risk,” he explained. “Once you get past the volatility and learn to manage it, the bear-case scenario I foresee is bitcoin increasing by only 22% a year over the next decade. Who would pay you 22% interest?”
Now everyone wants to be MicroStrategy? Let’s dig that.
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🛒 Who's Been Shopping?
Since Bitcoin's March madness (hello, all-time high!), at least six companies have been filling their digital shopping carts:
MicroStrategy (duh, obviously)
Block (Jack Dorsey's still in the game!)
Metaplanet
Semler Scientific
OneMedNet
Real Bedford FC (owned by Bitcoin podcaster Peter McCormack)
Total Bitcoin bought: ~48,836 BTC
Estimated spend: $3.09 billion
MicroStrategy scooped up 97% of that Bitcoin haul. The other players? They're working with $92.7 million.
Since MicroStrategy first dipped its toes in the Bitcoin pool back in August 2020:
At least 15 companies have jumped on the Bitcoin bandwagon
They've gobbled up 277,503 BTC (that's 1.4% of the circulating supply)
The buying spree is accelerating: 32 purchases in 2024 so far, compared to just 9 in all of 2023
With more companies treating Bitcoin like cash, we might be seeing the start of a new corporate finance trend. But not everyone's on board – Tesla sold 75% of its stash between 2021 and 2022.
In The Numbers 🔢
480%
That's the increase in Metaplanet's share price since they unveiled their Bitcoin investment strategy in early April.
Not too shabby for a company playing catch-up with MicroStrategy.
Just bought 107 Bitcoin for $6.7 million
Total stash now: 855.5 Bitcoin (worth $56.1 million)
Their shares jumped 15.7% on the news on October 15
Up 480% since unveiling their Bitcoin strategy in April
This is their fifth Bitcoin purchase this month alone. They've more than doubled their holdings in October.
Metaplanet is already up 5.4% on their total Bitcoin investment.
They now boast the 23rd largest Bitcoin holdings among public companies.
Malta-based Samara Asset Group is joining the game
Planning a €30 million ($32.8 million) bond
Aiming to hold 1,000 BTC by year-end
Co-founded by Bitcoin bull Mike Novogratz
CEO Patrick Lowry dreams of stacking as much as Saylor
What’s better than Bitcoin?
More Bitcoin.
Saylor believes that, and rightfully so.
BTC v MSTR
MicroStrategy has significantly outperformed Bitcoin in both the year-to-date and one-year return metrics, with MSTR achieving returns of over.
Risk Metrics
The Sharpe Ratio indicates that MicroStrategy offers a better risk-adjusted return compared to Bitcoin, with a ratio of 4.36, suggesting higher returns per unit of risk taken. However, MSTR also experiences greater volatility, making it a riskier investment overall.
The Surfer 🏄
About 94% of private wealth in Asia is either investing in or considering cryptocurrencies, with 76% already having made investments. Among those surveyed, 31% anticipate Bitcoin will surpass $100,000 by the end of 2024, reflecting growing optimism and interest in digital assets across the region.
Surveys reveal a surge in crypto interest among voters in key swing states like Pennsylvania and Wisconsin, with search activity increasing by 5.3% and 4.7% since the last election. Additionally, nearly half of traditional hedge funds now have exposure to digital assets.
Crypto activity has surged to an all-time high, with monthly active addresses reaching 220 million. Andreessen Horowitz's latest State of Crypto report shows that DeFi leads in daily active addresses, followed closely by stablecoins.
Vitalik Buterin outlines ambitious plans for Ethereum's next phase, aiming for over 100,000 transactions per second (TPS) across the mainnet and layer 2s. He emphasises the need for Ethereum and its layer 2s to function as a unified ecosystem rather than separate blockchains.
Bitcoin ETFs saw net inflows of $1.18 billion over just three days, with a record total of $19.73 billion in cumulative inflows. BlackRock's IBIT led the charge with $288.8 million in inflows, contributing significantly to the overall surge alongside Fidelity.
US-listed Bitcoin miners reached a record 29% of the global network hashrate in October, according to JPMorgan. The network hashrate rose by 4% this month, while mining profitability (hashprice) increased by less than 1%.
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Good stuff!! Thank you for sharing!! ♥️☀️☮️🌈🏁
I respect Saylor's conviction, but the trillion-dollar dream seems overly ambitious. It’s one thing to accumulate a massive Bitcoin holding, but another to navigate macroeconomic shifts and regulatory scrutiny. That said, the fact that MicroStrategy has become a de facto ETF for Bitcoin is something traditional finance can’t ignore.