Why Does MicroStrategy Bet Everything on Bitcoin?

Michael Saylor, co-founder of MicroStrategy, has explained the rationale behind his company’s decision to embrace Bitcoin as a core part of its financial strategy, a move initiated in August 2020.

During a CNBC interview, Saylor shared his perspective on why Bitcoin’s unique attributes—such as its volatility and fixed supply—made it an attractive investment for the tech company, which has since become a major institutional holder of the cryptocurrency.

Saylor pointed out that Bitcoin’s volatility is one of the reasons it stands out in comparison to other assets like gold and silver. He argued that while these traditional commodities lack the same level of volatility, Bitcoin’s scarcity makes it a compelling long-term store of value. The cryptocurrency’s annual recurring revenue (ARR) also far outpaces other commodities, despite its 60% volatility rate, further underscoring its potential for growth.

The MicroStrategy executive went on to emphasize Bitcoin’s edge over stocks and other financial securities. Saylor noted that while public companies can only allocate a limited portion of their assets into securities, Bitcoin presents a more flexible option, with investors able to put 100% of their liquid assets into the digital asset, as per SEC guidelines.

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Saylor’s remarks come as MicroStrategy continues to increase its Bitcoin holdings, with the company purchasing an additional 15,400 BTC for $1.5 billion. This purchase is part of an ongoing strategy that has seen the company spend over $11 billion on Bitcoin, and Saylor remains unfazed by the volatility, even predicting a potential surge for the cryptocurrency to $180,000, followed by a correction to around $140,000.

Having weathered the crypto market’s ups and downs, including the 2021 bear market, MicroStrategy is poised to maintain its Bitcoin-heavy strategy, confident that the digital currency’s long-term prospects will continue to outpace traditional assets.

Kosta Gushterov