TL;DR In March 2024, Michael Saylor’s software company MicroStrategy owned more than 1% of the total amount of BTC ever to be issued. Still, the company’s Bitcoin buying spree shows no signs of slowing. Let’s see how Saylor employs his ‘speculative attack against the dollar’ and how MicroStrategy is morphing from a software company into a Bitcoin development company.
MicroStrategy is a Nasdaq-listed company that is involved with business intelligence and cloud services – but notorious for its BTC holdings. Michael Saylor, executive chairman of MicroStrategy, has a unique position compared to many of his executive peers:
- He owns 18% of the total outstanding stocks of MicroStrategy and has 65% voting power. He effectively controls the company.
- MicroStrategy is profitable and he has access to the American capital markets so the company can borrow dollars against low rates.
- Saylor has seen the Bitcoin light and wants his company to own a shit ton of it.
Accumulating BTC as Treasury Reserve Asset
At the time of writing, MicroStrategy has 214.000 BTC on its balance sheet, making it by far the largest Bitcoin treasury of any company (for comparison: Tesla owns roughly 9.000 BTC). See how they have accumulated since 2020 here: Bitcoin Treasuries MicroStrategy (and see the list of all public companies that own BTC).
Since the summer of 2020, MicroStrategy has periodically bought BTC and put it in their treasury. There is no intention of selling it back for dollars. In Saylor’s terms: why would you sell the winner to buy the loser?
Not that it has been clear skies all the time. There has been a large stretch of time – roughly between May 2022 and November 2023, when their BTC position was underwater. Some huge buys near the 2021 top were responsible for this.
It didn’t deter Saylor: he kept his spirits up, posting self-deprecating memes – and just kept stacking.
More Than a Software Company
So why all the relentless stacking, what is the plan? Here’s Bit Paine’s take:
What is the ‘massive macroeconomic arbitrage trade’ that this analyst is talking about?
First of all, Bit Paine draws an analogy between what Warren Buffett did with a small textile manufacturer-turned-insurance company called Berkshire Hathaway in 1965. Berkshire got rid of the textile business in 1985. Berkshire Hathaway’s main business and source of capital became insurance, from which it kept investing the premiums in a broad portfolio of subsidiaries, equity positions and other securities.
In other words, the insurance company Berkshire Hathaway, had become something of a shell, a front, for the investment conduit for Buffet and late Charlie Munger.
This applies to MicroStrategy too. Currently, the valuation of their stock leans much more heavily on their BTC holdings than on their software business. Holding and purchasing more BTC is now their core business, it seems 🙂 There’s more to it – but more on that later.
But there is more to the story of MicroStrategy. After all, Buffett didn’t do a ‘massive macroeconomic arbitrage trade’, as Paine calls it what Michael Saylor does. Michael Saylor’s plan with MicroStrategy is more intricate, and is quietly subversive. To make sense of this, let’s draw a parallel with George Soros and how he ‘broke the bank of England’.
Historic Parallel: George Soros…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
