Billionaire Michael Saylor's Company Has Just Acquired This Popular Cryptocurrency
MicroStrategy continues to hold a significant amount of Bitcoin.
Bitcoin’s price has more than doubled this year, approaching its all-time high. While some investors may hesitate to join the rally, one of Bitcoin’s most ardent supporters—MicroStrategy’s billionaire Executive Chairman Michael Saylor—remains committed.
Under Saylor’s leadership, MicroStrategy made its first Bitcoin purchase of $250 million in 2020. By November 10, 2024, the company’s holdings had reached 279,420 Bitcoins, with a total purchase cost of $11.9 billion and a market value of $24.5 billion.
MicroStrategy’s Bitcoin holdings represent roughly a third of its enterprise value, which stands at $73.3 billion, and about 1.4% of Bitcoin’s total market cap of $1.8 trillion. The company has continued to acquire more Bitcoin even as the price has surged. Between October 31 and November 10, it added another 27,200 Bitcoins for $2.03 billion, at an average price of $74,463. So, why does this software company remain so optimistic about Bitcoin?
Saylor predicts Bitcoin's price will skyrocket.
Michael Saylor is confident that Bitcoin will reach $100,000 by the end of 2024 and could eventually climb to as high as $13 million over the next 21 years. This ambitious price target would represent a staggering 15,000% increase from its current value. In a CNBC interview, Saylor shared his belief that Bitcoin’s market share of global capital will rise from 0.1% to 7% as more financial institutions begin offering Bitcoin-related services. He also foresees Bitcoin trading at higher volumes than the S&P 500, driven by its open, global, and decentralized approach to capital markets.
A large portion of Saylor’s wealth is tied to Bitcoin’s performance. He personally owns 17,732 Bitcoins, worth about $1.6 billion, which represents nearly a fifth of his estimated net worth of $8.3 billion. An additional $6.5 billion of his net worth comes from his 9.9% stake in MicroStrategy, a company primarily valued for its Bitcoin holdings rather than its enterprise software business.Saylor predicts Bitcoin's price will skyrocket.
Michael Saylor is confident that Bitcoin will reach $100,000 by the end of 2024 and could eventually climb to as high as $13 million over the next 21 years. This ambitious price target would represent a staggering 15,000% increase from its current value. In a CNBC interview, Saylor shared his belief that Bitcoin’s market share of global capital will rise from 0.1% to 7% as more financial institutions begin offering Bitcoin-related services. He also foresees Bitcoin trading at higher volumes than the S&P 500, driven by its open, global, and decentralized approach to capital markets.
A large portion of Saylor’s wealth is tied to Bitcoin’s performance. He personally owns 17,732 Bitcoins, worth about $1.6 billion, which represents nearly a fifth of his estimated net worth of $8.3 billion. An additional $6.5 billion of his net worth comes from his 9.9% stake in MicroStrategy, a company primarily valued for its Bitcoin holdings rather than its enterprise software business.
Is MicroStrategy’s Bitcoin Strategy Viable?
MicroStrategy’s shift into Bitcoin investment was sudden. Before 2020, the company was primarily known as a slow-growth provider of data mining and analytics software. Over the decade from 2013 to 2023, its annual revenue dropped from $576 million to $496 million as it struggled to compete with faster-growing cloud giants like Microsoft and Salesforce. In response to this stagnation, Saylor pivoted the company’s strategy toward Bitcoin.
To revitalize its core software business, MicroStrategy has been transitioning its on-premise applications into subscription-based cloud services. The company also recently introduced its own generative AI platform, MicroStrategy AI, aimed at helping businesses integrate AI tools into their data applications. These cloud and AI ventures could provide stability to the software business and generate additional cash flow to support further Bitcoin acquisitions.
MicroStrategy's software business isn’t expected to show significant growth in the near term. From 2023 to 2026, analysts predict its revenue will grow at a meager compound annual growth rate (CAGR) of just 1%, while the company remains unprofitable on a generally accepted accounting principles (GAAP) basis.
The company is struggling financially as the impairment costs of its Bitcoin investments are surpassing the revenue generated by its software division. To fund these purchases, MicroStrategy has been increasing its debt and issuing more shares, causing its total liabilities to skyrocket since 2020. The number of shares outstanding has also more than doubled in the past four years. The company doesn’t plan to slow down either, with plans to raise $42 billion in the next three years—$21 billion from stock offerings and another $21 billion from selling debt securities—to fund more Bitcoin acquisitions.
MicroStrategy is fully committed to Bitcoin
If you're optimistic about Bitcoin and skeptical about the U.S. dollar, MicroStrategy could be an appealing way to bet on Bitcoin’s future. If Bitcoin’s value increases dramatically against the dollar, the company’s Bitcoin holdings could easily cover its dollar-denominated debt. However, if Bitcoin’s price falls, MicroStrategy’s financial position could suffer significantly. While the company’s strategy is risky, its large-scale investment in Bitcoin might ultimately yield substantial returns in the coming years.
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