MicroStrategy Now Holds 1 of Every 150 BTC with Seemingly No Exit Strategy
Stacking sats is a full-time job for Michael Saylor, co-founder and Executive Chairman of MicroStrategy. In yet another Bitcoin shopping spree, Saylor topped his “digital energy” by 1,045 BTC, to a total of 140,000 BTC.
Getting ever closer to profitability territory, what is Saylor’s exit strategy, if one exists?
MicroStrategy’s Bulging Bitcoin Balance
Michael Saylor buying more bitcoins is a common deja vu culprit. Last week, MicroStrategy repaid its $205 million Silvergate loan at a 21% discount. At the same time, the firm acquired another 6,455 BTC for $23,238 per Bitcoin.
This week, Saylor’s business intelligence firm bought an extra 1,045 BTC between March 24 to April 4, according to the latest 8-K filing with the Securities and Exchange Commission (SEC). The average price was $28,016, suggesting a bull run narrative on the horizon.
MicroStrategy and its subsidiaries hold 140,000 BTC as of April 4, worth around $4.17 billion. The aggregate purchasing price per BTC for the total stash is now $29,803. Given Bitcoin’s price moves over the last month, MicroStrategy will likely cross the profitability gap sooner than later, as it is just under $2k.
Why Does Michael Saylor Keep Stacking Sats?
At 140,000 BTC, MicroStrategy now holds one out of every 150 Bitcoin in existence, or 0.6% out of Bitcoin’s 21 million supply. If we account for the Chainalysis 2020 study, by which 3.7 million BTC is unrecoverable, this leaves 17.3 million BTC in potential circulation. Saylor’s Bitcoin stake then rises to 0.81% or one in every 123 Bitcoin.
To put this into perspective, Saylor’s Bitcoin balance is within the tiny 100k -1M address range, consisting of just four addresses. This suggests his game plan is to ‘corner the market’ early on. Specifically, to take charge of the vehicle that protects the company’s cash reserves against inflationary pressures, i.e., USD currency debasement.
The calculus is simple. MicroStrategy is betting on Bitcoin’s long-term value proposition by converting portions of cash reserves into BTC. One that will appreciate far beyond the value of expended cash at purchase.
To that effect, Saylor has been known to use several poetic framings to deliver Bitcoin’s value proposition to the public:
“Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.”
“Bitcoin is like digital gold on a big tech monetary network.”
“Bitcoin is the world’s first digital monetary network that operates like a central bank without centralizing control.“
“Bitcoin is the solution to the problem of how to store energy over time and across space.”
The last one is particularly telling as “digital energy.” All energy is transmitted into something over time.
For instance, the lifeforce energy expended into a 9-5 job results in a paycheck. But this paycheck is often devalued by inflation. Then, that paycheck is worth less in purchasing power than the initial expended lifeforce, resulting in wastage of the person’s lifeforce energy.
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Saylor Following in Henry Ford’s Footsteps?
The concept of “energy currency” is not new. In 1921, published in the New York Tribune, American industry titan Henry Ford played with the notion of energy currency that replaces gold. By backing currency with “units of power,” it would be possible to create a new monetary standard.
One that would break the stranglehold of “the international banking group to which we have grown so accustomed that we think there is no other desirable standard.”
Ford had plans to build the world’s greatest power plant to make it happen. However, it took Bitcoin’s decentralized mining network to materialize this vision in a more robust and viable manner.
Yet, Bitcoin’s vulnerability is far from removed. At the same time, Bitcoin’s Sweden-like electricity consumption is considered necessary by Saylor and other proponents, governments, and NGOs like Greenpeace view it as unnecessary.
Accordingly, the energy front will be the battleground for Bitcoin’s acceptance. If the public opinion sways in the Greenpeace direction, the proposal to impose a 30% electricity tax on Bitcoin miners might be the mildest measure out of the government’s toolset.
In the meantime, the failure of Silicon Valley Bank once again demonstrated that depositing money in banks is rife with counterparty risk. This is the first time Bitcoin’s self-custodial nature was so starkly contrasted against fiat deposits as unsecured loans.
And even if all customer deposits are FDIC-insured, the counterparty risk extends to currency debasement. After all, the central bank would then be forced to “print money digitally,” in the words of Fed Chair Jerome Powell.
In this light, Michael Saylor’s frequent public advocacy is to be expected. Bitcoin’s raison d’etre may already be proven, but it means nothing without its alignment with public perception.
If the Fed starts cutting rates by the end of 2023, do you think MicroStrategy will more than double its BTC RoI? Let us know in the comments below.