In summary
- Michael Saylor compared MicroStrategy’s Bitcoin strategy to the Manhattan real estate market.
- MicroStrategy confirmed its addition to the Nasdaq-100 as the fortieth largest constituent.
- The company raised its Bitcoin holdings to 439,000 BTC after purchasing an additional 15,350 BTC.
MicroStrategy CEO Michael Saylor compared his company’s aggressive Bitcoin strategy to Manhattan real estate during an interview with CNBC on Monday.
“Every time real estate in Manhattan goes up in value, they issue more debt to develop more real estate,” Saylor told CNBC Money Movers. “That’s why your buildings are so tall in New York City. This has been going on for 350 years. I would call it an economy.”
Saylor’s comments come as the leading Cryptocurrency briefly touched new highs above $107,000 in the early hours of Tuesday.
MicroStrategy’s addition to the Nasdaq-100 index has been confirmed, where it will be positioned as the fortieth largest component with a weighting of 0.47%. This move will also include the firm in the popular Invesco QQQ Trust ETF.
The defense of MicroStrategy’s strategy to continue buying Bitcoin comes after the firm announced the purchase of an additional 15,350 BTC this Monday. This has brought the company’s total holdings to 439,000 BTC, valued at approximately $46 billion.
The company has been adding Bitcoin to its balance sheet since 2020, often through leveraged buyouts using convertible notes.
MicroStrategy shares rose more than 5% to close at $408.50 on Monday following the announcement of its latest Bitcoin acquisition, Nasdaq data shows. As of this writing, just before the opening bell in New York, MSTR stock is trading just below yesterday’s closing price.
It’s always ‘a good day to buy Bitcoin’
Always “a good day to buy Bitcoin,” Saylor said during the interview, after being asked how long MSTR intends to continue accumulating BTC.
MicroStrategy’s Bitcoin buying strategy focuses on maximizing shareholder returns through strategic financing. The company issues convertible bonds and shares above asset value, generating a 72.4% return on Bitcoin investments (by 2024) without diluting ownership, he argued.
This leverage strategy allows the company to expand its Bitcoin reserves while increasing shareholder value through price appreciation.
However, the strategy is not without risks, particularly during prolonged market downturns.
As Decrypt previously noted, following Sherwood’s analysis of the “real math problem” surrounding MicroStrategy’s moves, this could backfire hard and push the stock below conversion prices on its $4.8 billion in outstanding notes.
In effect, the company’s limited cash reserves of $46.3 million would be forced into Bitcoin sales to meet debt obligations.
Looking ahead, Saylor remains committed to the strategy, stating that “we will just continue to buy at highs forever,” characterizing Bitcoin as “cyber Manhattan,” whose value proposition mirrors that of premium real estate in a financial center. important.
Edited by Stacy Elliott.
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