Michael Saylor, executive chairman of MicroStrategy, believes that large corporations should consider adopting Bitcoin (BTC) as a key part of their treasury management strategy.
In a recent interview on the Markets with Madison podcast, Saylor argued that by investing in Bitcoin instead of buying back shares, companies could significantly increase their market capitalization and protect their reserves against inflation.
Strategic bet
Using Apple as an example, Saylor suggested the tech giant could invest $100 billion in Bitcoin instead of buying back its shares, a move he said could add $1 to $2 trillion to its market cap over time.
According to Saylor:
“If Apple were to buy $100 billion worth of Bitcoin, it would likely grow to $500 billion, and the company would have a $500 billion business growing at 20% per year.”
He further predicted that such a move would cause the tech giant’s valuation to ‘shift’, with 40% of it based on Bitcoin holdings and 60% on its core businesses.
Saylor’s suggestion is rooted in his long-standing belief that Bitcoin is the future of capital markets and a better store of value than traditional cash reserves.
He argued that as companies face inflationary pressures and currency devaluation, Bitcoin offers a more resilient and valuable means of protecting balance sheets. He stated:
“The long-term value of Bitcoin is undeniable.”
Saylor predicted that Bitcoin has the potential to reach $13 million per coin in the next 21 years, and that companies should take advantage of the “capital revolution” it brings.
Bitcoin yield
Saylor has already implemented this strategy at MicroStrategy, which owns 252,220 BTC worth over $16 billion, making it the largest corporate whale in the industry.
The company has issued Bitcoin-backed securities to fund its accumulation strategy, generating a “BTC return” – an innovative financial metric that has led to an 18% increase in Bitcoin per share for its investors this year.
MicroStrategy’s BTC return strategy involves issuing stocks and convertible bonds at a premium and then using the proceeds to buy more Bitcoin. This ensures consistent growth of the company’s Bitcoin holdings and provides shareholders with returns that exceed traditional investment models.
Saylor said:
“In one year, we have generated more value from issuance of Bitcoin-backed securities than we could have in a decade of traditional operations. With the BTC proceeds we can compress time and deliver results faster.”
Saylor believes companies like Apple can open new avenues for growth by taking this approach. By using their cash reserves to accumulate Bitcoin, companies could realize significant profits over time while limiting inflation risks.