3 min read
MicroStrategy Inc. is positioning itself to transform how capital is preserved and transferred globally, according to a recent report by Bernstein Research—and the company’s outspoken co-founder Michael Saylor says the company aims to become a “Bitcoin bank” with a potential trillion-dollar valuation.
Bernstein has rated MicroStrategy as "Outperform," with a price target of $290, reflecting a 39% upside from its current price of $209, according to Google Finance. The report states that MicroStrategy’s significant investment in Bitcoin is the key driver behind this optimistic projection.
MicroStrategy has gained attention for its large-scale Bitcoin acquisition strategy under the guidance of Saylor, the firm’s Executive Chairman and former CEO. Since 2020, the company has accumulated 252,200 Bitcoin, or $15.8 billion worth as of this writing, making it the largest publicly traded corporate holder of the cryptocurrency.
During an event this week hosted by Bernstein, Saylor explained the rationale behind MicroStrategy’s embrace of Bitcoin.
"We saw Bitcoin as a big tech monetary network,” he said, “like Google for money, or Facebook for money.”
MicroStrategy’s broader vision is to evolve into a “Bitcoin bank,” Saylor said, creating capital market instruments tied to Bitcoin that can be offered to investors.
“We are in the core business of creating Bitcoin capital market instruments across equity, convertibles, fixed income, and preferred shares,” Saylor said. This approach aims to give investors exposure to Bitcoin’s price movements while offering various risk-adjusted instruments.
Through its securitization of Bitcoin, MicroStrategy has been able to leverage financial products like convertible bonds and equity to raise capital at low interest rates, and then use that capital to buy more Bitcoin.
“We are recycling capital,” Saylor explained, “investing in something that yields three times the cost of capital.”
Bernstein’s report emphasizes that MicroStrategy’s innovative approach to securitizing Bitcoin has positioned the company as a leader in the space. By creating capital market products backed by Bitcoin, the company provides investors a structured way to benefit from Bitcoin’s performance.
According to the report, MicroStrategy’s strategy gives it a competitive edge in the digital assets ecosystem. The company’s ability to raise capital through debt and equity and reinvest it into Bitcoin has allowed it to capitalize on the growing acceptance of cryptocurrency in traditional financial market.
“We are a misunderstood company,” Saylor added, “akin to a real estate development company, but we’re buying Bitcoin, not real estate.”
Saylor remains so bullish on Bitcoin that he believes each coin will be worth millions of dollars in the future—which is why the firm believes that its current strategy will turn it into a trillion-dollar company, he noted.
MicroStrategy currently has a market cap of about $42.5 billion. Only a handful of companies in the world—including Apple, Microsoft, Amazon, and Nvidia—currently boast a valuation of at least $1 trillion.
Edited by Andrew Hayward
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