In March 2020, amidst the global chaos and market turbulence, Michael Saylor experienced a financial epiphany that would redefine his destiny and the trajectory of MicroStrategy. With the precision of a master chess player, Saylor made a move that was both bold and unconventional — he decided to invest heavily in Bitcoin.
This wasn’t just a casual dip into the world of cryptocurrency. No, it was a monumental shift, a full-scale immersion into Bitcoin as a legitimate, if not superior, reserve asset. At a time when most were skeptical and the broader market was shrouded in uncertainty, Saylor saw a beacon of opportunity in Bitcoin. He recognized its potential not just as a digital currency, but as a digital form of gold that could offer a hedge against inflation and a new foundation for the future of finance.
This pivotal moment wasn’t about following trends. It was about breaking away from the conventional, from the safety of traditional investments, and traditional thinking, and betting on the future — a future where Bitcoin sits at the heart of financial strategy. This bold decision wasn’t just an investment choice; it was a declaration of faith in the transformative power of Bitcoin.
As Michael Saylor stood at the financial helm in early 2020, the world around him was in the grip of an unprecedented economic storm. The markets were reeling from the effects of a global pandemic, and the traditional safe havens of investments seemed less secure. Interest rates were hitting rock bottom, and governments worldwide were unleashing massive stimulus packages, raising fears of inflation and currency devaluation. It was a time of uncertainty, a time when the conventional wisdom of finance was being challenged on all fronts.
In this chaotic landscape, Saylor’s decision to pivot towards Bitcoin was not a mere gamble but a calculated strategy. He envisioned Bitcoin not just as a digital asset but as the cornerstone of a new monetary era. With its fixed supply and decentralized nature, Bitcoin presented a stark contrast to the inflating fiat currencies. Saylor saw in Bitcoin the potential to serve as digital gold, a new-age store of value that could withstand the economic fluctuations and preserve wealth amidst the monetary dilution. His strategic move was underpinned by a vision that saw beyond the immediate crises, anticipating a future where Bitcoin could anchor the balance sheets of forward-thinking companies looking to shield themselves from currency risks and inflationary pressures.
Saylor’s decision has certainly been controversial to believers in traditional finance. The simplest and most effective way that I can think of describing it is through the following analogy. Imagine a close friend reveals to you their latest business venture, one that skirts the edges of imagination and sanity — They plan to go all-in this unproven, audacious venture with the proceeds from their existing business, currently valued at a hefty $1.2 billion market cap. You might be incredulous, perhaps even aghast, but there’s more. The sole purchase they intend to make with this “volatile” currency? Bitcoin.
Now, take a moment to process this. If you were in this position, what would be your reaction? Would you jump at the opportunity to be part of this bold, almost heretical venture, or would you attempt to dissuade your friend from pursuing what appears to be a visionary yet potentially perilous path? Would your opinion of this plan change if your friend’s company exploded from a $1.2 billion market cap to an $89 billion market cap in four and a half years?
This, in essence, is the daring strategy Michael Saylor has embarked upon. By pivoting his company’s focus to Bitcoin, Saylor is not just investing in the top cryptocurrency. He is fundamentally restructuring his company around it, creating and securitizing new financial products that integrate deeply within the traditional financial and Bitcoin ecosystem. This move isn’t just about adopting Bitcoin as an asset; it’s about innovating the very fabric of financial instruments to accommodate and leverage Bitcoin’s unique properties.
The following graphic tells a very compelling story of how consistent Saylor has been in placing bitcoin on his balance sheet over the last 4 ½ years.
What’s particularly noteworthy — and perhaps a testament to Saylor’s strategic acumen — is the reception these financial products have received. Pension funds, insurance companies, and traditionally risk-averse investors, all too familiar with the volatility and uncertainties of U.S. Treasury debts, are not just observing but actively applauding Saylor’s initiatives. This approval marks a significant shift in how conservative financial entities perceive the risk and potential of Bitcoin-centric financial products.
If you’re a trader, investor, or finance student, you absolutely must head over to YouTube and watch the October 30th MicroStrategy ($MSTR) earnings call. This call isn’t just an update; it’s a masterclass in the future of financial securitization. During this session, Michael Saylor dives deep into $MSTR’s strategy, detailing how they issued six substantial convertible bond offerings with yields ranging from a staggering 41% to an unprecedented 224% — numbers that are nearly unheard of, especially when compared to the then-current US Treasury yields of 4.6%. These metrics are not just impressive; they represent a successful proof of concept that has major financial players like pension funds, family offices, and insurance companies eagerly lining up at $MSTR’s door. The insights from this call are crucial; they encapsulate a seismic shift in how financial products are structured and promise to shape the investment landscape for years to come.
In crafting such a radical strategy, Saylor has arguably transformed risk into opportunity, positioning Bitcoin not merely as a digital asset but as a central pillar capable of supporting a range of financial innovations. The question for the rest of us, then, is whether we see this as the future of finance or a high-stakes gamble in a digital frontier. For those entrenched in traditional investment paradigms, Saylor’s approach might seem like a departure from fiscal prudence. Yet, for the visionaries and the bold, it represents a pioneering move towards a new financial normal, where digital assets like Bitcoin don’t just supplement but spearhead financial strategy and innovation.
What is genuinely remarkable about the impressive returns that Saylor has been generating in the Convertible Debt market is that this has been occurring while sovereign debt obligations have been highly toxic. The graphic below shows the unrealized losses on bank portfolios balance sheets over the past several years. Observe how these financial institutions are in much more of an unhealthy state than they were in 2008.
Michael Saylor, a master of financial innovation, has crafted a clever strategy that neatly sidesteps the traditional hesitations conservative financial institutions have about diving into the volatile world of Bitcoin. Understanding that these institutions are often bound by stringent regulations that prevent direct investment in assets like Bitcoin, Saylor has carved a new path. Instead of challenging these established norms head-on, he’s turning the game on its head by creating investment opportunities that these institutions can embrace.
Here’s the genius of Saylor’s approach: he’s offering convertible bonds through MicroStrategy ($MSTR) that come with a twist tailor-made for the cautious investor. These aren’t your garden-variety bonds; they come with a safety net. The principal investment is guaranteed, creating a secure baseline that’s music to the ears of risk-averse investors. But that’s just the beginning. While the downside is neatly capped, preserving the initial investment, the potential for upside is not just substantial — it’s titanic. These bonds are designed to convert into equity should the value of $MSTR (and inherently Bitcoin) skyrocket, offering a taste of the high-reward game typically reserved for the bold and the agile.
This strategy is nothing short of revolutionary. Saylor isn’t just selling bonds; he’s selling a bridge between the old guard of financial conservatism and the new world of digital currency investments. By repackaging Bitcoin’s explosive potential into a format that traditionalists can buy into without stepping outside their comfort zones, Saylor is expanding the financial ecosystem. He’s not just opening doors; he’s building whole new gateways. This approach could very well redefine institutional participation in cryptocurrency, broadening the investor base and enhancing the stability of Bitcoin as a mainstream asset. This isn’t just financial engineering; it’s financial artistry.
This dissonance from Wall Street professionals is what is fascinating to observe. For the most part Wall Street is asleep at the wheel, incapable and unwilling to confront a new paradigm of finance. Here is a graphic of $MSTR’s revenue and earnings over the last 5 years. Clearly these numbers are less than impressive. If anything, if you look only at these numbers you would have to conclude that $MSTR was not a healthy company. Only recently have you seen earnings improve.
The reality behind those numbers is that they reflect the business intelligence unit of $MSTR which was the backbone of the old $MSTR company. The only reason the business intelligence unit exists today is to create cash flow for the new Bitcoin Treasury division which is at the forefront of financial engineering and the acquisition of bitcoin. This is essential for anyone to comprehend about the transformation that has occurred at $MSTR.
This is quite paradoxical because any brokerage platform will scan $MSTR metrics and automatically assign it an “F” rating. The one public company that owns over 4% of the Bitcoin that will ever be created is being judged by traditional finance valuations which are neither relevant nor appropriate.
Before December 2024, under the Financial Accounting Standards Board (FASB) guidelines, Bitcoin was classified as an “indefinite-lived intangible asset” for accounting purposes. This meant that companies had to initially record Bitcoin at its purchase price and subsequently test it annually for impairment. Any decrease in its market value below this recorded value could lead to impairment charges, though gains in value could not be reported until the asset was sold. However, in December 2024, the FASB changed its rules to allow Bitcoin and other cryptocurrencies to be treated as financial instruments.
This significant shift means companies can now mark their cryptocurrency assets to market values in their financial statements, allowing for the recognition of both gains and losses in value throughout the holding period, thus providing a more real-time reflection of their financial health. This change in accounting rules is massive for companies like $MSTR who currently own 450,000 bitcoin at an average price of $62,691 per bitcoin.
Michael Saylor’s strategic foray into Bitcoin through MicroStrategy is reminiscent of the pioneering financial engineers who introduced Exchange-Traded Funds (ETFs) to the world. While the products differ, the essence of their innovation within the financial landscape is strikingly similar. Saylor, much like the creators of ETFs, is leveraging financial engineering to create new pathways for investment and management of assets. However, where ETFs provided a new way to access diversified portfolios across various asset classes with the convenience of trading a stock, Saylor is architecting a bold framework that integrates Bitcoin into the traditional corporate finance structure through securitized debt obligations.
To truly understand the impact and intricacies of Saylor’s approach, one must first grasp the current macroeconomic climate and the evolving nature of money itself. With central banks globally expanding monetary bases, the question of Bitcoin as a potential global reserve currency is more pertinent than ever. Just as ETFs changed investment in equities and bonds by making them accessible through a single stock-like product, Saylor is positioning Bitcoin — a decentralized, finite digital asset — as a cornerstone in modern financial strategy against the backdrop of potential currency devaluation and inflation.
Moreover, Saylor’s strategy requires a comprehensive understanding of the entire financial ecosystem, including stocks, bonds, interest rates, and even niche sectors like insurance and real estate. Each market has its nuances and rules, and navigating this requires not just a foundational knowledge but a masterful command of financial principles and quantitative methods. The same deep dive into economic dynamics, market interaction, and capital flow management that was crucial for the successful launch and adoption of ETFs is vital in understanding and leveraging Bitcoin within corporate finance.
Additionally, the intricacies of options trading, the subtleties of market maker strategies, and the complexities of modern portfolio theory are all part of the toolkit needed to innovate in today’s financial markets, whether you’re designing an ETF or restructuring a company’s assets around Bitcoin. Understanding these elements allows Saylor to not only anticipate but also influence how digital capital reshapes financial strategies.
Saylor’s approach is not for the faint of heart; it is as challenging as it is groundbreaking. Critics may be quick to dismiss MicroStrategy’s Bitcoin-centric strategy as overly risky or liken it to a financial scheme due to its unconventional nature. However, such criticism often stems from a lack of understanding of the depth and scope of knowledge required to implement such a strategy effectively. Through his actions, Saylor is demonstrating how digital assets can be intertwined with traditional financial instruments to not only preserve but also enhance corporate value in a rapidly changing economic landscape. This is a clear signal that the financial engineering which brought about innovations like ETFs is evolving into even more sophisticated territories with the integration of digital assets like Bitcoin.
More importantly, even critics who refer to $MSTR as tulip bulbs, or a ‘ponzi scheme’ are forced to evaluate the stocks impressive performance since the company began putting bitcoin on its balance sheet in August of 2020.
My observation is that what Michael Saylor is doing with $MSTR is akin to what John D. Rockefeller did with Standard Oil. Listen up, because the story of crude oil is the story of modern civilization, and nobody understood this better than the kingpin himself, John D. Rockefeller. This guy wasn’t just playing the game; he was setting the rules, turning crude oil into the golden juice of the 20th century. Think about it — everything from your car zipping down the freeway to jets streaking across the sky, it all runs on the stuff pulled from deep beneath the earth.
And it doesn’t stop at transportation. We’re talking plastics in everything, from your kitchen gadgets to the very keys on your laptop. Pharmaceuticals? Yep, those too come from oil. Without it, medical breakthroughs would crawl at a snail’s pace. And let’s not forget about the roads — smooth, durable asphalt that turned dusty trails into highways that bind cities and states. Plus, the rise of synthetic fabrics like polyester changed fashion forever, making clothes cheaper and more accessible.
Agriculture got a boost too, with fertilizers and pesticides cranking up food production to levels previously dreamed of only in fantasy. Even your morning routine is touched by oil — shampoos and lotions, you name it. And let’s not skate past the role of oil in the big, bold endeavor of space exploration. Rockets shooting into the cosmos? Fueled by refined petroleum products.
John D. Rockefeller saw all this coming. He didn’t just find a resource; he saw the future — a world utterly dependent on oil. With Standard Oil, he didn’t just build a company; he built an empire that tapped into every vein of industry and innovation. His strategy was ruthless, brilliant, setting up shop in every corner of the market, squeezing out competition, and making sure he was the guy everyone needed to go through for their slice of the black gold. Rockefeller didn’t just ride the wave of industrialization; he was the wave, crashing forward, reshaping economies, lives, and the very landscape around him. And that, my friends, is how you turn oil into gold.
Michael Saylor, much like John D. Rockefeller, stands at the precipice of monumental financial innovation. Saylor’s visionary approach to securitizing the Bitcoin ecosystem with a finite and historically unparalleled asset echoes the audacious spirit of Rockefeller’s domination with Standard Oil. Just as Rockefeller harnessed the untapped potential of crude oil, transforming it into the cornerstone of myriad industries and everyday life, Saylor is steering MicroStrategy ($MSTR) to potentially reshape vast sectors such as preferred stocks, corporate debt, commercial lending, real estate, and mortgage-backed securities.
The ambition here is staggering; Saylor isn’t just participating in markets — he’s redefining them.
With Bitcoin as the bedrock, $MSTR is poised to grow into a powerhouse reminiscent of Standard Oil’s dominance in its golden age. The speculative future of $MSTR could very well mirror that of Standard Oil, becoming a pivotal force in financial markets, driving new standards and practices in how assets are structured and traded.
Adding to this seismic shift, $MSTR’s recent admission into the NASDAQ Composite Index in December 2024 marks a historic moment for both the company and the broader Bitcoin community. This inclusion is not merely a nod to MicroStrategy’s growth or its commitment to Bitcoin but a strategic placement that ties $MSTR’s fortunes to the daily trading of NASDAQ-based ETFs. Every purchase of a NASDAQ ETF now indirectly supports Bitcoin, embedding it further into the fabric of mainstream financial markets. This development is a game-changer, signaling a new era of legitimacy and integration for Bitcoin within the global investment arena, much like the petroleum-based products of Standard Oil found their way into almost every aspect of industrialized societies.
Here is a 10-year chart of how successful the $MSTR strategy has been. You simply need to focus on the last 4 years.
Hold onto your seats, because Michael Saylor is rewriting the rulebook on what we thought we knew about money, banking, and the digital gold rush known as Bitcoin. The man is a financial magician, pulling convertible debt out of his hat — yeah, that’s Wall Street speak for loans that morph into company stock. But Saylor’s not buying beachfront property or flashy yachts; no, he’s gobbling up Bitcoin faster than a kid with a bag of Halloween candy. And here’s the kicker: this isn’t your grandpa’s dollar bills being passed around. This is fresh, minted-out-of-thin-air, brand-new fiat currency — the kind you usually fold and stuff in your wallet — now chasing after Bitcoin like it’s the last chopper out of Saigon.
Let’s crack open the playbook, shall we? Most folks don’t have a clue how the money machine works. Flashback to 2020, when the Fed bigwigs decided to cut banks loose, scrapping those dusty old rules that kept a tight leash on cash reserves. The idea? Let the banks run wild and free, especially when the pandemic sucker-punched the economy. Now, banks don’t have to stash cash unless they feel like it. They can lend to their heart’s content, creating money with a few keystrokes.
Here’s where it gets juicy: Imagine you’re after a swanky million-dollar mansion. You swagger into the bank, slap down $100,000, and demand a $900,000 loan. Does the bank have that dough? Who cares! They hit a few buttons, and bam, there’s your money. It’s like magic — money conjured from nowhere. And that’s the banking world’s open secret — they make money appear and disappear like a Vegas magic show.
This same smoke and mirrors are now in the big leagues with Bitcoin. Instead of nibbling around the edges of traditional assets, Saylor’s playbook involves creating new credit to scoop up Bitcoin directly. We’re talking about the creation of entirely new fiat money to flood into Bitcoin markets. And this isn’t some pie-in-the-sky, high-risk punt; this is the main event, the marquee show that’s been outperforming every asset class on the planet for over a decade.
So, brace yourselves. We’re not just on a ride; we’re strapped into a rocket ship headed for a new financial frontier with $MSTR at the helm, blasting through old financial norms and shooting straight into the heart of hyperbitcoinization. This isn’t just a game changer; it’s the game ender. As the financial world holds its breath, keep your eyes wide open. We’re witnessing a revolution, and you’re going to want a front-row seat.
In 2025, Bitcoin could be setting up for a monumental surge, and here’s why: First, imagine countries starting to stockpile Bitcoin the way they hoard gold. The mere whisper of nations adding Bitcoin to their reserves could send its value skyrocketing. Then, let’s not overlook the big boys — financial behemoths and tech giants — continuing to pad their balance sheets with Bitcoin, making every CFO’s eyebrow raise in interest. And here comes the kicker: regulatory clarity. If governments, especially from the major leagues like the USA and EU, start to clear the fog around Bitcoin’s legal status, you bet your bottom dollar we’ll see an influx of new investors sprinting towards crypto. Technological tweaks that bolster Bitcoin’s security and efficiency are just the cherry on top, making it an even tastier pick for tech-savvy investors. As Bitcoin begins to be treated just like money its tax status will probably change.
But the real juice? It’s inflation — this silent thief could push wary investors towards Bitcoin as a shiny hedge when traditional money starts to stutter. Plus, let’s not forget new financial toys on the block, like Bitcoin ETFs, which could funnel streams of institutional money into the market. That’s mainstream adoption right there, boosting demand through the roof. Lastly, as our world embraces digital solutions at warp speed, the shift towards digital currencies looks inevitable. In a nutshell, if you’re betting on Bitcoin, these factors might just be your winning hand. And $MSTR stands at the center of these gigantic changes.
The skeptics abound. Most of the traditional finance community despises bitcoin and lacks the desire to learn more about it. For this reason, they will remain permabears.
Let me tell you something that’ll knock your socks off about this Michael Saylor character and his little money-printing machine over at MicroStrategy ($MSTR).
What we’ve got here is perhaps the most brilliant financial engineering feat I’ve seen in my decades of watching markets. And buddy, people are eating it up.
Here’s the beautiful part (and it’s completely legal, which makes it even more impressive):
Saylor convinced Wall Street suits to hand him BILLIONS at 0% interest through convertible bonds. Zero. Nada. Zilch. In this high-rate environment! While your grandmother’s CD is finally paying 5%, these sophisticated investors are saying, “Here, Mike, take our money for free!”
The magic? These bonds are basically a golden ticket to participate in what could be the greatest monetary revolution of our time.
You see, if Bitcoin goes higher, these convertible bonds transform into MSTR shares at a preset price. It’s like getting a call option on Bitcoin with extra steps, backed by a real company’s assets.
And Saylor, with the confidence of a man who’s seen the future, takes this free money and buys more Bitcoin. The market loves it. The investors love it. Everyone’s happy.
Now, I know what you’re thinking: “How is this even possible?”
Well, dear reader, sometimes the most profound innovations look obvious in hindsight. Like the time someone decided to put wheels on luggage. Or when someone figured out you could sell water in bottles. Michael Saylor is financial-engineering using the top performing asset of the last 16 years.
Wall Street’s smartest minds are literally fighting each other to participate in this financial innovation. They’re not just investing – they’re voting with billions of dollars on a vision of the future.
I want to share something fascinating with you about money. Something that’s been quietly transforming our financial landscape since 2008, yet few people truly understand its implications.
What I’m about to reveal might challenge everything you thought you knew about how our monetary system works. And if you’re interested in protecting and growing your wealth, you’ll want to read every word of this letter carefully.
Here’s why:
Since the Great Financial Crisis, we’ve witnessed an unprecedented experiment in monetary policy. But unlike laboratory experiments that stay contained in test tubes, this one affects every dollar in your pocket, every investment in your portfolio, and every financial decision you make.
Let me explain…
In 2024, the Federal Reserve made a bold move: they cut interest rates by 100 basis points. Conventional wisdom would suggest this should have sent stocks soaring. Instead, something remarkable happened – the market recorded its largest drop since 2020.
This wasn’t just any market correction. It was a signal. A signal that something fundamental has changed in how markets respond to Federal Reserve actions.
Think about that for a moment.
It’s as if the old rulebook has been thrown out the window. The traditional relationship between interest rates and market behavior – a cornerstone of investment strategy for decades – appears to be breaking down.
But here’s where it gets really interesting…
The artificial intelligence algorithms – arguably the most sophisticated pattern recognition tools ever created – saw this coming. While human analysts were still debating the implications of Fed policy, these A.I. systems were already detecting subtle shifts in market dynamics.
What does this mean for you?
It means we’re entering a new era of market behavior, where the old rules of thumb may no longer apply. An era where understanding these new patterns could be the difference between financial success and failure.
But here’s the good news:
Unlike previous market shifts, we now have tools that can help us navigate these uncharted waters. The same A.I. systems that predicted recent market movements are available to help guide investment decisions.
Think of it as having a financial weather radar, capable of detecting storm systems before they appear on the horizon.
The key question is: Are you prepared for this new financial reality?
If you’d like to learn more about how to position yourself in this changing environment, I invite you to our next live online MasterClass, where you’ll learn specific strategies for protecting and growing your wealth in these unprecedented times.
Remember, the biggest opportunities often emerge during periods of fundamental change. The key is recognizing these shifts early and positioning yourself accordingly.
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It’s not magic.
It’s machine learning.
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