Microstrategy Proceeding to Buy More Crypto: Unusual or Smart Move?

“MicroStrategy is the only Bitcoin spot exchange fund in the United States.” This was a statement MicroStrategy CEO Michael Saylor made at the Bitcoin 2022 conference in Miami.

He also stated that “we are comparable to our nonexistent spot ETF.” The SEC approved ETFs that track futures contracts. However, they haven’t authorized the use of digital currency.  

This allows investors to invest in Bitcoin without signing up on an exchange, creating a cryptocurrency wallet, or handling complications associated with Bitcoin.

“If a spot ETF existed, its fee ratio would be 1%, and it would not employ leverage. “We use MicroStrategy to convert cash flows of software companies into Bitcoin.” 

Saylor indicates that the tax-free profit of the MicroStrategy Bitcoin spot ETF is between 4% and 5%. Saylor founded MicroStrategy in 1989, and they have been adding Bitcoin to their balance sheet for the past two years. 

The company has spent close to $4 billion on Bitcoin, which costs an average of $30,700 per unit.

MicroStrategy added Bitcoin to its balance sheet in August 2020, which wasn’t so popular then. The coin was worth around $11,000 at the time. 

Institutional investors and Wall Street companies were sceptical of digital assets at the time. However, they later thought Saylor’s made a wise decision. 

The price of Bitcoin increased dramatically in October 2020. This made fund managers like Stanley Druckenmiller begin to purchase Bitcoin. MassMutual’s insurance company invested hundreds of millions of dollars into Bitcoin.

MicroStrategy’s CEO is famous for the fact that he lost $6 billion in a day during the dot-com bubble when his software company almost went bankrupt. 

Saylor is at the center of a heated debate twenty years later because he was the first to use Bitcoin. He has spent most of MicroStrategy’s money and the majority of its debt to buy over 100,000 Bitcoins, which are currently worth billions of dollars. 

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