- MicroStrategy holds over $8.3B in Bitcoin and offers Bitcoin-backed convertible bonds to mitigate volatility risks for investors.
- Bitcoin has grown 44% annually since 2020, outpacing the S&P 500’s 12%, driving MicroStrategy’s success in the cryptocurrency market.
- Despite Bitcoin’s volatility, MicroStrategy remains committed to its strategy, focusing on long-term growth and innovative financial products.
The executive chairman of MicroStrategy, Michael Saylor, discussed his company’s experience in terms of its Bitcoin-centric business strategy on CNBC. Subsequently and within a timespan beginning on August 20/2020, MicroStrategy has acquired access of $8.3 billion worth of Bitcoin, and increased the company’s stock price by an astonishing 825%. Nvidia being part of the S&P 500 index was able to grow at an incredible 821% in the same period.
MicroStrategy’s Pivot to Bitcoin Investments
While MicroStrategy currently still operates its software business, the company has gradually pivoted towards purchasing Bitcoin. Saylor says that, though the software division is still profitable, most of the money is now spent on Bitcoin.This strategy has drawn the investors’ focus on MicroStrategy stocks, which could increase simultaneously with cryptocurrencies’ development.
There is MicroStrategy’s instrument of Bitcoin-based convertible bonds that allows investors to invest in bitcoins without directly getting exposure to bitcoins, thus avoiding high volatility. Every bond is supported by five times the worth of bitcoin to support the investors in case of any risks.
Bitcoin’s Appeal in Global Markets
Saylor does not doubt that Bitcoin will assume a larger role in global capital markets in the future. He also pointed out that Bitcoin’s year-on-year of 44% is higher than the S&P 500 of 12%. In the following years, Saylor believes that the growth of Bitcoin might slightly decline but it will surpass the performance of traditional assets..
This decentralization is one of the biggest strengths of Bitcoin as it breaks the connection between Bitcoin to the traditional stock markets and currencies.Individuals can possess BTC without being influenced by the actions of governments or even the central banks.
MicroStrategy’s Resilience Despite Volatility
However, MicroStrategy stands tall with its strategy amid Bitcoin price fluctuations. While some will sell when the price drops, strong believers in the cryptocurrency like Saylor will reinvest in the asset. MicroStrategy’s investment strategy is to withstand short-term volatility and concentrate on the appreciation of the asset, which has performed better than other means of business financing.
The success of the company also hinges not only on the increased price of Bitcoin but also on financial services that allow for different types of interactions with Bitcoin. This digital currency is an investment tool that helps investors make increased revenues without the risks of owning actual Bitcoins.
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