Having been a declared Bitcoin doubter up until 2020, Michael Saylor, CEO of MicroStrategy made a dramatic u-turn and has now become one of its biggest cheerleaders, putting his company’s money where his mouth is to the tune of $1.5bn. Find out what Saylor’s ‘aha’ moment was, and how’s he become Bitcoin’s biggest convert.
On December 21, 2020, Saylor's company MicroStrategy committed their cash reserves to Bitcoin. They publicly announced their total holdings included 70,470 bitcoins purchased for $1.125 billion at an average price of $15,964 per bitcoin. He has since followed up with further purchases, taking the total to $1.5bn, but he isn’t stopping there, raising commercial debt to finance yet more purchasing.
With Bitcoin recently hitting its all-time high of $48,226.25, it's an understatement to say that Saylor's investment has paid off.
How much Michael Saylor has invested in Bitcoin via MicroStrategy the company he runs
Saylor has become evangelical about Bitcoin. His Twitter feed reads like a sermon on the benefits of investing in the cryptocurrency. In February 2021 MicroStrategy held a conference titled "Bitcoin for Corporations" encouraging institutional investment and attended by representatives of Elon Musk.
So what is Michael Saylor's story? How and why he has become so influential in crypto and assess his critics' validity. Could Saylor be the prophet to finally deliver institutional investment to the world of crypto or is his evangelism simply intended to pump the price and make a killing?
An MIT graduate, Saylor is certainly no fool. His career began in software consulting before establishing his own firm MicroStrategy in the 90s to help companies use their own data to improve operations.
Saylor controls 70% of the company shares with an estimated net worth of around $500 million - though his recent Bitcoin investments have grown that significantly. He personally owns 18,000 Bitcoin.
Before 2020, Saylor publicly admitted that he didn't believe in Bitcoin, likening it to online gambling But as he looked for ways to protect his company’s cash reserves from inflation and how other companies were turning to Bitcoin, he began to change his mind.
2020 brought the COVID-19 pandemic, exacerbating this inflationary headache, given the massive money printing by the federal level in the US to stop the economy from grinding to a halt.
Quantitative easing has been artificially pumping credit into the financial system since the crisis of 2008, but the level of stimulus in 2020 took this to a whole other level with monetary expansion jumping to around 20%. This led Saylor to re-examine his position on Bitcoin as an asset jumping head first into the Bitcoin rabbit-hole consuming a whole range of literature from the Whitepaper to Saifdean Ammous’ ‘Bitcoin Standard’
Saylor emerged from his educational odyssey a complete convert, convinced that Bitcoin was the solution to protecting his company’s cash stockpile from inflationary erosion.
In July of 2020, Saylor used a MicroStrategy quarterly earnings conference call to signal an intention to explore alternative assets such as Gold and Bitcoin to invest cash holdings.
A month later, MicroStrategy spent $250 million purchasing 21,454 Bitcoin. This was the moment that Saylor entered the world of crypto, but was the warning shot in a blitz of buying.
Since then, MicroStrategy has spent nearly $1 billion more on buying Bitcoin and Saylor's media output has been taken over by his bullish position on the cryptocurrency.
This - for an example of his fervent enthusiasm - is his pinned tweet:
Other highlights include:
If Saylor is just attempting a monumental pump and dump, financed by his companies cash treasure chest, it is in plain sight, and if his evangelism is all an act, it is worthy of an Oscar.
He has committed to holding Bitcoin for the long term - talking about a 100 year horizon = and already has a website dedicated to education, with Bitcoin becoming a big part of that. .
Saylor seems to truly believe that Bitcoin offers a viable digital alternative to gold. And because of this, it's the ultimate store of value for the 21st century.
An analogy that Saylor likes to make is that holding Bitcoin is like owning a Manhattan block in cyberspace. Its value isn't attached to fiat currencies and it's a secure, long-duration asset.
Among his many podcast and TV appearances he has provided anecdotes that suggest his intentions and concerns are genuine. He recalled the issue faced repatriating profits from a division in Argentina. Unable to simply send USD he was watching the Pesos slowly devalue. He became so desperate he even considered using the money to buy an expensive yacht and sail it to America.
Due to currency controls, Saylor struggled to repatriate profits from a division in Argentina, where the Peso was continually declining in value. He became so desperate he even considered using the money to buy an expensive yacht and sail it to America.
The recent MicroStrategy conference on Bitcoin is also an indication that Saylor is here to stay. Representatives from Goldman Sachs, Amazon, Tesla and many more were in attendance with the conference to convince corporations to add Bitcoin to their portfolio.
Institutional investment in bitcoin has long been held as the key to "de-risking" the currency and delivering long-term stability to crypto. Since the conference, Elon Musk has announced that Tesla has added $1.5 billion worth of Bitcoin to their portfolio. Could other institutions be about to follow? Saylor certainly believes so.
But what about his critics? Saylor has had trouble with the SEC in the past for inaccurate reporting of financial results and was ordered to pay hefty fines as a result. Furthermore, Saylor has faced criticism for speaking out against Covid-19 restrictions in early 2020.
In the world of crypto, many of his critics claim that his Bitcoin evangelism is simply a method of boosting the price. Whilst this may be partly true, it can't be said that Saylor hasn't put his money where his mouth is. It's also undeniable that his Microstrategy team has done their due diligence to understand Bitcoin's value as a long-term asset.
Saylor isn't perfect. He's a maverick who takes risks and thinks for himself. Because of this, he has become one of the most effective communicators in crypto. Saylor has a proven track record of success in technology since the early 90s and is becoming increasingly difficult to ignore. He understands the culture of enthusiasm that surrounds Bitcoin and has emerged as a community leader.
That leadership quality came to the fore as, seeing the damage to Bitcoin's image from the negative perception of its fossil fuel consumption, he took the initiative of forming the Bitcoin Mining Council. A coalition of North American miners keen to promote a positive message around sustainable mining.
If Bitcoin is to attract the holy grail of institutional investment, the community needs people like Saylor. People with proven track records of success that are trusted by the traditional investment world and also know how to communicate with the fast-paced, madcap world of crypto.