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Michael Saylor smells the next Facebook: MicroStrategy CEO expands Bitcoin commitment | 08/13/21




In the spring, the electric car maker Tesla first announced its billion-dollar investment in Bitcoin, but a few months later expressed its concerns about the high power consumption that occurs when mining the cryptocurrency. The entrepreneur Michael Saylor also invested in the coin with his software company MicroStrategy – and is not thinking of selling his holdings.

• Bitcoin has been criticized for its environmental balance and volatility
• MicroStrategy wants to buy more Bitcoin
• Saylor smells “next Facebook”

Criticism of cryptocurrencies is growing – Tesla pulls the emergency brake

Despite the current lower prices, the crypto trend is currently on everyone’s lips, which is also reflected in the fact that large tech companies such as Apple and Amazon are said to soon be entering the largest cryptocurrency Bitcoin. And star investor Cathie Wood also prophesied in the spring the important role that institutional investors should play in the widespread acceptance of the crypto veteran. At the same time, however, the criticism of the negative environmental balance of Bitcoin is also growing louder. For example, the US electric car manufacturer Tesla announced in February that it had made a billion-dollar investment in the crypto veteran Bitcoin and that customers would soon be able to pay for vehicles with the Internet coin. The new payment method was activated in March, but less than two months later the group removed it from its own online shop. “We are concerned about the increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” the CEO read in a statement Elon Musk published on his Twitter profile. Shortly beforehand, the group also sold some of the bitcoins it had only bought in the spring.

MicroStrategy boss expands Bitcoin exposure

In addition to the high power consumption, the volatility of cyber coins is also a frequent point of criticism. MicroStrategy CEO Michael Saylor had to experience firsthand that a rapid drop in the price of the cyber currency can be problematic for companies. With 105,085 Bitcoins, the software group holds the most units of the cryptocurrency among all listed companies, as reported by Financial Express. The provider of business intelligence solutions has only been investing in the crypto business since last year: In August 2020, MicroStrategy bought 21,454 Bitcoins for the first time at a total price of 250 million US dollars including fees and expenses and then kept adding up. And despite impairments, which totaled $ 424.8 million in the second quarter of 2021 and totaled $ 689.6 million, and are due to falling prices of the coin, the company now wants to further expand its BTC exposure. “We are still very satisfied with the results of the implementation of our strategy for digital assets”, quoted the portal CEO Saylor. “Our recent capital increase enabled us to expand our digital holdings, which now exceed 105,000 bitcoins. We intend to continue investing additional capital in our digital asset strategy in the future.”




Bitcoin “next big tech digital network”

Compared to “CNBC” the managing director of the IT company justified the debt-financed purchases. “We have $ 2.2 billion in debt and we pay about 1.5 percent interest and we have a very long time horizon,” said Saylor on the television program “Squawk on the Street.” “We believe it is good for our shareholders to be a leveraged company that has invested in Bitcoin for a long time.” So it is no problem as a company to borrow billions at a low interest rate when it comes to investing in the “next digital big-tech network”. “I mean if I borrowed $ 1 billion a decade ago and Facebook[-Aktien] could buy for one percent interest, I would have done pretty well. “For example, papers from the social network were listed on the NASDAQ for the first time in 2012 and started trading at a value of 42.05 US dollars. Most recently, Facebook shares were listed at 359, It traded US $ 96 (closing price on August 11, 2021). Bitcoin is thus another entry on the list of successful tech innovations, which in addition to Facebook also includes Google, Apple and Amazon. “We are of the opinion that there is only one It is a matter of time before billions and billions of people have cell phones connected to Bitcoin and we just want to be there first, “said the MicroStrategy CEO.

Power consumption increases the security of the network

In the CNBC interview, Saylor did not address the high energy consumption that arises when mining Bitcoins, but the Bitcoin Mining Council (BMC), which was founded in June under the leadership of the entrepreneur, does not see the high power consumption as a problem. As Markets Insider writes, the association is of the opinion that the high energy balance ensures the security of the network, which is why it is not a fault, but a function. In the run-up to the establishment of the BMC, Saylor stated at the online conference “Consensus” organized by CoinDesk that he would work with the association to counter the criticism of the high power consumption of Bitcoin & Co. and to dispel corresponding concerns. This is to be done, for example, by publishing data on the mining process of cryptocurrencies.

Bitcoin purchase supports MicroStrategy’s core business

And despite the depreciation that Bitcoin caused on the company’s balance sheet, the coin helped MicroStrategy’s core business to grow significantly, as Saylor told CNBC. In the second quarter of 2021, the software company reported an increase in sales of 13.4 percent to 125.4 million US dollars, which is six percent more than in the second quarter of 2019, when the coronavirus did not keep the world in suspense. The multi-million dollar Bitcoin purchase did not damage the company’s reputation in any way – on the contrary. “It’s a door opener,” said Saylor, enthusiastic about the company’s Bitcoin commitment. “It’s very important that people know who you are. That’s where the conversation starts. It’s been great for our enterprise software business and it’s also been great for employee morale.”

Similar to Musk, Sayor mainly shares memes and quotes on his Twitter profile that have Bitcoin on the topic. In December 2020, before Tesla announced its Bitcoin entry, Saylor Musk called there to convert his company’s balance sheet from US dollars to Bitcoin.

Finanzen.at editors


Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.
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