MicroStrategy CEO Michael Saylor sees $ 100 trillion bitcoin market value

MicroStrategy CEO Michael Saylor told CNBC on Tuesday that he believes bitcoin will continue to appreciate to the point that cryptocurrency will become a “stabilizing influence” for the entire global financial system. He predicted, in a bold appeal, that Bitcoin’s market value would be worth $ 100 trillion someday.

Saylor’s comments on “Squawk Box” came as the price of bitcoin fell more than 10% on Tuesday, falling below $ 50,000 per unit. This drop brought the market value of the world’s largest cryptocurrency below $ 1 trillion, just days after volatile digital asset eclipsed that level for the first time.

However, Bitcoin was still up 60% since the start of the year and more than 360% in the past 12 months.

“There’s a $ 500 trillion money planet and the outer layer is money, then you’ve got stocks, bonds, real estate. There’s $ 10 trillion of gold in there, $ 1 trillion of bitcoin in there. Bitcoin is going to return gold, and that’s going to encompass the entire market cap of gold, ”said Saylor, who has become one of the most prominent bitcoin evangelists since his enterprise software publisher started buying it in August.

“Then it will encompass negative yielding sovereign debt and other currency indices until it reaches $ 100,000 billion. Once it hits $ 10,000 billion, its volatility will be considerably less,” Saylor continued. “As it heads for $ 100,000 billion, you’re going to see growth rates go down, volatility go down, and that’s going to have a stabilizing influence throughout the 21st century financial system.”

In addition to his company’s large bitcoin holdings, Saylor told CNBC he also owns the digital coin in his personal capacity.

Bitcoin has been called ‘digital gold’ by some crypto bulls, and they tout its ability to act as a store of value due to the fact that its total supply is capped at 21 million coins. Currently, there are 18.64 million coins in circulation, according to Coindesk. New bitcoins are coming to the market as a reward for so-called miners, who use powerful computers to verify transactions in the decentralized system.

Saylor laid out his grand vision for bitcoin a day after Treasury Secretary Janet Yellen again raised questions about the digital coin. She said she was worried about its role in “illicit financing” and the energy consumption used to mine bitcoin.

“It’s a highly speculative asset and you know I think people need to be aware that it can be extremely volatile and I’m concerned about the potential losses that investors may take,” added Yellen, also former chairman of the Federal Reserve, in Monday’s New York Times DealBook. conference.

In an interview last week on CNBC, St. Louis Fed Chairman James Bullard said he was not concerned about the potential of bitcoin to change the status of the US dollar as a reserve currency. global.

“I just think for Fed policy it’s going to be a dollar economy as far as the eye can see – a global dollar economy really as far as the eye can see – and whether the price of gold goes up or down, or the price of gold. bitcoin goes up or down, it doesn’t really affect that, ”Bullard said on“ Squawk Box ”.

Saylor said he sees demand for Bitcoin increasing in the years to come, not only from institutions but also from individuals around the world, which would have the effect of driving up its value.

“I think you can expect a billion people to store their value, basically a savings account, on a mobile device within five years and they will want to use something like bitcoin,” a- he asserted, describing it as a “dominant digital currency network”.

Last week, MicroStrategy completed its second convertible debt offering with the goal of using the net proceeds to buy bitcoin. The first debt sale took place at $ 650 million in December. Offer ended Friday generated net proceeds of approximately $ 1.03 billion, with the notes bearing a 0% coupon rate.

MicroStrategy unveiled its first crypto purchase in August, putting existing cash on its balance sheet to acquire nearly 21,500 bitcoins. The company owned nearly 72,000 bitcoins, from a regulatory filing on February 2. At around $ 47,000 in Tuesday’s trading, that stake is worth nearly $ 3.4 billion.

Saylor argued that the company should hold bitcoin as an investment, instead of holding cash or short-term government bonds, as the digital coin will generate much higher returns in the long term. In December, Saylor publicly encouraged Tesla CEO Elon Musk to do just that. A little over a month later, Tesla announced that it had purchased $ 1.5 billion worth of bitcoin.

Some have been skeptical of MicroStrategy’s push towards bitcoin, especially when it comes to issuing debt to fund additional purchases. In a note to clients at the end of January, Citi analyst Tyler Radke called it “aggressive” and “a potential deal breaker for some software investors.”

MicroStrategy’s shares have taken off since the Virginia-based company started acquiring bitcoin, as investors looked for ways to gain exposure to the digital coin. The stock traded around $ 120 in early August before the company’s entry into the crypto space was made public, but began rallying throughout the fall. and in 2021.

MicroStrategy’s stock hit its highest level since the dot-com boom on February 9, reaching $ 1,315 per share. It has fallen sharply in recent days and has fallen more than 20% in Tuesday’s session to less than $ 700 a share. Still, MicroStrategy has nearly doubled since the start of the year and has grown 400% in the past 12 months.

As bitcoin prices have fallen, Tesla shares have also suffered significant losses, up to 20% in the past two sessions. Tesla’s drop on Tuesday returned negative action for 2021. However, Tesla was still up 250% in the past 12 months.

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