At this time, MicroStrategy is among the most vital establishments in cryptocurrency, but it surely didn’t begin out that manner. The corporate, co-founded by Michael Saylor—one of the vital influential figures on this planet of Bitcoin—first made its mark in software program.
Now, nevertheless, it’s finest identified for its aggressive technique of buying Bitcoin for its company reserves, with Saylor turning into a key figurehead for the institutional adoption of the asset.
Right here’s all the pieces else that you must learn about MicroStrategy and its relationship with Bitcoin.
What’s MicroStrategy?
Earlier than it added Bitcoin to its steadiness sheet, MicroStrategy was finest identified for its enterprise intelligence software program options, which have been designed to assist companies extra simply analyze knowledge for improved resolution making.
Based in 1989 by Michael Saylor, MicroStrategy shortly grew to become profitable, going public and buying and selling on the NASDAQ in 1998 as MSTR. However simply two years later, Saylor and two different high executives at MicroStrategy needed to settle a case with the SEC, which alleged that the corporate had “materially overstated revenues and earnings from the gross sales of software program and data companies.”
After a quick spike in its share value in 2000, MSTR traded in a good vary for the subsequent 20 years, solely starting to make a significant transfer upwards on the finish of 2020—the identical yr it introduced its first Bitcoin buy.
MicroStrategy’s Bitcoin treasury reserve
In 2020, MicroStrategy made a groundbreaking transfer: the corporate adopted Bitcoin as its major treasury reserve asset. Involved in regards to the devaluation of the USA greenback and fiat foreign money because of inflation, Saylor spearheaded the corporate’s first buy of $250 million in Bitcoin as a hedge towards financial uncertainty.
“This funding displays our perception that Bitcoin, because the world’s most widely-adopted cryptocurrency, is a reliable retailer of worth and a pretty funding asset with extra long-term appreciation potential than holding money,” he stated on the time.
The corporate’s Bitcoin shopping for technique has advanced over time and shifted to primarily utilizing the sale of convertible notes to boost funds to purchase extra Bitcoin. In different phrases, MicroStrategy makes use of short-term debt raises through convertible notes that enable traders to ultimately money in for MicroStrategy inventory. It then makes use of the funds raised from the sale of the notes to purchase Bitcoin.
This technique has finally been adopted by different publicly traded firms like MARA and Riot Platforms. In December, Saylor likened this technique to the event of Manhattan actual property, telling CNBC that, “Each time Manhattan actual property goes up in worth, they concern extra debt to develop extra actual property.”
As MicroStrategy has develop into ever extra carefully intertwined with Bitcoin, the corporate now refers to itself because the “World’s First and Largest Bitcoin Treasury Firm” through its investor relations web page.
Michael Saylor, Bitcoin bull
Although Michael Saylor is now one of many loudest voices advocating for Bitcoin, he wasn’t all the time a Bitcoin bull.
Simply seven years earlier than his firm adopted the crypto as its foremost reserve asset, Saylor posted on Twitter that “#Bitcoin days are numbered. It looks like only a matter of time earlier than it suffers the identical destiny as on-line playing.”
#Bitcoin is a swarm of cyber hornets serving the goddess of knowledge, feeding on the hearth of fact, exponentially rising ever smarter, sooner, and stronger behind a wall of encrypted vitality.
— Michael Saylor⚡️ (@saylor) September 18, 2020
Since then, Saylor has carried out an entire 180°, claiming Bitcoin is the very best long-term asset to carry whereas committing to “shopping for the highest perpetually,” referring to constantly buying the asset at its peak costs—which MicroStrategy continues to do.
In Saylor’s view, which means he is likely to be shopping for Bitcoin at $13 million, the worth goal he’s established for the asset over the subsequent 21 years as he expects it to take up a bigger proportion of complete world capital.
The case towards MicroStrategy’s Bitcoin reserve
MicroStrategy’s persistent Bitcoin acquisitions through the sale of debt has confronted scrutiny by analysts and media within the area. In November 2024, Robinhood-backed Sherwood Media outlined the “math drawback,” with MSTR being value 3x the quantity of BTC that it holds and the potential of compelled liquidations in a drawdown.
These concepts have seeped into the broader crypto group as nicely, with previously bullish Citron Analysis taking a brief place in November 2024, betting on the share value of MSTR to go down.
Citron’s notes counsel MSTR is “overheated” and now not required to achieve publicity to Bitcoin investments.
If the MSTR share value falls sufficient, MicroStrategy may very well be compelled to promote Bitcoin to repay greater than $4 billion in convertible notes, “successfully reversing its ‘perpetual movement machine’…which might additional lower Bitcoin’s value,” in keeping with Sherwood Media.
The way forward for MicroStrategy
Different firms have adopted MicroStrategy’s Bitcoin reserve technique, together with Japanese agency Metaplanet and Canadian crypto agency Matador Applied sciences.
Whereas MicroStrategy has continued its constant Bitcoin purchases, the agency signaled in October it has no plans on slowing down sooner or later. At the moment, MicroStrategy introduced plans to boost as much as $42 billion so as to add extra of the main cryptocurrency asset to its steadiness sheet.
In search of extra although, the agency handed a vote in January 2025 to implement a 30x improve of its Class A standard shares, permitting it so as to add much more Bitcoin than initially deliberate.
The corporate, which now owns greater than $48 billion value of Bitcoin, is up greater than $17.7 billion on its purchases lifetime in keeping with knowledge from SaylorTracker.
Saylor’s ambitions for MicroStrategy are even grander than including main Bitcoin reserves to the corporate’s steadiness sheet. In October 2024, he outlined his imaginative and prescient for MicroStrategy to evolve right into a “Bitcoin financial institution” with a trillion-dollar valuation, creating capital market devices tied to Bitcoin that may be provided to traders.
Along with including to its personal holdings, Saylor and firm are actually additionally pitching different main publicly traded firms. In December 2024, he advised the Microsoft board they may stand to create $5 trillion in worth by adopting Bitcoin. They voted towards including it to their steadiness sheet…for now.
Editor’s observe: This story was initially revealed on January 8, 2025 and final up to date with new particulars on January 28.
