Bitcoin Offers A Strategy to Preserve Capital: MicroStrategy CEO

• According to Michael Saylor, Bitcoin offers an innovative strategy to preserve capital.
• Saylor thinks corporations can leverage their balance sheets using Bitcoin.
• Bitcoin provides an escape from the destructive cycle of expensive acquisitions, buy-backs, dividends, and debt.

According to Michael Saylor, CEO of MicroStrategy, Bitcoin offers corporations an innovative strategy to preserve their capital and create shareholder value. He noted that the corporations can do so by leveraging their balance sheets with BTC and providing an escape from the destructive cycle of expensive acquisitions, buy-backs, dividends, and debt.

Saylor made the statement in a recent post on X (formerly Twitter), where he shared a clip of a discussion on the CNBC show, Squawk On The Street. During the show, Saylor stated that the developing crypto regulation would open the doors for corporations to adopt Bitcoin as a treasury asset in the long term. He thinks it would also enable them to create shareholder value with their balance sheets.

The MicroStrategy CEO said that the big dilemma in the market today is that there is the “Magnificent Seven.” According to him, those are seven companies that are generating all the shareholder returns, and seven thousand others are struggling to create shareholder value.

According to the renowned investor, MicroStrategy’s secret is that they are leveraging their balance sheet, as well as their profit and loss (PnL). He noted that his company has more than $5 billion of assets on its balance sheet, and Bitcoin is growing at three or four times the cost of capital.

Saylor envisaged a situation where other companies could use their balance sheets as assets instead of liabilities. He noted that the existing accounting system favors using credit and sovereign debt, and the after-tax yield of credit is not keeping up with the cost of capital. 

In Saylor’s opinion, that system would result in most corporations pursuing deluded strategies of acquisition, share buy-backs, and taxable dividends, making them unable to hold large capital and beat the cost accountable on general shareholder return.