• Apple, Google, Facebook and Amazon would benefit from implementing bitcoin into their mobile apps, MicroStrategy CEO Michael Saylor says
  • Firm, which bought nearly 14,000 bitcoins in Q2, will continue buying the asset while steering clear of investments in Ethereum, DeFi

MicroStrategy CEO Michael Saylor said during the firm’s July 29 earnings call that his company will continue to buy and hold bitcoin, a digital property that he noted is “the most compelling technical opportunity of the decade.”

The Virginia-based software company has come to be known as one of the strongest advocates for bitcoin, due in part by how much of the asset it owns. 

MicroStrategy bought 13,759 bitcoins during the second quarter for an average price of $38,467, President and CFO Phong Le, reported. The company ended the quarter with 105,085 total bitcoins held at an average price of $26,080. 

Saylor said that the company’s plan is to continue to acquire and hold bitcoin, and plans to focus on educating corporations, institutional investors, regulators and the general public on the benefits of digital property. 

A CFO search is under way to allow Le to focus on his role as president, and the new executive’s responsibilities will include leading the effort to buy more of the cryptocurrency.   

“There will never be more than 21 million bitcoin, and we feel like there’s a land grab right now to acquire as much as you can,” Saylor said.

Keep reading for the biggest takeaways from the Microstrategy call.

A huge opportunity for world’s largest companies 

Big tech companies could generate $1 trillion of value just by plugging into bitcoin, Saylor said. 

Companies like Apple, Google, Facebook and Amazon could implement digital property right into their mobile apps, he added, noting that Square and PayPal have already successfully done this.

“By plugging this open protocol, digital property into every corporation, every product, every service, and every government and every agency in the world, you’re going to make them better,” he said. “You buy bitcoin so that when Apple, Amazon, Facebook, and Google build bitcoin into their product, then you’re the beneficiary because you can’t afford to buy Apple, Amazon, Facebook and Google.”

Bitcoin and DeFi are different bets

When asked if MicroStrategy would consider investing in other cryptocurrencies, such as Ethereum, Saylor said the company will remain focused on bitcoin

Digital currencies used as a medium of exchange aren’t an investment strategy, and platforms and exchanges focused on decentralized finance, such as Ethereum and Uniswap are different types of businesses. 

MicroStrategy’s view is that integrating bitcoin into every corporation, product, service, government, as well as any other part of the traditional economy, will make them better, Saylor said.

The firm does not believe the competing theory that innovation is going to come by creating other crypto asset networks in a decentralized area, the CEO added.

“We don’t wish to express a general opinion or take an investment risk with regard to which platform, which application and which use case of bitcoin will be most successful,” he added. “We think that the least risky, most diversified investment strategy is to simply hold bitcoin.”

Hedge funds, biggest tech players to spark greater adoption

Saylor said during the Thursday call that he expects macro hedge funds to drive the institutional adoption of bitcoin. 

“Bitcoin is getting on their radar as digital property … and now they’ve got a multi-year track record of bitcoin outperforming gold,” he said. “I think that there’s a lot of money that’s going to flow from gold funds and investment funds into digital gold — that is bitcoin.”

Paul Tudor Jones, founder and CIO of Tudor Investment Corporation, told CNBC in June that bitcoin is a good portfolio diversifier. He said he was in favor of having 5% of his portfolio invested in bitcoin, alongside 5% each in gold, cash and commodities.

Hedge fund manager Brevan Howard is investing in digital assets and London-based Marshall Wace is reportedly gravitating toward the crypto space amid growing demand among allocators. 

In terms of public companies, large founder-led tech players will most enthusiastically embrace bitcoin, Saylor argued, because they have charismatic leaders that are risk takers and understand technical nuance.

“You wouldn’t want to be the last big tech network to integrate digital property into the protocol because bitcoin turns your billion-user digital communications company into a billion-customer bank in cyberspace,” he added. “They will do it sooner than other publicly traded companies because they get it and because they need to figure it out for competitive reasons.”

A crypto.com report released on Thursday shows that the number of crypto users more than doubled in the first half of 2021 to 221 million users.

‘Westernization’ of bitcoin a positive thing

Like others, Saylor said that he views the bitcoin mining exodus from China amid the country’s crackdown on crypto as a positive thing.

More miners are moving to America, for example, and Saylor predicts there will be “an avalanche” of publicly traded bitcoin miners continuing to emerge in the next six months or so.

The miners’ movement away from China will also be good for the US dollar and US technology, he asserted.

“Bitcoin is now aligning with the big tech networks from Amazon, from Apple, from Google, from Facebook,” he explained. “These are very, very powerful, dominant digital networks, and whereas they have grown to dominance by offering digital music and digital retail and digital books and digital communications, now we have something new: digital property.”

More large banks in the western world are supporting bitcoin, Saylor added. 

Traditional banks are being forced into the crypto space as a way to compete against digital wallets, analysts have said. Most recently, JPMorgan reportedly began allowing all of its wealth management clients to access crypto funds

  • Ben Strack is a Denver-based reporter covering macro economics, financial services and digital asset management. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence, and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism.