Ben Strack

<div id="highlights-block_6256d8c271195" class="highlights">
 <ul>
 <li>“We’re running our business to be an intelligently levered spot bitcoin ETF,” Saylor said during the Exchange ETF conference</li>
 <li>The price of a bitcoin could hit $10 million or beyond, the CEO said</li>
 </ul>
 
</div>



MicroStrategy CEO Michael Saylor called US Treasury Secretary Janet Yellen’s recent address on digital assets “probably the single-most important speech of the 21st century.”



Yellen <a href="https://cms.blockworks.co/yellen-warns-of-crypto-risk-in-first-digital-asset-speech/" target="_blank" rel="noreferrer noopener">discussed regulation around digital assets</a> during an event last week at American University in Washington, D.C, noting that risk-managed innovation “should be embraced” and calling for “tech neutral” regulation. 



The talk came just weeks after President Joe Biden signed an executive order <a href="https://cms.blockworks.co/whos-in-charge-of-what-breaking-down-the-crypto-executive-order/'" target="_blank" rel="noreferrer noopener">urging government agencies</a> to work together to study the “responsible development” of digital assets.



“That’s a green light to the entire economy,” Saylor said Tuesday during a panel at the Exchange ETF conference in Miami Beach. “All of the people who thought [bitcoin] was a Ponzi scheme are getting silenced. All the people that said it’s perfect and too good to be true, so the government will take it away from me, they’re getting silenced.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg" alt="" class="wp-image-20082" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=385 385w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=391 391w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=328 328w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Image-from-iOS-5-edited-scaled.jpg?w=50 50w" sizes="(max-width: 2048px) 100vw, 2048px" /><figcaption>MicroStrategy&#8217;s Michael Saylor (right) during a panel at the Exchange ETF conference in Miami | Source: Ben Strack for Blockworks</figcaption></figure>



Saylor has been one of bitcoin’s most outspoken advocates, and MicroStrategy is among the world’s largest publicly traded corporate owners of bitcoin.



The CEO <a href="https://twitter.com/saylor/status/1511315882886246409" target="_blank" rel="noreferrer noopener">tweeted</a> earlier this month that his company bought an additional 4,167 bitcoins for roughly $190 million — an average price of about $45,700. MicroStrategy held 129,218 bitcoins as of April 4, purchased for nearly $4 billion. 



The buy came after MicroStrategy subsidiary MacroStrategy last month <a href="https://cms.blockworks.co/silvergate-issues-bitcoin-collateralized-loan-to-microstrategy-subsidiary/" target="_blank" rel="noreferrer noopener">obtained a $205 million loan</a> from Silvergate Bank, allowing the company to buy more bitcoin. 



Saylor had said during <a href="https://cms.blockworks.co/michael-saylor-microstrategy-exploring-options-to-use-its-bitcoin/" target="_blank" rel="noreferrer noopener">a Feb. 1 earnings call</a> about 110,000 of the company’s bitcoins were not pledged as collateral and could be used to generate yield or to leverage.



“We’re running our business to be an intelligently levered spot bitcoin ETF that generates tax-free yield for people that want to be in that kind of security,” he said during the conference.



The Securities and Exchange Commission (SEC) has not yet permitted a spot bitcoin ETF to come to market. Saylor said that though the approval of such a product could be a year or two away, he thinks there’s “a more than 50% chance” that Grayscale Investments has “the inside track” and gains approval first. The SEC is set to rule on <a href="https://cms.blockworks.co/grayscale-ceo-spot-bitcoin-etf-approval-is-the-next-natural-step-for-sec/" target="_blank" rel="noreferrer noopener">Grayscale’s proposal</a> to convert its Bitcoin Trust (GBTC) to an ETF in July.  



Saylor said that bitcoin could disrupt the commercial real estate market as people use the asset as an alternative store of value to a second home, taking bitcoin’s market capitalization as high as $100 trillion.&nbsp;



Bitcoin’s market cap was roughly $750 billion on Wednesday morning, according to data compiled by Blockworks.&nbsp;&nbsp;&nbsp;



The asset can also begin to “demonetize” sovereign bonds as investors search for yield, Saylor added.&nbsp;&nbsp;



“A maximalist would look at it and say the first stop is $500,000 a coin, the next stop is $5 million a coin and the next stop is $10 million or beyond because we expect it to totally turn the paradigm of money and technology upside down,” Saylor said. “Bitcoin’s the foundation of the 21st century cyber economy.”&nbsp;



Saylor shared the stage with Frank Holmes, executive chairman of HIVE Blockchain Technologies, and the two compared and contrasted bitcoin to gold.



Gold “will always be there,” Holmes said, but noted that millennials and certain “sophisticated” older investors are shifting from gold to bitcoin.



Saylor agreed that gold will continue to be a non-sovereign store of value for certain investors.



“There’s a lot of 20th century things that were built and I like. I’ve got a silver belt buckle and I’ll be keeping it,” the MicroStrategy CEO said. “But you’re not going to make billions and tens of billions and hundreds of billions of dollars off of 20th century ideas; you’re just going to live comfortably off of them. It’s the 21st century ideas that are going to turn the world upside down.”



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Michael Saylor Bullish on Promise of Crypto Regulation

<div id="highlights-block_62432627f0143" class="highlights">
 <ul>
 <li>The loan was made under the Silvergate Exchange Network Leverage program, which had $570 million in commitments at the end of 2021</li>
 <li>MicroStrategy last reported that it was holding 125,051 bitcoins, which were acquired for nearly $3.8 billion</li>
 </ul>
 
</div>



Silvergate Bank has issued a $205 million loan to MicroStrategy subsidiary MacroStrategy, allowing the company to buy more bitcoin.&nbsp;



The interest-only term loan is secured by bitcoin held in MacroStrategy’s collateral account. In addition to allowing the company to purchase more bitcoins, the loan may be used to pay expenses related to the loan transaction or for general corporate purposes, according to a Tuesday company announcement.&nbsp;



The loan was made under the Silvergate Exchange Network (SEN) Leverage program. Founded in 2020, SEN Leverage grew to roughly $570 million in commitments, as of Dec. 31.&nbsp;



“[MicroStrategy’s] innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business,” Silvergate CEO Alan Lane said.



A Silvergate spokesperson declined to comment further.



MicroStrategy bought 10,300 bitcoins during the fourth quarter of 2021 for an average price of $57,113 following a capital raise through the firm’s at-the-market equity offering. The Virginia-based analytics and business intelligence company purchased an additional 660 bitcoins between Dec. 30 and Jan. 31 for roughly $25 million in cash — amounting to $37,865 per bitcoin.



The buys brought the company’s total held bitcoin to 125,051, which were acquired for nearly $3.8 billion. MicroStrategy is the world’s largest publicly traded corporate owner of bitcoin.



About 110,000 of the company’s bitcoins are not pledged as collateral and could be used to generate yield or to leverage, MicroStrategy CEO Michael Saylor said during <a href="https://cms.blockworks.co/michael-saylor-microstrategy-exploring-options-to-use-its-bitcoin/" target="_blank" rel="noreferrer noopener">a Feb. 1 earnings call</a>. 



He added at the time that the company planned to continue using free cash flow to buy more bitcoins, and would evaluate opportunities to raise additional capital as a way to purchase the digital asset.



“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” Saylor said in a statement.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”</blockquote>



A MicroStrategy representative did not immediately return a request for comment. Bitcoin’s price was about $47,800 at 11 am ET, according to <a href="https://cms.blockworks.co/prices/" target="_blank" rel="noreferrer noopener">data compiled by Blockworks</a> — up 0.5% in the past 24 hours and roughly 16.4% from seven days ago.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Macrostrategy