• Language & Exchange Rate Switch
  • Preference Settings
    Rise/fall colour
    Start-End Time of the Change
Web3 Exchange
Gate Blog

Your Gateway to crypto news and insights

Gate.io Blog What Is Behind MicroStrategy \"All in BTC\"

What Is Behind MicroStrategy \"All in BTC\"

26 September 21:32



TL;DR



  • Founded in 1989, MicroStrategy is a global leader in business intelligence software.


  • Saylor's Bitcoin belief is not groundless. Before deciding to buy Bitcoin, he has carefully compared various investment schemes such as cash, bonds, stocks, gold, real estate and Bitcoin.


  • MicroStrategy's latest purchase of Bitcoin was the smallest since it began to accumulate Bitcoin on its balance sheet, which may indicate the financial difficulties of this enterprise software company.


  • Saylor also predicted that the price of Bitcoin would definitely rise to $1 million, and he thinks it may rise even higher, and the price would keep going up.


About MicroStrategy


Founded in 1989, MicroStrategy is a global leader in business intelligence software. MicroStrategy's software products provide business intelligence services for thousands of companies and millions of users. They have become an indispensable part of their business activities, operations, plans and decisions. They are widely used in global retail, telecommunications, science and technology, banking, finance, insurance, food, medicine, automobile, manufacturing and other industries. MicroStrategy has customers in Fortune 500 and many government departments and educational institutions.

MicroStrategy currently has more than 1,600 employees in 20 different countries. Headquartered near Washington, the United States, the China Technology Center in Hangzhou, China, is the only technology research and development center other than the headquarters. Presently, it has nearly 150 employees.

Up to 2008, in the authoritative OLAP Survey of BI industry for five consecutive years, MicroStrategy's actual capacity of processing data is the first in the industry; Meanwhile, MicroStrategy's customer loyalty ranked first for four consecutive times. In 2008, the company was again nominated by Fortune magazine as the candidate of the 100 best employers, continuing the honor of the American software industry. For many years, MicroStrategy and its products have been leading the industry with strong technical resources and excellent business philosophy:

  • The first company to provide business intelligence software on the Internet and wireless networks;

  • Has leading data analysis, intelligent computing and information mining capabilities;

  • Can efficiently process 100 times more data than other software in the industry;

  • Unique integrated business intelligence platform;

  • MicroStrategy's business intelligence technology is ahead of academic research, and has a large number of US patents.


About Founder Michael Saylor


"My belief is: if you want to play a game, you'd better all in. There is no exception. I don't believe those who held back a trick or two can laugh until the end."—— Michael Saylor

Anecdote

Saylor was a Christian and baptized child. But in his opinion, life in the real world is like playing a game with God.

Michael Saylor once talked about his outlook on life in a public interview, "Look at my ring - there is a dam, right? There is also a beaver. This beaver is playing games with God in the waves. Edison is also playing games with God. These people such as Rockefeller and Carnegie are all just like me. They are just playing a game all their lives."

Like the founders of other Internet companies, Saylor also has a near legendary life experience. After a life of wandering struggle, I have a deep understanding of life as a play.

Michael Saylor was born in Nebraska on February 4, 1965. Since his father was an air force officer, he spent his time flitting between military bases in Japan, New Zealand, Nebraska and Florida from childhood. At the age of 11, the family began to settle in Ohio, in Fairbourne County near Wright Patterson Air Force Base. This base is the legendary place where the remains of UFOs and alien corpses are hidden.

Saylor is a good boy who loves reading and has a good reputation in his alma mater Fairborn High. At the graduation ceremony, he was selected as the representative of outstanding graduates to speak; He was selected as the "most likely person to succeed" in the school's voting activities. Spahr, a classmate, later recalled: "This guy reads more books than all of us. He can always bring you to the ancient Greek and Roman times to talk about things with him."

It is precisely because of the yearning for the "axis era" that Saylor has always been the top tweet full of philosophy:

"Bitcoin is a group of network wasps. They serve the goddess of wisdom. They live on the fire of truth and become more and more intelligent, agile and powerful at an exponential speed. Behind them, there is a wall of encrypted energy“

In an interview with reporters in Washington, D.C., Saylor also said:

"I never said that I wanted to change everything in the world. But if I wanted to lead the world from ignorance to knowledge, or even 'omniscience', it would be somewhat religious. But to be honest, if God came to the world, he would hate the world now."

With a strong personality, persistent and indomitable spirit and belief in “all in” philosophy, Saylor's gambling on Bitcoin is not surprising.

It has to be said that having such a genius to bet on Bitcoin is not only a blessing but also a disaster for the Bitcoin community.

As a bookish Christian, Saylor should understand that there was a debate in medieval Christianity that affected the history of modern science: did people understand their beliefs because of their beliefs? Or is there faith because you understand the content?

Bitcoin Belief

Saylor's Bitcoin belief is not groundless. Before deciding to buy Bitcoin, he has carefully compared various investment schemes such as cash, bonds, stocks, gold, real estate and Bitcoin.

"In terms of the current M2 supply of the U.S. dollar, it will increase by 5% in 2020 and 24% each year in the next 20 years. This means that the purchasing power is declining. At least in the next 3-4 years, the money we hold will depreciate by 15% each year. The macro-economy still has an inflation rate of 2% each year. With this account, the Federal Reserve is like sneaking into your backyard and robbing your wealth openly."

In the currency market, the dollar will become weaker. This means that the capital market, real estate market, bulk commodities and gold are not so good. The actual return on investment is almost zero, or even negative. " In contrast, "Bitcoin is a hundred times better than gold, or even a million times better. I will not sell Bitcoin. I want to hold Bitcoin for a hundred years."

Of course, countless people have asked him: “Isn't Bitcoin ETF what your company does? If Bitcoin falls, won't the company end?”

Saylor was very firm: "Bitcoin is not a security at all! Bitcoin is a currency!"

For him, understanding is belief, and belief is understanding. This is true of Christianity, earthly life and Bitcoin.




All in Bitcoin


MicroStrategy's latest purchase of Bitcoin was the smallest since it began to accumulate Bitcoin on its balance sheet, which may indicate the financial difficulties of this enterprise software company.

The company founded by Michael Saylor, a Bitcoin missionary, disclosed in a document submitted to the Securities and Exchange Commission on September 19 that it used surplus cash to purchase an additional $6 million worth of Bitcoin (301 Bitcoins were purchased at an average price of $19,851).

This purchase makes the total amount of Bitcoin held by MicroStrategy and its subsidiaries exceed 130,000 BTC, the total purchase price is approximately $3.98 billion, and the average purchase price is approximately $30,639 per token.

The current performance of the investment is not as expected, leading observers to question the robustness of the company's digital strategy. Bloomberg reported that although MicroStrategy's latest Bitcoin purchase was the smallest since the company began to accumulate Bitcoin two years ago, the price of Bitcoin has been lower than $19,000 since the disclosure, so it has been in deep trouble.

The total 130,000 BTC held by the company is also approximately 38% lower than the principal value when it was purchased as a whole, because its current value is approximately $1.5 billion, which means that the company's impairment losses exceed $1 billion. The company's share price has not improved, although its revenue has remained at the same level for more than five quarters.

Even though its tight financial situation was caused by betting on Bitcoin, and analysts also criticized it a lot and described its investment as reckless, Microstrategy was still determined to continue to buy Bitcoin.

Earlier, the company applied to the Securities and Exchange Commission of the United States for the sale of up to $500 million of shares to finance its further purchase of Bitcoin. Last month, Saylor changed his role in the company from CEO to Chairman in order to focus on planning the accumulation of Bitcoin.

MicroStrategy remains one of the few companies to put itself in the standard position of Bitcoin - a move that has led to conflicts with regulators, including the Securities and Exchange Commission (SEC). Anyhow, Saylor continues to strive for more companies to adopt the Bitcoin standard, because he believes that the pioneer cryptocurrency is the only necessary non-sovereign vault.

If the cryptocurrency market continues to maintain its current development path, Saylor's above belief may also be the failure of MicroStrategy. Meanwhile, as governments fight against inflation, cryptocurrencies have also shown a strong positive correlation with the stock market, and this development path does not seem to reverse soon.


MicroStrategy's Way to Increase Its Holding


MicroStrategy released its Q1 financial report of 2022 on May 3, Beijing time. The financial report shows that the company currently holds 129,218 Bitcoins, with an average cost of $30,700. In Q1 of 2022, the company made another provision for Bitcoin impairment of $170.1 million, making the quarter a loss of $130.8 million.

The news of MicroStrategy's public purchase of Bitcoin can be traced back to August 11, 2020. At that time, MicroStrategy said that it had spent $250 million to purchase 21,454 Bitcoins according to the asset allocation strategy formulated in its financial report for the second quarter of 2020. In the middle of September 2020, MicroStrategy announced that it would purchase 16,796 Bitcoins again with $175 million and stated that it would take Bitcoin as the main reserve asset. So far (up to April 2022), the records of MicroStrategy's purchase of Bitcoin are as follows:


According to institutional position data, apart from the exchanges as custodians, corporate entities who currently hold more than 100,000
Bitcoins, except Block.one and Mt. Gox, which has already closed down, are ranked third by MicroStrategy.

The last purchase time was from August 2, 2022 to September 19, 2022, MicroStrategy acquired about 301 Bitcoins in cash at approximately $6 million, with an average price of $19,851.

Before the deadline of September 23, 2022, MicroStrategy and its subsidiaries held approximately 130,000 Bitcoins. The total purchase price of these Bitcoins was about $3.98 billion, and the average purchase price was approximately 30,639 per Bitcoin.


Conclusion


The slogan of MicroStrategy is "HODL for a lifetime". Saylor also reiterated in the report, “if you do not intend to hold it for four years, then you are not a real investor at all. You are a trader. My advice to traders is not to trade it, but to invest in it.”

Saylor also predicted that the price of Bitcoin would definitely rise to $1 million, and he thought it may rise even higher, and the price would keep going up.

As the pioneer of the blockchain world, whether Bitcoin is still expected to "skyrocket" all the way in the future, perhaps we can see it from one of the current institutional blue whales - "MicroStrategy".



Author: Gate.io Observer: Byron B. Translator: Joy Z.

Disclaimer:

* This article represents only the views of the observers and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

ETH/USDT + 1.48%
BTC/USDT + 2.62%
GT/USDT + 2.98%
Unbox Your Luck and Get a $6666 Prize
Register Now
Claim 20 Points now
New User Exclusive: complete 2 steps to claim Points immediately!

🔑 Register an account with Gate.io

👨‍💼 Complete KYC within 24 hours

🎁 Claim Points Rewards

Claim now
Language and Region
Exchange Rate
Go to Gate.TR?
Gate.TR is online now.
You can click and go to Gate.TR or stay at Gate.io.