MicroStrategy is aiming for a trillion-dollar valuation as a Bitcoin bank

MicroStrategy, led by founder and CEO Michael Saylor, is positioning itself to become a leading player in the Bitcoin banking sector.

In a recent interview with analysts at Bernstein, Saylor outlined the company's ultimate goal, which is to borrow capital at low interest rates, offer slightly higher returns to lenders, and invest the proceeds in Bitcoin.

Since 2020, MicroStrategy has aggressively acquired Bitcoin, using debt and equity to bolster its holdings. The company currently owns 252,220 BTC, worth over $15 billion, and the total investment cost is approximately $9.9 billion.

This makes MicroStrategy the largest corporate holder of Bitcoin, accounting for approximately 1.2% of the total Bitcoin supply.

Saylor believes Bitcoin is the best-performing asset of the 21st century and sees it as a hedge against inflation and a long-term store of value. He predicts that Bitcoin will eventually make up a larger share of global financial capital, estimating the potential price at $13 million per Bitcoin by 2045.

The company's strategy deviates from traditional banking models as Saylor argues that investing in Bitcoin carries lower counterparty risk compared to lending to individuals or businesses.

He explained that MicroStrategy plans to continue borrowing from the bond market while investing in Bitcoin, aiming for an average annual return of 29%.

Despite the challenges of scaling this model, Saylor expressed confidence in the company's ability to raise significant capital and envisioned a company that could grow to a trillion-dollar valuation.

Other companies, including Bitcoin miners and exchanges, may want to adopt similar treasury strategies, although Saylor noted that MicroStrategy's unique market position makes it difficult for others to copy its approach.