In a recent interview, Michael Saylor, the executive chairman of Strategy, articulated the company’s role in the evolving cryptocurrency landscape, likening it to a “central bank of Bitcoin.” Saylor explained that Strategy’s innovative capital-markets strategies are designed to serve as a vital bridge between traditional financial markets and the Bitcoin network.
Saylor reflects on how the pivotal experiences during the COVID-19 pandemic drove Strategy’s substantial shift towards Bitcoin. He described the company’s journey as a response to the turmoil of 2020, stating, “the physical economy of the world came to a grinding halt and the financial system was turned upside down.” For Saylor, the onset of the pandemic sparked an existential realization as he discovered Bitcoin amid what he dubbed the “war on COVID and the war on currency,” ultimately transforming the company’s outlook on finance.
Revamping Financial Models for Bitcoin Integration
This transformation, according to Saylor, is often misunderstood. He countered criticisms that Strategy simply relies on leverage to purchase more Bitcoin by revealing that the firm has raised approximately $44 billion in capital over the past 18 months, predominantly through equity. “There isn’t really leverage,” Saylor stated emphatically. “Equity is capital that you have forever. We’re funneling that capital into the crypto economy. We’re buying Bitcoin.” He noted that Strategy has made substantial acquisitions, amassing about $48 billion worth of Bitcoin through 88 different transactions as they secured funding.
When pressed whether Strategy is merely an enthusiastic buyer of Bitcoin or could be viewed as a “shadow central bank,” Saylor embraced the broader analogy, declaring, “Bitcoin is digital capital. It is the world reserve capital network. It’s replaced gold as the global non-sovereign store of value for the human race.” He further elaborated on this comparison, indicating that unlike traditional banks that generally buy credit, Strategy is effectively offering credit, positioning itself as akin to a central bank.
Saylor’s assertion of Strategy functioning as a central banking entity rests on its innovative financial products that aim to convert Bitcoin’s asset strength into growth opportunities for investors reluctant to hold BTC directly. He characterized STRC, a currency pegged to the dollar and backed by Bitcoin, as a mechanism that routes funding directly back into Bitcoin purchases, effectively linking the crypto economy with traditional finance.
Shifting towards his vision, Saylor outlined Strategy’s transition from maturity-driven debt towards perpetual financial structures. He summarized this evolution into four distinct phases, emphasizing that the company’s priority is to avoid situations where principal funding comes due. “We don’t want to have leverage. We want to have amplification via equity. We never want the principal to come due. We’d rather pay a higher dividend forever,” he remarked. To solidify this ambition, Strategy has also announced a substantial cash reserve for dividends, effectively eliminating immediate credit risks.
Moreover, Saylor highlighted liquidity as a key differentiator for Strategy in the financial markets. Over the last nine months, the firm has raised $7 billion and has seen its digital credit instruments experiencing noteworthy trading volumes, challenging the norm seen in conventional equity. This evolving landscape, he suggests, shows that while Bitcoin serves as a foundational digital capital, the world’s financial systems will increasingly be powered by instruments and credit derivatives built around it.
As Bitcoin remains at the forefront of digital finance, Saylor’s ambitious vision for Strategy aligns with a growing belief in Bitcoin’s status as an indispensable financial asset. At press time, Bitcoin is trading at $89,250, reflecting a persistent interest and speculation within the market, underscoring the active and transformative role that firms like Strategy are playing in integrating digital currencies into mainstream finance.
