MicroStrategy CEO Michael Saylor touted the firm's stock, MSTR, as a better alternative to other exchange-traded vehicles with exposure to bitcoin — and he's considering alternative methods to increase the amount of bitcoin on the balance sheet.
In an interview with Bloomberg, Saylor argued that unlike bitcoin futures exchange-traded funds on the market or bitcoin funds like Grayscale, investing in MicroStrategy doesn't come with fees. With considerable sums of bitcoin on the balance sheet — now nearly 125,000 BTC — the firm presents considerable exposure to the cryptocurrency.
According to Saylor, even a spot ETF, which the Securities and Exchange Commission has yet to approve, might be less attractive than a MicroStrategy investment since as an operating company, it does not charge fees. Furthermore, MicroStrategy can generate additional yield from its holdings.
"If you're looking for a leveraged bitcoin play with spot exposure that's got positive yield, then MicroStrategy is the only game in town," said Saylor.
The firm will continue to buy bitcoin as part of its strategy, according to Saylor. It executed its most recent purchase using free cash flow, rather than issuing debt or equity as it has in the past. The firm generated $90 million in cash flow this year, which Saylor said will also be used to pay the debt service. The remainder, he said, will go into bitcoin.
But the firm is also considering alternative methods to make future big bitcoin purchases.
"Probably the most compelling and interesting ones are to generate yield off the 110,000 bitcoin that are currently unpledged, or to borrow against that 110,000 bitcoin and then reinvest that in more bitcoin," he said.
Still, Saylor said the firm hasn't made any decisions yet and any plans will be tested against its risk parameters.