Michael Saylor Defends Bitcoin Strategy as Company’s Bitcoin and Cash Holdings Surpass Outstanding Debt

Michael Saylor Is Touting His Company’s High - And Rising - Bitcoin and Cash Reservesvs. Their DebtLoad Saylor’s latest defense of his company's Bitcoin treasury strategy arrives as its combined Bitcoin and U.S. Dollar reserves reportedly now surpass its outstanding debt obligations. The Development represents a notable checkpoint in the continuing debate on how much in the way of cryptocurrency companies should keep on their books.

For years Saylor, one of Bitcoin's biggest champions, has contended that Bitcoin is superior to cash as a store of value for the long haul.

Saylor’s company began accumulating vast Bitcoin balances through direct purchases and by taking on loans. That has generated both acclaim and critique. Proponents suggest a company can hedge the erosion of its purchase power by holding some Bitcoin on its books; its future gains could more than outweigh interest charges incurred for any financed purchase. Skeptics warn that holding digital assets adds a large amount of volatility risk to the corporate treasury, particularly during periods of falling cryptocurrency prices.

The data cited by Saylor provides yet another proof point in his argument that a strong treasury doesn't have to shun Bitcoin - as long as its Bitcoin-and-dollar reserves are so large as to swamp its debt.

Saylor, who led the company through a massive Bitcoin treasury buildup with borrowed funds, says its balance sheet now contains so much Bitcoin that concern about leverage or solvency are increasingly misplaced. "Even as the Bitcoin allocation has increased, with $142.3 million of cash and a combined Bitcoin and cash value of $477 million as of June 30th, versus outstanding debt of $100 million, there are many that are still missing the big picture with MicroStrategy," Saylor said in a company release Wednesday. The remarks came the same day the value of MicroStrategy's Bitcoin trove had reportedly breached the market.

Its more than 150,000 Bitcoin reserves now tally upwards of $10.5 billion at Wednesday’s prices. By that reckoning, the company's total of cash and its $477 million in Bitcoin, even not accounting for all holdings. The company's policy of funding Bitcoin acquisitions by taking out loans and selling shares - to many at one time controversial-could eventually allow it to pay down debt, though that depends heavily on whether its Bitcoin holdings continue to rally.

Meanwhile, Banks and other financial institutions have been steadily moving into Bitcoin in a trend the company’s holdings might also fuel, though it’s one that has been on a yearslong path to mainstream adoption.

Saylor himself has become something of the primary bellwether for institutional exposure, with the company's fortunes tied not only to its operating business but to the price of a cryptocurrency. Bitcoin and companies holding Bitcoin face their own considerable volatilities though. Future bear markets could still significantly shake up its Bitcoin treasury, the price of which is in constant flux. Regulatory risk, economic trends, and overall investor sentiment toward crypto assets could also impact its holdings going forward.