Key Takeaways
- • Michael Saylor, executive chairman of Strategy, told Bloomberg TV that the Bitcoin bear market is over and that the token will "clearly move back above $100,000 and return to a six-figure price."
- • Bitcoin is trading around $83,000, roughly 30% below its record high of $126,251 set in October of the prior year, and has fluctuated near $80,000 since mid-August.
- • Strategy is establishing a new capital management framework that uses sales of Bitcoin and common stock to build cash and repurchase interest-bearing preferred shares, aiming to secure liquidity and reduce leverage pressure.
- • MSCI is weighing whether to exclude companies whose primary purpose is asset accumulation from global equity indexes; JPMorgan estimates up to $2.8 billion could be affected if Strategy is removed. MSCI is scheduled to announce its decision on Friday.
Summary
Michael Saylor, executive chairman of Strategy, said Bitcoin's bear market is over and predicted the cryptocurrency will climb back above $100,000, according to Bloomberg, which reported the remarks on October 13 from an interview with Bloomberg TV the previous day. Saylor said Bitcoin bottomed slightly below $60,000 before rebounding, and that its move into the $80,000 range points to further gains. "We are transitioning into a bull market," he said, adding that he expects the company to buy more Bitcoin and issue securities in that environment. Over the longer term, he said Bitcoin is poised to grow at an average annual rate of 20% to 30% over the next several years.
Bitcoin was trading around $83,000 at the time of reporting, having fluctuated around the $80,000 level since mid-August. It remains about 30% below its record high of $126,251, reached in October of the prior year. Shortly after that peak, about $19 billion of positions were liquidated across the crypto market in a single day, and Bitcoin then entered a prolonged bearish stretch.
Strategy has changed its funding approach in response to the downturn. The company established a new capital management framework to increase cash holdings through sales of Bitcoin and common stock, while allowing it to repurchase interest-bearing preferred shares. The stated goal is to secure liquidity while reducing leverage pressure. Saylor acknowledged that recent Bitcoin purchases have been smaller than in the previous bull market, but said the company plans to expand purchases and increase securities issuance once conditions allow.
A separate risk factor is MSCI's review of whether to exclude companies whose primary purpose is asset accumulation from global equity indexes. If the rule is adopted, Strategy could be removed, and JPMorgan previously estimated that as much as $2.8 billion could be affected. Saylor said MSCI's position so far has been disappointing because it applies a standard he described as biased against digital assets, and he said he hopes the firm reconsiders, warning the move could set a bad precedent for the industry. He argued Strategy should be viewed as an operating company rather than a simple asset-holding company. MSCI is scheduled to announce its decision on Friday.
Bitcoin was trading around $83,000 at the time of reporting, having fluctuated around the $80,000 level since mid-August. It remains about 30% below its record high of $126,251, reached in October of the prior year. Shortly after that peak, about $19 billion of positions were liquidated across the crypto market in a single day, and Bitcoin then entered a prolonged bearish stretch.
Strategy has changed its funding approach in response to the downturn. The company established a new capital management framework to increase cash holdings through sales of Bitcoin and common stock, while allowing it to repurchase interest-bearing preferred shares. The stated goal is to secure liquidity while reducing leverage pressure. Saylor acknowledged that recent Bitcoin purchases have been smaller than in the previous bull market, but said the company plans to expand purchases and increase securities issuance once conditions allow.
A separate risk factor is MSCI's review of whether to exclude companies whose primary purpose is asset accumulation from global equity indexes. If the rule is adopted, Strategy could be removed, and JPMorgan previously estimated that as much as $2.8 billion could be affected. Saylor said MSCI's position so far has been disappointing because it applies a standard he described as biased against digital assets, and he said he hopes the firm reconsiders, warning the move could set a bad precedent for the industry. He argued Strategy should be viewed as an operating company rather than a simple asset-holding company. MSCI is scheduled to announce its decision on Friday.
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