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- MicroStrategy stock is up roughly 246% in 2023, and jumped more than 6% on Thursday.
- Founder Michael Saylor explained how bitcoin has helped the company's stock compete with Big Tech giants.
- He said spot bitcoin ETFs and the 2024 halving event will push the token's price higher.
Michael Saylor, the bitcoin-bull founder and executive chairman of MicroStrategy, credits the world's largest cryptocurrency for allowing his software firm to compete with the likes of Apple, Microsoft, and other of the so-called Magnificent Seven stocks.
Shares of MicroStrategy have soared 246% in 2023, and on Thursday climbed 6% to trade at about $492 a share.
Similarly, bitcoin — of which MicroStrategy holds billions of dollars worth in its coffers — hit a fresh high for the year on Thursday, above $37,200, and it's up 122% year-to-date.
To Saylor, the twin headwinds of government-induced inflation and technology-driven deflation make it difficult for companies other than the Magnificent Seven to see consistent, considerable growth.
"If you're a main street company, you're forced to fight for your survival with one hand tied behind your back. If you're going to keep up with the Magnificent Seven you're going to have to grow your revenues and cash flows at 20% a year or faster ad infinitum," Saylor said in a Fox Business interview earlier this week. "There's seven companies that generate all the shareholder returns. There's 7,000 companies that can't keep up. What we did in August of 2020 was recognize that there's no way we're going to outgrow Google and Microsoft and Apple Computer as a mid-sized software company."
Saylor explained that his company began to seek out a "high-growth digital monopoly" to invest in, and decided bitcoin was the most promising asset.
"We realized bitcoin is like a high-tech dominant digital network growing at 40% or 50% a year, and so we bought it," he said. "It's kept growing at 40% to 50% a year, and now we're using our balance sheet to grow the company."
Bitcoin has rallied sharply in 2023 but can push even higher once regulators approve financial firms' bitcoin spot ETF products, in Saylor's view. Bloomberg Intelligence strategists forecast a 90% chance of approval by January 2024.
"[Bitcoin's] supply and demand are in balance right now, but after the halving in April, the supply gets cut in half," Saylor maintained. "And after the spot ETFs come online, the demand's going to at least double. So the only thing that's going to adjust there is the price in order to get the market to clear."
Other players in the digital asset sector have predicted that bitcoin could soar beyond $100,000 as a result of the halving. Each of the prior three halving events for bitcoin were followed by new record-highs in the subsequent 12 months.
"The next 12 months are pretty auspicious for the asset class," Saylor said.