In a recent podcast, Michael Saylor, the chairman and co-founder of business intelligence firm MicroStrategy, said that large corporations stacking up on Bitcoin (BTC) should not be a cause for concern.
Speaking on an episode of Natalie Brunell’s Coin Stories podcast aired on August 7, he said it was only a matter of time before mega-corporations and third-party investors participated in the growing Bitcoin economy. He suggested that while Bitcoiners may desire self-sovereignty and control over their assets, there is a “need to be prepared for Bitcoin to infuse into everything.”
Saylor Says Bitcoin Will Have More Use Cases Than One as it Gets Integrated into Society
Saylor explained that as the original cryptocurrency gets more integrated into society, it will have more use cases and won’t necessarily have a one-size-fits-all model. He noted there are three different types of Bitcoin “wrappers”, some who will always prefer holding their BTC in self-custody, while the others might be using multi-sig wallets for added safety or assign a layer-3 custodian to hold the digital assets on their behalf.
The former CEO of one of the largest corporate Bitcoin holders outlined three main reasons that underpin the need for crypto custodians – Technical, political, and natural.
According to Saylor, for political reasons, there will be a need for more third-party crypto custodians due to upcoming global policy regulations to supervise the crypto sector. He says that on a technical level, there will be consumers who will want to make Bitcoin transactions via their mobile phones. This will require third-party service providers to act as a Layer-3 solution to facilitate the transactions.
MicroStrategy Chairman Predicts Mega-Corporations to Become Layer-3 Bitcoin Custodians
Saylor elaborated that Bitcoin will eventually become the base layer, upon which layer-2 scaling solutions like the Lightning Network work to make transactions faster and more efficient. He predicts that in the future, there will be custodial layer-3 networks operated by the likes of Bank of America and Apple, that will provide Bitcoin custodial services for mainstream investors.
Sharing his thoughts on the natural reasons, Saylor suggested that for certain people, it will be safer to entrust their assets to others. As an illustration, he talked about an elderly man with Alzheimer’s who decided to leave his Bitcoins to his unborn granddaughter.
Concluding his interview, Michael Saylor said that the market will determine the right mix to integrate Bitcoin into the global economy. He also encouraged crypto holders to not be afraid of “all the different ways” in which people would “integrate, wrap, embed, and execute” Bitcoin.
Wall Street giants BlackRock and Fidelity have shown interest in Bitcoin. Last month was a milestone for the crypto sector after the U.S. Securities and Exchange Commission (SEC) accepted applications by the asset managers for their spot Bitcoin exchange-traded-fund (ETF) listing. If approved, the product will become one of the first Bitcoin ETFs to be traded on the U.S. stock exchange.
MicroStrategy’s Q2 2023 Earnings
On August 1, MicroStrategy announced its financial returns for the second quarter of 2023. Total revenues for the company dropped 1.4% compared to the same time last year to $120.4 million. Revenues for product licenses and subscription services offered by the company rose by 3.7% to $35.4 million. MicroStrategy’s gross profit for Q2 2023 was $93.3 million, representing a 77.5% gross margin, compared to a gross profit of $96.9 million and a gross margin of 79.4% in the second quarter of 2022.
As of June 30, 2023, the mobile and computer software solutions provider reportedly has cash and cash equivalents of $66 million, a $22.1 million increase over last year’s $43.8 million. In the same period, MicroStrategy holds digital assets that comprise approximately 152,222 Bitcoins (worth $2.196 billion) in its reserves. The Bitcoins were originally acquired for a total cost of $4.53 billion, or $29,672 per BTC.
In 2020, MicroStrategy made the decision to convert its dollar reserves into Bitcoin in an apparent effort to replace U.S. dollars with digital assets to improve the company’s balance sheet. The move which was seen as skeptical by many market analysts, has reportedly been hugely profitable for the company.
At the time of writing, Bitcoin (BTC) is trading at $29,362.46 – down 0.1% in the last 24 hours. Shares of MicroStrategy are priced at $384.32 – up 1.6% since yesterday.