MicroStrategy's Executive Chairman Michael Saylor has downplayed concerns that Wall Street's increased involvement has negatively impacted Bitcoin's price action and volatility, particularly during the recent market downturn. Saylor asserted that Bitcoin is actually experiencing less volatility than in previous years.
Key Takeaways
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Michael Saylor believes Bitcoin's volatility has decreased over time.
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He stated MicroStrategy is built to withstand significant drawdowns.
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Despite recent price drops, Saylor remains confident in Bitcoin's strength.
Declining Volatility Amidst Market Fluctuations
During a recent interview, Saylor addressed the notion that Wall Street's entry into the Bitcoin market had harmed the cryptocurrency. He countered this by stating that Bitcoin's volatility has actually been on a downward trend. Saylor recalled that when he began investing in Bitcoin for MicroStrategy in 2020, the asset had an annualized volatility of approximately 80%. He noted that this figure has since decreased to around 50% and is projected to continue declining as Bitcoin matures.
Saylor further elaborated that Bitcoin is expected to become about 1.5 times as volatile as the S&P 500 Index, while simultaneously offering superior performance. He emphasized his belief that "Bitcoin is stronger than ever."
MicroStrategy's Position and Resilience
MicroStrategy currently holds a substantial amount of Bitcoin, with 649,870 BTC valued at $59.59 billion at the time of reporting. The firm's market net asset value (mNAV) multiple has seen a decline, dropping to 1.11x from a high of 1.52x when Bitcoin reached its all-time peak of $125,100 on October 5th. Consequently, MicroStrategy's stock (MSTR) has also experienced a downturn, closing at $206.80, an 11.50% decrease over the preceding five days.
Despite these market movements, Saylor expressed confidence in MicroStrategy's ability to weather further downturns. He stated that the company is "engineered to take an 80 to 90% drawdown and keep on ticking," describing their position as "pretty indestructible." He highlighted that their current leverage is extremely robust, with only 10-15% exposure nearing zero.
However, veteran trader Peter Brandt has cautioned that MicroStrategy could face difficulties if its investment thesis, which draws parallels to the 1970s soybean bubble, proves incorrect.
Sources
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Saylor shrugs off suggestion Wall Street ‘hurt’ Bitcoin amid latest crash, ADVFN.
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Saylor shrugs off suggestion Wall Street ‘hurt’ Bitcoin amid latest crash — TradingView News, TradingView.
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