I won't explain who Michael Saylor is because you can find it written everywhere. However,
I will explain to you what it means to own 2% of the Bitcoin supply.
But above all I will explain what it means to have bought 2% of the supply of Bitcoin by leveraging the balance sheet in order to borrow money in convertible bonds.
Saylor through MicroStrategy raised capital through convertible debt issues and share sales. For example, in March 2024, the company raised 500 million dollars through a convertible debt offer, with the proceeds destined to the purchase of Bitcoin.
This method allows MSTR to obtain funds at relatively low rates to invest in BTC
Michael Saylor has repeatedly said jokingly that MicroStrategy will continue to buy Bitcoin at the top of the market, this is cause he has often found himself buying large amounts of BTC at times when the average price was high.
As I explained in my other previous post, the price of Bitcoin has always been subject to market cycles: consolidation phases, bull and bear market.
Now that we are in the bull market we are all happy and everything is beautiful.
But when the trend reverses and we go towards a bearish market, what will happen?
MicroStrategy has an unrealized profit of billions of dollars and a debt with which it bought Bitcoin just as big to repay.
We also know about the silent head-to-head between MicroStrategy and BlackRock on who owns more Bitcoin.
And we know that historically BlackRock has never been number 2 in the market.
If for any reason the price of BTC were to collapse,would MicroStrategy sell?
Saylor would say no, but also at the cost of bankrupting MSTR?
if the price of Bitcoin collapses, the company could find itself with fewer resources to cover its financial obligations, increasing the risk of default or having to sell BTC at lower prices than desired.
In addition, this sale would involve many other things: collapse of MSTR shares, reversal of market sentiment, loss of credibility and reputation of Saylor and his company, domino effect ->other frightened investors would start selling in FUD