Bitcoin Bull Michael Saylor Discusses the Drop – “Completely Normal”

While Bitcoin (BTC)’s negative annual performance has made investors nervous, Strategy co-founder Michael Saylor said the decline was “completely normal” and that the asset’s long-term value proposition has not changed.

Saylor argued on Fox Business’ “Making Money” program that Bitcoin has experienced 15 major declines in the last 15 years, but has recovered each time by reaching a new record high.

“If you zoom out, you’ll see this is a normal process. These pullbacks clear out tourists, leveraged positions and weak hands from the market, setting the stage for the next rally,” he said.

Saylor argued that Wall Street’s involvement reduces volatility, sharing the following data:

• In 2020, Bitcoin was an 80 vol annual asset.
• This ratio has dropped to 70-60 levels over the years.
• It’s currently at around 50 vol.

According to Saylor, as Bitcoin continues to mature, volatility will drop by another 5 points every few years, making it an asset that is about 1.5 times more volatile than the S&P 500 over the long term, while also outperforming it by 1.5 times.

Saylor responded to comments that investor interest was shifting to areas like AI and gold:

“There’s a lot of bright things happening in the economy, but Bitcoin remains the ultimate digital opportunity for sound money advocates. If you want to store your money safely forever, Bitcoin is stronger than ever.”

Saylor also addressed criticisms of Strategy’s business model on the program. He noted that while the company’s stock has been under pressure recently, Strategy has seen an average annual growth of 70% over the past five years, outperforming even Bitcoin, which has risen 50% in the same period.

Saylor also stated that the company, with over $50 billion in equity, is the most well-capitalized firm in the crypto sector, and that its financial instruments are significantly more liquid than the average institutional products in the market. He explained that the model is based on raising capital through loans and stock sales, then converting it into Bitcoin. He also explained that investors receive a tax-advantaged dividend yield of approximately 10% annually.

Saylor, claiming that this structure is highly resilient, stated that the Strategy is designed to survive a Bitcoin crash of up to 80-90%. Saylor stated that even a 1.25% annual Bitcoin price increase would be enough for the company to maintain dividend payments indefinitely, adding, “Even if Bitcoin doesn’t rise at all, we have 80 years to make up for it.”

*This is not investment advice.