MicroStrategy’s former CEO, Michael Saylor, foresees Bitcoin ETFs surpassing gold and potentially competing with the S&P 500 index as the company gears up for a $700 million investment in BTC.
Saylor believes that Bitcoin funds have the potential to outshine gold ETFs, which have traditionally been among the largest commodity ETFs in the United States.
In a recent interview, Saylor mentions that Bitcoin ETFs could outperform the S&P 500 Index ETFs. Bitcoin ETFs are on an upward trajectory as BlackRock’s iShares Bitcoin Trust (IBIT) reached the top 0.2% of all such products last month.
Saylor described ETFs as a “universal API,” providing investors with a seamless means to trade various funds, including Bitcoin.
An Application Programming Interface (API) serves as a standardized channel for data exchange, streamlining interactions between different computer systems. Saylor elaborated that this framework also serves as the global standard for trading volatility or facilitating credit issuance.
Before the introduction of ETFs, securing a loan against Bitcoin would have been cumbersome and would have significantly higher interest rates. Individuals could potentially leverage shares as collateral for a mortgage through established broker-dealers like J.P. Morgan or Merrill Lynch with ETFs, he said.
Saylor emphasized that these ETFs have opened up a new financial landscape, offering mainstream investors awareness, opportunities, and functionality. He added that the significance of this development cannot be overstated in its impact on the entire network.
Supporting Saylor’s assertion on the potential of Bitcoin ETFs to outpace gold ETFs, analysts suggest that the former may emerge as predominant investment instruments compared to the yellow metal counterparties over the next two years.
According to BitMEX Research, Bitcoin ETFs have amassed $8.5 billion in net inflows despite significant outflows from the Grayscale Bitcoin Trust. The iShares Bitcoin Trust (IBIT) and Fidelity Wise Bitcoin Origin Trust (FBTC) experienced record-breaking inflows within their first 30 days of launch. On March 5, IBIT witnessed a remarkable net inflow of $788 million, marking it the highest daily increase for the investment vehicle.
These funds consistently rank among the top 20 most actively traded ETFs daily, collectively trading over $6 billion in volume on Tuesday – surpassing even Microsoft.
Meanwhile, MicroStrategy stands as the world’s largest corporate holder of Bitcoin, currently maintaining 193,000 BTC on its balance sheet. The firm has realized a significant return on its investment, with a growth rate exceeding 100%, and intends to continue acquiring more BTC.
In a recent move, MicroStrategy announced a private offering of $700 million in 0.625% convertible senior notes due 2030, with an option for initial purchasers to acquire an additional $100 million in notes.
Originally set at $600 million, the upsized offering is anticipated to conclude by March 8. Under specific conditions, the notes, which bear semi-annual interest, can be converted into cash, MicroStrategy class A common stock, or a combination thereof.