Michael Saylor Just Bought Another Billion in Bitcoin. Should You Follow?

Michael Saylor doesn't do small. The man has turned MicroStrategy from a forgettable enterprise software company into the world's largest corporate Bitcoin holder. And he's not slowing down.

The latest purchase? Another massive tranche. MicroStrategy now holds well over 400,000 BTC, acquired at an average cost basis somewhere around $58,000. At today's prices around $68,000, that's a multi-billion dollar unrealized profit on what started as a corporate treasury decision.

The stock (MSTR) has become a de facto leveraged Bitcoin ETF. When BTC goes up, MSTR goes up more. When BTC goes down, MSTR goes down harder. The premium to NAV fluctuates wildly based on market sentiment.

But should you actually follow Saylor's lead?

The Bull Case for Following Saylor

Let's start with what Saylor gets right.

His core thesis is simple. Bitcoin is the best store of value ever created. It's scarce (21 million cap), it's portable, it's divisible, and it's not controlled by any government. In a world where every fiat currency is being debased through money printing, Bitcoin is the exit.

That thesis hasn't changed since he first bought BTC in August 2020. And the evidence has mostly supported it. Bitcoin has outperformed every major asset class over any multi-year time horizon. The ETF approvals validated it. Institutional adoption is accelerating. Nation states are accumulating.

Saylor's willingness to buy through bear markets, through FTX, through regulatory crackdowns, showed conviction that most investors lack. He bought at $10,000 and at $50,000 and at $70,000. Dollar-cost averaging with a corporate treasury. There's a strong argument that this kind of long-term, conviction-driven accumulation is the optimal Bitcoin strategy.

The Bear Case Against Following Saylor

Now let's talk about what makes this scary.

MicroStrategy isn't buying Bitcoin with cash from operations. The software business generates maybe $400-500 million in annual revenue. You can't accumulate 400,000+ BTC on that kind of cash flow. Instead, Saylor has been using a combination of convertible notes, at-the-market stock offerings, and debt to fund purchases.

The convertible notes are the key piece. MicroStrategy has issued billions in convertible bonds at various rates and maturities. These are essentially borrowing against the company's stock price (which is itself a bet on BTC price) to buy more BTC.

Bitdeer just saw its stock drop 17% on a $300 million convertible note offering. The market is increasingly sensitive to crypto companies issuing debt to fund expansion. MicroStrategy has been the exception, but market sentiment can shift fast.

Here's the risk scenario. BTC drops significantly. MSTR stock drops more (because of the leverage). The convertible notes start looking less attractive. Some holders demand redemption or conversion. MicroStrategy needs to sell BTC to cover obligations. That selling pressure pushes BTC lower. Which pushes MSTR lower. Which puts more pressure on the notes.

It's a reflexive loop. It works spectacularly on the way up and destructively on the way down.

You Are Not Michael Saylor

This is the part that people forget. Saylor has advantages you don't.

He can issue stock. MicroStrategy has used at-the-market offerings to raise billions. You can't print shares of yourself to buy more Bitcoin.

He has a software business generating recurring revenue. Even if it's small relative to the BTC holdings, it covers operational costs and provides a baseline. You (probably) don't have a software company subsidizing your Bitcoin habit.

He has access to institutional credit markets. The terms on MicroStrategy's convertible notes are remarkably favorable, reflecting the market's belief in both BTC and Saylor's execution. You're not getting 0% convertible notes from Goldman Sachs.

He can withstand massive drawdowns without being forced to sell. When BTC dropped to $16,000 in 2022, MicroStrategy's average cost basis was around $30,000. They were underwater by billions. But they didn't sell because they didn't have to. The convertible notes had long maturities. The company could service its debt. Can you sit through a 50% drawdown on a leveraged position without liquidation?

The Metaplanet Effect

It's not just Saylor anymore. Metaplanet, a Japanese company, has adopted a similar Bitcoin treasury strategy. Their CEO recently defended the approach against critics questioning their transparency and options trading model.

This is becoming a playbook. Buy BTC, issue stock or debt to buy more, let the stock trade at a premium to NAV because investors want levered BTC exposure without the complexity of managing it themselves.

The problem with playbooks is that they work until too many people run them simultaneously. If fifty companies all adopt the MicroStrategy strategy, you get a massive concentration of BTC in corporate treasuries funded by debt. That's fine during a bull market. During a bear market, the forced selling could be apocalyptic.

What Individual Investors Should Actually Do

If you believe in Bitcoin long-term (and the structural case is strong), here's what makes sense:

Buy what you can afford to hold. Not with leverage. Not with money you need in the next five years. Cash that you're willing to see drop 50% and still not sell.

Dollar-cost average. Saylor's strategy works because he buys consistently regardless of price. You can do the same thing with $100 a week. You don't need a billion dollars.

Don't copy the leverage. Following Saylor's thesis is reasonable. Following his financial engineering is not. His risk tolerance, his financial structure, and his ability to absorb drawdowns are not replicable by individual investors.

Size your position appropriately. Most financial advisors suggest 1-5% of a portfolio in Bitcoin. That's probably right for most people. Saylor has 100%+ of his company's value in BTC. That's not a model for your retirement account.

My Honest Take

Saylor is either the greatest corporate strategist of the decade or he's building the most spectacular blowup in corporate finance history. There isn't really a middle ground.

My bet is that he's right on the thesis and dangerously aggressive on the execution. Bitcoin probably will be worth more in ten years than it is today. But the path between here and there will include drawdowns that test the limits of MicroStrategy's financial structure.

If BTC goes to $200,000, Saylor looks like a visionary. If BTC spends two years below $40,000, the convertible note holders get nervous, the stock premium evaporates, and things get dicey fast.

Follow the thesis. Respect the conviction. But don't copy the position sizing. You're not bulletproof, and neither is MSTR, no matter what the stock price says today.