Michael Saylor claims that Bitcoin has become “much less” volatile despite the recent price drop. This statement contradicts analysts who point to the arrival of Wall Street as a contributing factor. The founder of Strategy remains calm, asserting that Bitcoin's volatility has significantly decreased over time.
Saylor rejects the idea that Wall Street's entry has increased Bitcoin's volatility. He highlights that BTC volatility has decreased from approximately 80% in 2020 to about 50% currently. Strategy holds a substantial amount of Bitcoin, with 649,870 BTC valued at nearly 60 billion dollars. The company's stock, MSTR, has seen a drop of 11.50% over five days, mirroring Bitcoin's fall below $90,000.
Michael Saylor Argues Wall Street Has Not Worsened Bitcoin's Decline
Michael Saylor, the executive chairman of Strategy, has dismissed concerns about Wall Street's impact on Bitcoin. In a recent interview, Saylor stated that the entry of traditional financial institutions has not weakened the digital asset; instead, he believes it has stabilized it.
Saylor remarked, "I think we are seeing much less volatility." This assertion comes at a time when BTC's price has dropped by nearly 12% in a week, falling below $90,000. This downturn has also affected MSTR stock, which declined by 11.50% over five days.
To support his claims, Saylor presented specific figures. He noted that in 2020, when Strategy began its significant Bitcoin accumulation, the annualized volatility was around 80%. Currently, this figure oscillates at approximately 50%.
He predicts, "Every few years, Bitcoin’s volatility should decrease by an additional five points." Saylor's long-term objective is for BTC to achieve a volatility level that is 1.5 times that of the S&P 500, while simultaneously delivering "1.5 times better" performance.
This perspective contrasts with that of many observers who believe that Bitcoin's integration into institutional portfolios, particularly through spot ETFs, has created correlations with traditional markets. These connections, they argue, could amplify bearish movements during periods of market stress. However, Saylor maintains that this interpretation is incorrect, insisting, "Bitcoin is stronger than ever."
Unwavering Confidence Amidst Market Turbulence
Strategy holds a record 649,870 BTC, with a current valuation of $59.59 billion. Nevertheless, the recent market correction has had an impact on the company's financial indicators.
The ratio between Strategy’s market value and its Bitcoin assets (mNAV) has decreased from 1.52x to 1.11x. This reduction reflects investor apprehension in the face of the market correction.
Despite these market turbulences, Saylor remains steadfast. He asserts that an 80% to 90% drop in Bitcoin's price would not jeopardize Strategy's financial stability. He explained, "The company is designed to absorb such a loss and continue operating."
This confidence is underpinned by a carefully structured financial approach, which notably avoids diluting long-term shareholders through the use of preferred shares.
Strategy's accumulation strategy continues to accelerate. The company recently acquired 8,178 BTC for $835 million, increasing its weekly buying pace by twentyfold.
Not all market participants share this optimistic outlook. Veteran trader Peter Brandt has cautioned that Strategy could face financial difficulties if Bitcoin were to follow a pattern similar to the 1970s soybean bubble.
Meanwhile, Peter Schiff continues to criticize the company, labeling its business model a "scam." However, Saylor has so far refrained from engaging in debates and remains committed to his strategy.
Saylor's approach highlights ongoing discussions about Bitcoin's future. Positive developments include Strategy receiving a B- rating from S&P, and financial institutions like JP Morgan exploring BTC-backed credit. Conversely, recent volatility has reignited the concerns of skeptics. The coming months will be crucial in determining whether this unwavering conviction can withstand the test of time and market conditions.