Three Reasons Why MicroStrategy's Michael Saylor Thinks BTC Prices Will Reach £3.9M in the Long Run

MicroStrategy co-founder Michael Saylor is convinced that Bitcoin is on a trajectory to replace gold and will reach a value of £3.96 million per token in the long run due to three major positive catalysts.

Spot BTC ETF, Bank Custody, And Fair Value Accounting for BTC on Company Balance Sheets

Saylor believes that the approval of Spot Bitcoin ETFs, which facilitates seamless purchases for institutions, is a big boost for the industry. "Someone can go ahead and buy $100 million [£79.38 million] of Bitcoin through a security, an ETF security. I think that's one," he said in an X Space interview on September 20, 2024.

The second catalyst is banks taking custody of Bitcoin and offering debt against it, which would integrate the token into the traditional financial system and buoy institutional demand.

"Your bank is going to custody it for you and lend against it," Saylor said. Furthermore, if banks enable borrowing against Bitcoin at low interest rates, he believes there won't be any reason for investors to sell. "Nobody's going to sell it because there's no reason to sell it if you can borrow against it at SOFR plus 50 basis points," he added.

Lastly, Saylor sees fair value accounting for Bitcoin on corporate balance sheets as transformative. If businesses could report Bitcoin's true market value instead of being compelled to write down losses, it could speed up adoption.

"I can mark it up or mark it down on my balance sheet based on fair value, the same way I handle Apple stock or even Treasury bonds," he explained. "If the banks can hold this stuff on their balance sheet, then a whole new class of investors are going to buy it."

Saylor added, "People are going to put in million and multi-billion dollar orders to buy it as a treasury asset."

BTC Prices Could Reach £400,000 Even Without These Catalysts

Saylor said that BTC prices will rally to £396,919 in the near term, regardless of major regulatory or institutional milestones, arguing that the cryptocurrency is on its way to surpass gold as the dominant store of value.

"It's going to be a grind up by a factor of 10 just because gold is broken, and Bitcoin is going to replace gold," he said. "Everybody in the universe now knows they need a non-sovereign store of value in the form of a bearer instrument."

Given the prolonged inflation concerns, Saylor thinks Bitcoin's role as an inflation hedge will also drive up its prices. "Last year, people said inflation may be coming. Now, the mainstream narrative has flipped to 'inflation is here, you need an inflation hedge,'" he noted.

Although Saylor didn't offer an exact timeline on his price forecasts, he estimated massive developments to unfold within the next 12 to 36 months. Personally, he prefers a longer, gradual increase in BTC prices rather than a rapid surge because "the longer it takes, the more progressive the grind, the more time I have to buy more of it."

MicroStrategy has been aggressively buying Bitcoin. In early February, the company increased its holdings to over 478,000 BTC tokens.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.