Transcription
The current price for MicroStrategy is about $330 at the time of recording. However, in today's video, we're not going to be talking about a $300 MicroStrategy; we're going to be discussing something a little bit higher. We're going to explore something that's really exciting as we look forward to the next 12 to 18 months regarding MicroStrategy's price.
We'll go through theoretical examples of exactly how MicroStrategy could reach or surpass $4,000 per share. So, without further ado, let's get right into the discussion today because we don't want to waste any time.
I have been playing with a new website that has come out, which helps MicroStrategy investors better understand the various aspects of MicroStrategy stock. It is called SailorCharts.com. It is quite fun to play with. Not a lot of this information is new necessarily; however, I think it is useful to have it all in one place that is very easy to look at.
On SailorCharts.com, we can see the growth in the Bitcoin strategic treasury reserve for MicroStrategy. As we all know, MicroStrategy began buying Bitcoin back in Q3 of 2020. They first started with just under 40,000 Bitcoin, and they quickly skyrocketed up to 70,000 and then 990,000 Bitcoin. That was a very exciting time. Excuse me, it was a very exciting time as their stack had more than doubled in early 2021. Some people thought, "Oh, it's unlikely they'll double it from here." Of course, they eventually did, granted it took a bit longer, but eventually, a couple of years later, they got up to doubling that in Q4 of 2023. Since then, they have doubled their stack again, closing in on half a million Bitcoin.
Now, can MicroStrategy get to a million Bitcoin? I think it is entirely possible. First, let's get to half a million, and then let's take it every Bitcoin from there. I think there's a non-zero chance that they eventually hit a million. Obviously, they can't double forever, so someday it will no longer be possible for them to increase their Bitcoin stack at the same rate at which they've been doing so. Today, it is just technically impossible; there are only so many Bitcoin. They can't double the stack forever.
However, we've already gone through that. That would be three doublings, right? The first doubling here in late 2020, the second doubling here in late 2024, and the third doubling by early 2024. Maybe we have one or one and a half more doublings to go. You could argue maybe two if you want to be a super mega hyper bull.
But sticking with what we know, assuming they do not increase their Bitcoin stack anymore, that means they have 447,500 Bitcoins held on the balance sheet, acquired for approximately $28 billion, with an average price of $62,000 per Bitcoin.
Now, of course, all the excitement has meant that there is a lot of volume being attracted to their stock. This is something that Michael has explained numerous times about how volatility is vitality and how what he's really selling is the volatility. I think this is really important to understand.
What are the big stocks with all the volume? You have Nvidia, which has the most volume of any stock in the world. They're one of the largest companies in the world. Tesla also has a lot of day-traded volume. Why do people like those companies? Because they have so much volatility, and they're companies with liquidity. If you're going to be day trading a company, if you're in some hedge fund or something, you don't want to be playing in some penny stock that has no liquidity and nobody actually likes. It has no underlying business model that people are trading in volatility because it's trending to zero. They want to trade something that they know is going to have the liquidity to satisfy demand, whether they're going long or short, whatever it is.
Now, there are other companies too that are also very significant. Palantir has had a very exciting couple of months for the Palantir stockholders, shareholders, and supporters. They've surpassed Apple, or at least they surpassed Apple at the time of recording. MicroStrategy, despite being a way smaller company than Apple, and I would argue having a way smaller retail footprint than Palantir, has a massive amount of volume shown there in orange.
Of course, all these other companies—Microsoft, Amazon, Facebook, and others—are way down there at the bottom. Most companies don't have nearly the volume that these companies here have. So, a lot of volatility for MicroStrategy.
This is another great chart from SailorCharts.com as a percentage of daily trade volume. Here, back in volume, we're looking at the absolute amount of day-traded volume in the millions. When Nvidia has 26,000 million, that would be 26 billion, I believe, if I have my math right.
Volume as a percentage is based on the market cap. You can kind of think of it like per capita, I guess. This is the percentage of the total market cap of that company that is being traded on a daily basis. eBay is pretty high up there. Like I said before, Palantir has been having a very exciting time. Despite being a much smaller company than Tesla or Nvidia, it's much more aligned with MicroStrategy. Still, MicroStrategy has double the percentage-based volume of Palantir.
So again, as exciting and as retail engaged as the Palantir folks are, MicroStrategy is having double the volume given its market cap and the size of the company. I think this is only going to continue, and I think this is just the very beginning of what we're going to see in the future.
MicroStrategy is the world's first Bitcoin monopolistic company. Many people think they're too late to Bitcoin, but the reality is that you're not too late. If anything, you may be too early. People compare Bitcoin at its time in its history to the late '90s of the internet, and I think that's actually pretty comparable. Google was one of the first big monopolies of the internet era, and now we have MicroStrategy, which is one of the first big monopolies of this Bitcoin era.
We have the opportunity to watch this in real-time with very high confidence of knowing which direction it's going to go, which obviously is up.
Market value is a really good one. Bitcoin value—the Bitcoin holdings market value versus the carrying value. As you can see, that had a bit of a rise here in 2021. Obviously, since then, they've stacked a lot more Bitcoin, and the Bitcoin has gone up significantly. So even though their average cost basis is $62,000, they are sitting on tens and tens of billions of dollars of market value for their Bitcoin.
If we look at ARR (annualized asset performance) over the last four years, we can compare MicroStrategy and Bitcoin to other major assets. You have gold, which is an inflation hedge, the S&P 500, which most people use as their savings, the NASDAQ 100, which most people in the higher risk spectrum use as their savings, and then you have Bitcoin, which is actual true digital property savings.
Of course, MicroStrategy is just Bitcoin plus extra Bitcoin, which has outperformed that. The annualized performance over the last four years for MicroStrategy is nearly double that of Bitcoin, and that is why Michael Saylor has been able to corner the market and become this monopolistic Bitcoin corporation.
He's able to take that extra volatility the stock is getting beyond Bitcoin and convert some of that volatility into even higher volatility products for people that want to trade MicroStrategy while at the same time siphoning out volatility for people holding convertible bonds or other kinds of instruments, securities, or whatnot that aren't desiring as much volatility.
If we go to convertible bond performance, since I was just talking about that, this is my point. This is on the lower side of the volatility. Some of that volatility has been siphoned out. These are people looking to have a return on investment, but they need to meet their mandate. They need to have the proper kind of securities for them to invest in. They can't buy common stock; they can't buy the commodity, which is Bitcoin.
Even though Bitcoin's percentage returns are 81.9%, they're on the bottom. You can see many of these bonds have actually performed not quite as well as Bitcoin. However, the holders of those bonds are still happy. The ones that have actually outperformed Bitcoin have done so well because the demand for these bonds has been so incredibly high.
As they issue more bonds and more securities, maybe that will change the kinds of returns we see in the future for these convertible bondholders. But no matter the case, we know that there is going to be more demand for these bonds because we can see dramatically how much more they've outperformed Bitcoin and even MicroStrategy stock.
If we go back to performance here with a different chart since August of 2020, we were looking at annualized performance just a moment ago. The average annualized performance is 106% a year for MicroStrategy. If we look at the total return since August of 2020, there is a 2,400% return for MicroStrategy stock.
Now, Nvidia has had an incredible run, and Tesla has also had a pretty good run. Many other major corporations have had really good runs, but it's very difficult to compete with Bitcoin. Even if we're only looking at Bitcoin here, it pretty well crushes all of the competition. The only two things on this chart that have done better than Bitcoin are Nvidia in the height of an AI frenzy.
Maybe you say it's a bubble; maybe you don't. But whatever the case, it's objectively true that Nvidia has had an exceptional period of time, and MicroStrategy, of course, has outperformed Bitcoin. This is just a historical precedent of what we're looking at here.
Now, if we were to rank companies by market cap, their total market capitalization, this is where we are. This is how far of a leg we have to go. MicroStrategy is worth $80 billion, as you can see on the bottom right of the screen here. On the left-hand side, we have the major corporations: Apple, Nvidia, Microsoft, Google, Amazon, Facebook, Tesla, and a few others.
I'm not sure what AVGO is, but we have the Magnificent Seven, we have Bitcoin, and there's a long way to go. It is a 30X for MicroStrategy to then couple Apple. Now, I think a lot of people would ask, "Well, why on Earth would MicroStrategy eventually be bigger than Apple?" Everyone has an iPhone; not everybody needs a convertible bond for Bitcoin.
However, if we just look at this from a wider perspective, what is MicroStrategy doing? MicroStrategy is trying to become the monopoly of non-Bitcoin securities for the entire United States. I would argue that is a value proposition that is one of the largest values in the entire world.
Now, I should give a caveat here that MicroStrategy stock is not Bitcoin. You should be owning the underlying collateral; you should be owning self-custody Bitcoin. If you're going to choose between owning the stock and owning the underlying asset that powers the stock, you should own the underlying asset. I cannot emphasize this enough.
Yes, MicroStrategy might outperform Bitcoin, but MicroStrategy is an altcoin. MicroStrategy is not Bitcoin. I'm a fan of Saylor; I like Saylor. I've met Saylor multiple times. I've spent time with Saylor. I like him; I support him. I've watched hundreds of hours of his videos, and I've reacted to many of them on this channel.
But I have to emphasize that if you think that you're getting all the benefits of Bitcoin just by holding MicroStrategy shares, I'm telling you that you aren't. The volatility is going to benefit you on the way up, and it's probably going to cut you on the way down. You have to own the underlying asset because the risks you're taking with MicroStrategy, as small as you may feel they are, you still are taking risks of different kinds.
You have to understand that MicroStrategy is significantly higher risk than Bitcoin. I think right now the risks are on your side, but when the market goes down again, you have to remember that nothing beats self-custody Bitcoin. Michael Saylor himself encourages people to buy Bitcoin over his stock. Obviously, he can't promote his own stock given regulations, but the point is that the movement here, the revolution here, is Bitcoin. It's not Michael Saylor; it's not MicroStrategy.
MicroStrategy and Michael Saylor are a segment under the Bitcoin revolution. Getting back to this, the small company on a future technological standard is probably worth more than the largest company on an old technological standard. The smallest company from the 20th century is worth way more than the largest company from the 18th century.
I think the same idea is going to be revealed here. MicroStrategy, as small and tiny and cute and adorable as it is right now compared to the giants and behemoths of the global and American stock market, as small as it may seem, I think it's going to grow way larger than these companies unless those companies decide to also embrace a Bitcoin standard.
But it seems like that is many, many years away for most of these companies. In the same way that Bitcoin is already one of the world's 10 largest assets despite not even having 1% of the world using it, I think it's going to be the same thing with MicroStrategy. I think it's going to shock people when Bitcoin is already the world's largest asset with 1% to 2% global usage and adoption.
But I think that's what we're going to see. The smallest company on the light bulb standard is worth way more than the largest company on the candle standard. It's just how it goes. Bitcoin is going to be one of the world's largest assets despite being one of the assets with the lowest amount of adoption because every new user on the Bitcoin network effect has a larger per capita economic impact than the average per capita user in the fiat political currency system.
Now, let's get to something that Michael Saylor has talked about extensively, which is Bitcoin yield. This is something that, to Michael, is very, very important. This gets back into our price prediction of a $4,000 MicroStrategy share, which we'll get to in just a moment.
If you look here, you can see that the Bitcoin yield is exceedingly high for 2024. This is what Michael Saylor is focused on, focused on, and obsessed over. He wants to get this number as high as possible as quickly as possible by stacking as many Bitcoin as possible because he knows, like I was saying earlier, this is not sustainable forever.
MicroStrategy cannot sustain a 74.3% Bitcoin yield indefinitely for every year. It's just not possible. I know a lot of people are bullish that, "Oh, he's going to buy a bunch more. He's going to get to half a million. He's going to get to three-quarters of a million. He's going to get to a million Bitcoin. Oh, MicroStrategy to the moon!" I hear you; I get that.
I think Saylor has a long way to go. I think we have years to go. However, if something cannot last forever, it will end, and this will end. This opportunity will not last forever. You're never too late to Bitcoin, but there will be a point in time where there inherently must be diminishing returns for the BTC yield for MicroStrategy.
He is trying to get as many coins as he possibly can and make sure that he keeps that yield as high as he possibly can for as long as he possibly can. Why? Because you want as many Satoshis per share as possible. If you were buying one MicroStrategy share in 2020, you were getting just under 60,000 Satoshis. If you were buying one MicroStrategy share in 2024, now you're getting 160,000 Satoshis—almost exactly 100,000 Satoshis more.
For those that don't know, 100,000 Satoshis is approximately one-thousandth of one Bitcoin. By the way, if you do not have any Bitcoin, feel free to text me. If you do not even have 100,000 Satoshis yet, text Luke. Here's my number: text me, and I will send you free Bitcoin. Just text me your name and say, "Get off zero" or something.
If you are somebody that has no Bitcoin, you're new to Bitcoin, or more importantly, if you're somebody that only has MicroStrategy, for goodness sakes, you have to get some actual Bitcoin. So text me; I will send you your first amount of Bitcoin, whether that's a few thousand Satoshis, 100,000, whatever it is. I will send you some Bitcoin if you text me and tell me this is your "getting off zero" moment. Feel free to ask me a question, reach out, whatever.
The point is, you're not actually buying the Satoshis if you're buying the MicroStrategy share. You are buying the rights to the price appreciation of real Satoshis that are in someone else's control, but you don't actually have that control. So I want to make that very clear. Yes, MicroStrategy stock is probably going to do very well because the number of Satoshis per unit of that security are going up.
But remember, in the same way that political currency is backed by the might of the US dollar, Saylor coin, otherwise known as MicroStrategy, is backed by the underlying amount of Satoshis. At some point, that yield will diminish, and this scenario where you can rely on the number of Satoshis per share doubling every couple of years will eventually end. It has to end someday.
However, it's probably not going to end in the next year because there is a lot of momentum. Look at all that juicy momentum in Q4 of 2024. Look at all those buys. Oh, that's beautiful! Look at all that: November 9th, 17th, 24th, December 1st, 7th, 15th, 22nd, 29th, 30th—buy, buy, buy, buy, buy, buy, buy!
This is what we're looking at. Michael lost a lot of momentum in the later parts of 2021 and early 2022. A lot of people on the left-hand of the bell curve, a lot of people that don't know what they're talking about, would ask, "Oh, Michael Saylor doesn't know what he's talking about. He only buys the top. Why doesn't he buy the bottom? Blah, blah, blah. He's so bad at timing the market."
They don't understand that he can only buy as a function of having the capital available to him. Michael Saylor's not stupid. Obviously, he knew that he'd be better off buying at the bottom of the market, but he just didn't have the capital. It's a shame, but that's just the reality of it.
Right now, in late 2024 and now in early and mid-2025, he has a lot more demand, so he's able to buy more Bitcoin. This is exactly why he lost all kinds of momentum in the bear market of 2022, and now he has been gaining momentum recently. He's been gaining momentum at a monumental scale, and I think that momentum is going to continue again until eventually, the momentum has to run out.
So, we're going to compare some growth rates as well. Again, momentum is trending up. There is more and more momentum since the bear market in late 2022. If we're looking at open interest, trying to figure out how many options are open when it comes to MicroStrategy, many people are trading it.
Again, look at all that volume. MicroStrategy, tiny little baby MicroStrategy, right now has less than a billion dollars less of open interest than Amazon. Everybody uses Amazon. Amazon is a tech monstrosity; it's a mega-corp. Yet tiny little MicroStrategy, by comparison, has almost as many options open as Amazon. In fact, it's got way more than Palantir.
Of course, obviously, Tesla and Nvidia are three to five times larger than MicroStrategy. However, again, for the market cap, people are craving that volatility. People are craving the volatility of Bitcoin in a heightened Bitcoin proxy in a monopoly that is issuing all kinds of securities and debt for Bitcoin.
This is MicroStrategy's current debt structure. If you want to learn more about that, they have a strong capital structure at this time, totaling $7.26 billion, with a weighted average interest rate of—get ready for this—less than half a percent. If you're buying MicroStrategy shares, that's basically what you're doing.
You could borrow to buy Bitcoin, and actually, in many cases, I think that's not a bad idea. If you're going to borrow money to buy Bitcoin, I'm not saying you should do that, but I know a lot of you are. I know a lot of people take out mortgages or 0% interest credit cards or different kinds of loans to buy Bitcoin.
If you were going to do that, I'm not saying you should, but if you were going to do that, I strongly recommend you consider a multisig for that Bitcoin. The only people I have ever seen that get really, really burnt when they borrow money to buy Bitcoin are the people that go all in on some sort of Bitcoin proxy, whether that's MicroStrategy, a mining company, or something else.
Because the volatility cuts both ways, and there's way more uncertainty with those proxies than with Bitcoin itself. The other people that get really burnt when they actually borrow money to buy Bitcoin are the people that buy it, put it on Coinbase, and then somebody steals it off of their Coinbase account. Or they put it into self-custody, but they make a mistake with their self-custody.
Again, this is the huge emphasis I would have. If you are considering borrowing money to buy Bitcoin, your biggest cost is not the interest rate. It doesn't really matter if the interest rate is 3%, 5%, or even 10%. The big risk you have if you were going to borrow money to buy Bitcoin, of course, first of all, is your ability to service that debt.
But just as importantly, and I would argue potentially even more importantly, the big risk is the underlying loss of the asset. Please, for goodness sakes, if you're going to borrow to buy Bitcoin, don't go in MicroStrategy. Don't go all in on super-leveraged long options or whatever on MicroStrategy.
I would strongly suggest putting it in self-custody, proper self-custody with multisig, with zero single point failure. That is your big cost. If you need help with doing that, obviously, you can feel free to reach out to me. Text me and say, "Hey, I'm somebody that's looking to borrow money." I'm not encouraging you to do that, but if you are going to do that, if you are going to take that risk, please, for goodness sakes, reach out.
Because if you don't reach out, there is a very real non-zero chance, you know, 5% to 10% chance in a year or so, you're going to reach out, and you're going to be in a much, much worse position.
So my point in all this is to say that if you're not borrowing money to buy Bitcoin yourself, the next best thing you could do is buy MicroStrategy shares. Because unlike you, Michael Saylor is able to borrow at sub-half percent interest rates. Michael Saylor is doing the self-custody route for his company, MicroStrategy.
Obviously, you don't get the benefits of that self-custody, but the point is that in the same way that MicroStrategy cannot afford the risk of losing that Bitcoin, you have to also make sure that your Bitcoin is protected.
If you need a Bitcoin OTC desk, if you need a Bitcoin multisig, if you need a Bitcoin self-custody IRA, or you want to talk through tax strategy for an OTC desk, I probably should have put this in there. For an OTC desk, if you're going to buy more than $50,000 worth of Bitcoin, you're probably going to be hurting yourself if you buy on a typical exchange.
So if for any reason you want to make sure you're ending up with as much Bitcoin as possible and reducing your risk as much as possible, text the phone number on the screen with your name, email, and questions you have. I'll be more than happy to help.
But again, the larger point I'm trying to get here is that if you can't borrow money to buy Bitcoin yourself, buying MicroStrategy shares, you are getting all of the benefits of cheaper interest rates plus all the risks of not being able to have self-custody Bitcoin with counterparty risk.
For some of you, that's a trade-off you're willing to make. For others of you, it's probably not the trade-off you should make. I'm just clarifying what those trade-offs are. If you're going to borrow money, you're probably going to be paying an interest rate 10 times higher. However, the counterparty risk is literally infinitely less with self-custody Bitcoin.
So that's the current debt structure of MicroStrategy. Feel free to pause the video and read through that more if you want.
Shares per Bitcoin: how many MicroStrategy shares does it take to get one Bitcoin? It's a very common question. Like, "Hey, how many shares is it going to need to get one Bitcoin or a tenth of a Bitcoin or 10 Bitcoin or whatever your particular number is?"
This is how many it takes: diluted shares versus outstanding shares. It used to be a couple thousand. It used to take two or three thousand MicroStrategy shares to get to one Bitcoin. Then it fell down to 900 to 1,200 or so shares, and it was pretty flat for more than a year.
But now, right now, it takes roughly 600 shares equivalent to buy one Bitcoin. Now, again, there's a big difference there. The benefit is that you get some degree of BTC yield—that's the benefit. Maybe if you have one Bitcoin worth of MicroStrategy shares, you might get another 20 million Satoshis or so. You might get another whole Bitcoin in the next couple of years if they double their Bitcoin stack up to a million Bitcoin.
But you're probably not going to quadruple it; you're probably not going to 10x it. And you're accepting all the counterparty risk of MicroStrategy. I'm saying this as somebody that owns MicroStrategy. I'm saying this as somebody that's been buying MicroStrategy for years.
But you have to keep that in mind that you are taking on a different set of risks with your trade-offs. It's okay to have different sets of risks with your trade-offs. However, you have to make sure you actually understand what those risks are.
Nothing in life is free. You don't get all the benefits of MicroStrategy without some sort of cost.
Now, we already looked at convertible bond performance, so I really want to get to earnings per share and price-to-earnings ratios because this is arguably one of the most important charts we are going to be looking at here.
We are transitioning from MicroStrategy not yet being on the S&P 500 into now it is very likely going to be introduced into the S&P 500. That is largely because of FASB accounting, and that has massive implications on the share price for MicroStrategy as the market begins to realize what's actually going on here.
Now, right before we get to that, I want to share something with you because I know a lot of you, if you're watching this far in the video, you're probably fans of my work. Thank you; I appreciate it. Subscribe, do all that wonderful stuff. You're probably even more a fan of Michael Saylor, and one of the best chances to meet Michael Saylor in all of 2025 is going to be in Prague at a very awesome Bitcoin conference.
I highly recommend you check it out. Information is in the link in the description below if you want to sign up for the Prague conference. However, to go even one step further, if you're going to make the trip and go out there anyway, something I would strongly recommend you consider is a Bitcoin retreat.
I am hosting a Bitcoin retreat immediately surrounding the Bitcoin Prague event. There are going to be about 8,000 people at the Bitcoin Prague conference. Michael Saylor is almost certain to be there.
What I'm talking about here is a side event retreat that you'll be able to hang out with me and another 10 to 15 other Bitcoiners, including some of the other speakers from the Bitcoin Prague conference. I love doing these things because you get to actually explore Prague with fellow Bitcoiners and not just on your own.
You get to meet special guests in an intimate setting. Instead of getting two minutes to talk to one of your favorite Bitcoin speakers in front of some booth in some giant warehouse, you get to have dinner with them in literally one of the most beautiful scenic flats in all of Prague.
This isn't for everyone. Obviously, this is a bigger budget kind of trip. You may not be able to do that. However, if you want to meet some of your favorite Bitcoiners and you want to actually have time with other Bitcoiners, I think it's a really, really great opportunity.
We're going to have hot tubs, we're going to have sky views just like the ones that you're seeing on the screen here. We're going to have a private chef, and we're going to have some tours with an intimate group of 10 to 15 Bitcoiners, including myself, you, and a few other people. Your logistics are covered.
If you get a VIP ticket to the conference and join this retreat, you have a very, very strong probability of yourself meeting Michael Saylor, Adam Back, Jack Mers, and dozens of other speakers in person, hanging out with them, asking them questions, and spending a little bit of time with them.
So, obviously, I think this is a great opportunity. I highly encourage you to consider that. The cost is a few thousand, depending on how many days you're wanting to join for the retreat. Again, text the phone number on the screen with your name, email, and questions. Let me know you have an interest in joining, and I would love to have you join.
I had another two people join the trip and make their deposit in the last 48 hours here, so the spots are going to fill up pretty quickly. 8,000 people are going to the event, and this event is limited to 10 to 20 people. So, there's going to be some kind of scarcity with it.
Believe it or not, this is probably one of your last chances to join this trip, which is why I'm making this in this video here. Again, it's first come, first serve. I'm inviting every single person that comes to this event. I'm not just putting it on a website where people can just randomly buy tickets. I want to get to know every person that's coming to this event.
So please, text me. You can find information in the link in the description below. I would love to have you join in Prague in 2025, and maybe by that time, MicroStrategy shares will be $1,000 or $2,000 a share. It's going to be a really fun time to enjoy the bull market gains with each other.
So anyway, back to the PE and FASB because this is really what you've clicked on the video for. This is what I think is going to be the big, massive, monumental catalyst for MicroStrategy shares in 2025: FASB accounting.
So far, for all of MicroStrategy's history being on a Bitcoin standard, investors have looked at it and said, "Eh, it's a crappy company. They're losing money. They're not making that much money. Even if they are making money, they're making so little money compared to the market cap of their company."
They don't understand what's actually going on here. They're only looking at NAV; they're not looking at P&L. However, with FASB accounting—fair accounting bookkeeping—that's going to help it be included in the S&P 500. That greatly improves the probability—not a certainty, but it greatly improves the probability—that investors are going to look at this and say, "You know, I may not like Bitcoin. Bitcoin might be crazy, but you know what? They do have a BTC yield. Bitcoin is an institutionalized asset now. Even if I'm not a fan of Bitcoin myself, I can't help but admit this company is undervalued because their P/E is in the dirt right now."
So if we actually plug in the specific practical numbers here, this is what we are looking at. I'm going to scroll down below estimated earnings per share. You can pause the screen if you want to look at that or go to SailorCharts.com yourself to check it out.
However, this is, I think, the really, really important thing. The Bitcoin price right now, at the time of recording, is about $94,000. With a P/E ratio of approximately 8X, that would give an implied stock price of about $332, which guess what? Is almost exactly the price that MicroStrategy shares are at right now.
However, most people are still looking at MicroStrategy shares as if NAV is the most important metric to look at. If we compare this, I think one of the best comparisons to MicroStrategy shares is that of Tesla shares from that mega run in 2019 and 2020.
Tesla shares obviously had a big run back in 2013 or so, and then they had an even more famous or infamous run in 2019 and 2020, where it was one of the most hated rallies in all of Wall Street history. Tesla stock was shorted like crazy.
What other stock is being shorted like crazy? That's right, MicroStrategy. MicroStrategy is being shorted like crazy. Lots and lots of people are shorting the company, saying it's a Ponzi. This thing surely has to go down. But you know what? They're failing to understand that if Bitcoin goes up, it doesn't matter. Even if MicroStrategy underperforms Bitcoin, the share price is still going up.
The NAV for MicroStrategy shares could still plummet. This whole P&L discussion could be completely irrelevant. But if Bitcoin doubles from here, it's irrelevant. If we just look at this, if the price of Bitcoin were to double up to $200,000—which I know some of you are going to come at me and say, "Oh Luke, you're such a bear," and I get it. I'm being a bear right now because I think we need to have a bit of nuance and conservatism here.
But the point is, even in a hyper-conservative scenario where Bitcoin only doubles and the P/E ratio stays at only 8X, if we were to price it based on a P/E, that's still a stock price 4X, 6X, whatever that is higher than it is today. That's what people don't understand.
All these people shorting MicroStrategy, in a very similar vein, were shorting Tesla stock because they didn't actually understand what was going on. Tesla is an AI company; Tesla is not a car company. Investors didn't understand that, and the stock was repriced to an entirely new floor. The floor was raised in the course of 6 to 12 months, and I think we're going to see a very similar kind of thing here.
The perception of MicroStrategy is about to shift from "Ponzi scheme, Michael Saylor, garbage company, dumpster fire" into "non-zero chance this is going to be a Bitcoin monopoly for the next century." That's a massive, massive mispricing by the market. Honestly, I think it is the largest mispricing in the entire world other than Bitcoin itself because that's really what Bitcoin's going through.
Bitcoin itself is going through repricing as well. Most people are short Bitcoin, even if they aren't technically short in the same way some open up a short against MicroStrategy or Tesla. They're short by hoarding dollars and basically looking at Bitcoin like a magic internet Beanie Baby when, in reality, it is the monetary singularity and apex property of the human race.
The same thing, to a lesser degree, with MicroStrategy. I think the potential here is really, really dramatic. If we go back and look at the price-to-earnings of Tesla, not just in the present moment but over time, we could see down here the P/E ratio.
Back in the very early days, it was very, very low because Tesla wasn't really profitable, and then it skyrocketed in 2020 with the bubble. The local bubble that happened for Tesla, right? Because people were front-running and seeing that they were about to become really, really profitable. And they did become really, really profitable, and that P/E became much more grounded.
Obviously, a 1,000 P/E ratio is not sustainable. That might be a little bit of a top signal. That is not sustainable, and so obviously, it has come down to a much less absurd, still quite high and absurd P/E ratio of 112 here in January of 2025.
Let me say that again: Tesla stock went from 1,100 to 112 P/E ratio. You remember what we were looking at just a moment ago back on SailorCharts on the website? We aren't talking about a thousand P/E; we're not even talking about 100. We are looking at an 8X price-to-earnings ratio right now.
Tesla's a good company. I got nothing against Elon. Good for Elon, good for him being all cute with whatever he does with his mega rockets and all that. I think it's great. Go Elon, whatever.
But to be pricing MicroStrategy at an 8X? Let's go back to the current Bitcoin price of, let's say, about $94,000 or so. Just for giggles, if we were going to have a 200X price-to-earnings ratio, that would imply a MicroStrategy stock price of $99,000 per share.
I think that is ridiculous. I do not think we're going to see that next year. I want to make that very clear. I do not think MicroStrategy stock prices are going to increase by a factor of 27X in the next 6 to 12 months. I'm not predicting that.
The point is, I'm trying to set your bias really stupidly high because the possibilities are really stupidly high. If we have a Tesla moment for MicroStrategy, where we have a brief period of time where the P/E ratio skyrockets, again, this is only 200. Tesla got significantly higher in the multiple hundreds.
Even now today, it is sitting between 44 to 112. Let's cool off the hopium here and put that aside. Let's get a little bit grounded to reality. Let's come back from Jupiter and Saturn. Let's just get back to the Moon.
Let's get a little bit back more to reality. Let's reduce the price-to-earnings ratio all the way down significantly. Let's say we just bring it down to a 44. That was the low for Tesla in the last couple of years that we saw.
At the current Bitcoin price, at a 45X price-to-earnings ratio—which again was the low for Tesla stock about a year, year and a half ago in the bear market low of 2020, really closer to 80 and 70—but just for the sake of being a little more conservative, if people were to price MicroStrategy stock at a 45X price-to-earnings ratio based on Bitcoin yield at the current Bitcoin price, that would still be a $22,000 stock price.
I want to make it very clear: I'm not predicting one or the other. I don't know if MicroStrategy is going to $2,000 a share, $9,000 a share, or only $1,500 a share. The point is, no matter how you slice it, it's not going to be $332, which is the current price it is right now.
Maybe it's only $1,000. That's still tripling your money. That's still an absurd return, and that is just with the current Bitcoin price.
Let's assume Bitcoin price only goes up to $200,000. Oh my goodness! There we are back at a $9,000 MicroStrategy share price with a Tesla bear market bottom of a P/E ratio.
Now, obviously, I want to make it very clear there are numerous factors to evaluating a stock, not just the P/E ratio. But again, I'm trying to give an example of why I think this FASB accounting change is such a huge deal that is imminent for MicroStrategy stock.
It may not be imminent, but it is coming. The FASB is imminent; the inclusion in the S&P may not be imminent. I don't want to make people mad by being technically wrong there.
So, the point is, no matter what you have, if you have moderate Bitcoin price increases and moderate P/E ratios, you're still looking at a stock price that is not a moderate increase from here.
Let's be a little bit hyperbolic. Let's say Bitcoin goes to Jeff Ross's target. I think Jeff Ross is brilliant, by the way. Jeff Ross is one of the best-performing hedge fund managers in the world. He closed down his fund, but he's been a huge MicroStrategy bull.
He's a huge fan of Jeff Ross. Jeff Ross thinks Bitcoin is going to $475,000 per coin within the next year, 18 months or so. I would love to see it. I don't know if we're going to see that. I'll believe it when I see it.
But just for giggles, let's throw that in here. If we had a $475,000 Bitcoin in the next one to two years and we had what is Tesla's current price-to-earnings ratio? 112.
Okay, let's look at another major one of those companies we've been talking about multiple times. This is Nvidia. This is Nvidia. We're looking at the stock price. Obviously, it skyrocketed for Nvidia in the last 18 months, especially. It's been one of the only companies that has ever outperformed Bitcoin.
What's the price-to-earnings ratio for Nvidia? It's significantly lower than Tesla; it's 58. So let's say that we go a bit somewhere in between Tesla and Nvidia, and let's say that we go to, oh, 70 or so.
If we have a 70X price-to-earnings ratio with a $475,000 Bitcoin, MicroStrategy and Michael Saylor would be in such a mega green, orange bull market, mega candle for profits that that would be a $45,000 implied stock price for MicroStrategy stock.
It's just ridiculous. It's nonsensical. My point in saying this again, I want to say it again because of how stupidly absurd it is, is that I am not saying you should expect a $45,000 MicroStrategy share price next year. I'm not saying you should expect that.
I think a $475,000 Bitcoin is a very optimistic stretch. I think a 70X P/E ratio is maybe an even bigger optimistic stretch. Even if neither of those happen, that doesn't mean people are rational and actually price it like. I'm not saying that's reasonable.
I'm well aware the market cap for MicroStrategy would be in so many trillions of dollars if that happened. The larger point I'm making here is that you don't have to have a $45,000 MicroStrategy share price to change your life.
All you need is a $1,000 MicroStrategy share price to probably change your life. All you need is a 1% chance of this being 10% correct for it to change your life. That's my point.
No matter how you slice it, even if we are only partially, marginally, in a tiny, tiny bit correct, the direction is going to be so stupidly up that it doesn't matter what you look at.
Now, let's come back to reality here. Let's be a little more realistic. People are probably going to have a much harder time wrapping their heads around Bitcoin yield than traditional cash flows. That's just the obvious truth.
So, price-to-earnings, I think, is going to be significantly lower than what some of the hyper bulls are expecting. Let's assume we're a mega optimist at 20X. Let's assume that Bitcoin only doubles from here.
Let's assume that this isn't going to be a super cycle; it's going to be typical for your cycle. Maybe you disagree with me; you can plug in your own numbers. But my point is, let's be a lot more realistic—literally 10 times more realistic here or bearish for the sake of being grounded.
Even with Bitcoin at $200,000, only a doubling from here and a price-to-earnings ratio of 20X, that is still a 10X from here. That's still over a 10X in MicroStrategy share price from here.
Really, what we're showing here is much less about MicroStrategy growing in value. Really, what we're showing a lot more of is just how stupidly overvalued the stock market is. The entire stock market is overvalued, but especially these magnificent seven mega growth companies.
If MicroStrategy were to be priced like a mega company, like one of those, even just partially, you still get these stupid returns. Again, this is not going to last forever. This is not going to happen forever.
Obviously, the stock market in Bitcoin terms is not going to be overvalued forever. Maybe we don't see MicroStrategy shares skyrocket; maybe we see them do really well and other stocks fall.
If investors realize, "Oh my goodness, Bitcoin's the future," these price-to-earnings ratios for Tesla, Nvidia, and all these other companies make no sense. Let's lower that while MicroStrategy is coming up.
Your upside in MicroStrategy might be significantly less because everything's being demonetized into Bitcoin. I make that very clear. The opportunity in MicroStrategy is this window of time where we have a massive overvaluation of the stock market in general and a massive undervaluation of Bitcoin.
MicroStrategy is that Trojan horse in the middle of the Venn diagram where you get to capitalize and be an opportunistic investor on taking advantage of all that juicy monetary premium in the stock market and watch it being flowed into Bitcoin via the channel, the pipe, the fiber that is MicroStrategy stock.
So my point is, you probably should have some degree of an exit plan for MicroStrategy. That's not very popular to say. I always get critiques when I say it, but again, I want to say what you need to hear, not necessarily what you want to hear.
You should probably have some degree of an exit strategy from MicroStrategy at some point in the future, especially for goodness sakes if you don't have any Bitcoin self-custody. That's a little risky.
Maybe that means you sell the top in the next year or two. Maybe that means you huddle onto it for a decade. Whatever your plan is, I just want to make it very clear: you are not too late to Bitcoin. Bitcoin is going up forever.
Bitcoin is the exit strategy, and while MicroStrategy is probably going to have a very, very awesome time against Bitcoin, I think the odds are very high that at some point, if MicroStrategy gets a massive kick when it sells with that stock market overvalued premium flowing into MicroStrategy, eventually, as stocks get demonetized into Bitcoin, it's going to return back to Bitcoin as all the other companies copy MicroStrategy.
If you are going to do that, the time to have that conversation is right now. I know that we could be looking at another 3X, 5X, 10X, whatever it is for MicroStrategy shares.
Even if we have a lower P/E, even if we're only looking at a $500 or $2,000 MicroStrategy share price, whatever it is, even if we're only looking at that, you still have to now begin thinking about your exit plan.
Maybe you are going to be somebody that's going to pursue more risk, meaning that you're going to try to time the top and exit MicroStrategy stock into US dollars and ride the bear market. I don't think that's the worst idea in the world because even if Bitcoin has a muted bear market in this upcoming bear market—let's say a 40% to 60% bear market—even in that case, MicroStrategy shares are probably still going to fall 50% to 75%.
MicroStrategy shares just in the last month or two have fallen by approximately 50%. Just in the last year or so, MicroStrategy shares fell from over $500 at the peak, all the way down to under $300.
If MicroStrategy shares could fall 50% in the course of a month during a bull market, it's absolutely going to fall probably 70% to 80% in a Bitcoin bear market, even if that Bitcoin bear market is muted.
So even if you're a mega bull and you think the traditional four-year cycle is dead, MicroStrategy is probably still going to have some cycles. It's not going to be only vertically up. MicroStrategy is selling volatility on both sides of the trade.
So maybe you're somebody that wants to have some percentage of your MicroStrategy go into cash. Maybe you want some other percentage to go into self-custody Bitcoin. That may not be a bad plan after all.
If you are actually intellectually consistent and you want your MicroStrategy shares to be eventually converted back into Bitcoin, a bull market top when MicroStrategy is probably really overvalued in terms of Bitcoin is probably not the worst time in the world to do it.
Now, maybe you're going to go all in one of these to the other. Maybe you're going to try to sell all your MicroStrategy for dollars. Maybe you're going to try to sell all your MicroStrategy for Bitcoin. But whatever the case, most of you are probably going to have some allocation to both.
So it's critical to begin planning that now. If you are somebody that owns MicroStrategy, you probably do that in part because you're a little nervous about taking self-custody of your Bitcoin.
My strong recommendation is that if you are somebody that has a MicroStrategy portfolio, you have to remember you're probably going to be witnessing a 3X to 10X in that MicroStrategy net worth in the next year or two, in my opinion.
If and when that happens, you're going to want to convert some significant percentage of that into Bitcoin and think about that dollar amount, whatever that is. You want to make sure you get this right the first time without losing that Bitcoin.
If you're somebody that was more prone to invest in MicroStrategy, you're probably already somebody that's a little nervous about taking self-custody of your Bitcoin.
The big thing, in my opinion, in my experience personally and anecdotally after having talked to a thousand-plus people about Bitcoin and being obsessed with this market for years, speed is everything at the top.
You cannot start talking about your exit strategy when you are at the top. You need to plan right now. You have very real questions. If you were going to convert funds from MicroStrategy shares into self-custody Bitcoin, the time you're out of the market is precious.
If it takes a week for your brokerage accounts to convert from Bitcoin to self-custody, from MicroStrategy to self-custody Bitcoin, if you're out of the market for a week, that is exceedingly painful. That might be a 30% mistake on your capital.
You need to make sure you have the proper desks and processes set up in advance so that when the time comes, you can make a same-day move in an instant.
Because what most people do, unfortunately, is they cop out to an ETF. I strongly recommend you don't do that. I highly encourage Bitcoin self-custody.
Every hour, every day of the mega, mega FOMO Bitcoin bull market really matters. It's the same kind of idea with the GameStop short squeeze. It's entirely possible we might have a short squeeze with MicroStrategy. Maybe we don't; I'm not promising anything.
But if we do, every moment matters. You cannot delay this for a couple of days. You have to plan these things now because guess what? 90% of you listening to me right now aren't going to plan this, and all 90% of you are going to reach out to me literally in the same week when this thing really goes parabolic.
For the 10% of you that are actually smart and care about preserving what you worked so hard to learn about and grow your wealth in, if you take action now, you're going to be ahead of those 90% because you and the 10% have six months to prepare when the 90% of the procrastinators are going to realize, "Whoa, I'm up 10X on my MicroStrategy shares, and I think I should do this. I don't really have a plan. What do you think I should do?"
Those people will be fine because obviously, they're riding up the wave, but they're going to lose a third of all the gains that they made because of some stupid mistake.
Every hour, every day matters in that bull market top. So if you are somebody that either right now or in the future is highly considering buying a significant amount of Bitcoin—let's say you have $100,000 worth of MicroStrategy. Let's say it goes to a third of a million or half a million next year.
You're probably going to want to buy at least $50,000 of Bitcoin just to take profits from that MicroStrategy trade. You're probably going to want an OTC desk. Your bank or your brokerage is not going to be very happy if they see that you're making large withdrawals to a Bitcoin exchange.
They're going to flag it and say that you're some sort of terrorist or we're reviewing it. They're going to freeze your account for a day or a week. In some cases, I've seen even longer. You want to avoid that at all costs, and of course, you also want to save on your exchange fees.
If you're somebody either now or in the future that is looking to buy over $50,000 worth of Bitcoin, I highly recommend you consider the possibility of having an OTC desk at your disposal because that's going to make it a lot faster. The fees are going to be cheaper, and again, time is money.
A same-day transfer via an OTC desk is worth its weight in gold when compared to a three-day transfer when it comes to a traditional bank transfer. If you are going to do Bitcoin self-custody, I strongly recommend you do a Bitcoin multisig.
This is something I help people with. I work at the Bitcoin Advisor with my team of 40 people. This is something we're obsessed about. We want to help you reduce your risk with your Bitcoin.
The last thing we want to see is you ride the wave and convert half your MicroStrategy proceeds into Bitcoin, and then somebody steals 10% of those funds. That's a really, really painful moment. We want you to have all the benefits of self-custody Bitcoin without all the risks of making a mistake yourself, being a target against a $5 attack, or making some sort of error that causes you to lose that Bitcoin.
If you have MicroStrategy in a 401(k) or in a Roth IRA or some other kind of pension, in particular in the United States, but also available for other countries like Australia, the UK, etc., it is possible to take self-custody Bitcoin within your IRA.
You do not have to choose between withdrawing and paying a major tax and taking it to self-custody or keeping an ETF in the IRA. You can have self-custody Bitcoin within the IRA. If you are going to take profits from MicroStrategy into Bitcoin at the top of the market, whatever you think that is, then I highly encourage you to consider setting up the IRA now, putting some money in the IRA now.
Because even though you're not trying to necessarily exit to that yet, you want to be ready. You want to be absolutely ready to make that transition as fast as possible when the market is in a hyperbolic stage.
If you're somebody that just wants to talk through tax strategy, I'm more than happy to help. As I say, everything in life is a trade-off. If this MicroStrategy bull thesis is true, you're probably going to be facing one of your largest tax bills in your life in the next year or two.
A single couple percentage reduction of that tax bill could potentially save you thousands, if not tens of thousands of dollars. So if you want to talk about the different options you have with the different MicroStrategy project securities out there—MSTX, MSTY, etc.—if you want to have a conversation about what MicroStrategy securities are available and what kind of other tax havens and structures are available, it is very easy to avoid a significant portion of the taxes that you're going to be facing with simple tax planning.
So I'm happy to talk about that strategy.
Also, of course, if you want to talk about cycle strategy, I'm happy to have that conversation. You know, like I said, I've got 40 people on my team at the Bitcoin Advisor. We literally have 10,000 conversations a year with people.
We have 40 people on the team. We work pretty much every day, all day. It's pretty self-evident what's going on here. We're not saying that we're smarter than you; we're not saying we're right. But we are saying that we have way more experience than you.
That's not to say you don't have experience; it's just that you can't compete with us. We've got 40 people on our team all day, every day, full-time, obsessing over Bitcoin, MicroStrategy, and talking to all kinds of people with all kinds of levels of net worth, ranging from people with their first thousand to people with $100 million or more worth of Bitcoin.
We don't know everything, but we do everything we can to know as much as possible. So if you want to have a trusted partner with you, a team member alongside you, incentivized to help you end up with as much Bitcoin as possible, it is my job to help people determine what is the best procedure to help them maximize their cycle strategy.
I'm not saying trading. I make that very clear. I'm not a trader. I never advocate for trading. I'm not trading my MicroStrategy shares. I'll take some off the top of my MicroStrategy because MicroStrategy is an altcoin.
But I make that very clear: that's not trading. I'm not saying trading. Don't come to me for trading advice; I will ignore you. But if you're somebody that's just an average everyday person saying, "You know, I'm probably going to be sitting on six, seven, or eight figures worth of MicroStrategy or Bitcoin in the next couple of years, and I really want to make sure I get my tax planning done. I really want to make sure I get my Bitcoin self-custody," all that stuff, feel free to reach out.
Is all this shameless self-promotion? Absolutely it is. However, I also think it's very true. I've got 12,000 people that are now near 13,000 people that follow me on YouTube here, another 35,000 to 40,000 people on Twitter.
I will only be able to help a couple hundred people, and those people are going to be willing to pay for that insight, not because I'm a genius and I know everything, but because it is limited.
If you want to be one of the limited people that is able to have these kinds of things available for them, text the phone number on the screen. Let me know which of these things, or all these things, that you're interested in. Let me know your name, let me know what questions you have, and let me know how I can contact you.
I'd be more than happy to discuss these things with you. Again, the time is now. Even though MicroStrategy stock price may have a 5X to 10X from here, we're looking at six to 18 months. It's going to go so fast; it's going to go so quick.
You have to plan these things right now if you're actually going to maximize the kinds of potential returns you could be seeing in MicroStrategy shares, whether that's $2,000 or $5,000 a share. You have to begin planning these things.
So feel free to reach out, feel free to have those conversations, and I highly recommend you check out SailorCharts.com. Again, I make it very clear: nothing I've said in this video is specific financial advice. I don't know what's going on with you in your life circumstance.
I'm just saying if MicroStrategy stock were to have even marginal price-to-earnings comparables to other major growth companies, we looked at many, many examples of how already MicroStrategy is comparable to these growth companies.
If we were just to have comparable price-to-earnings, we are looking at a MicroStrategy stock price significantly, significantly higher than the current stock price. Again, I highly encourage you to take self-custody of that Bitcoin.
For me, I own MicroStrategy shares; it is a small portion of my total Bitcoin exposure. The vast majority of my Bitcoin exposure is in self-custody, various kinds of Bitcoin, single-sig, but almost entirely multisig.
I highly encourage you to begin right now to diversify your Bitcoin holdings and to begin to take self-custody of that Bitcoin so that when you're facing life-changing money within 12 to 18 months, you're going to be able to capitalize on it, and you're not going to ride it all the way back down.
I'm trying to tell you not what you necessarily want to hear, but what you need to hear. Either do this yourself, put in the work yourself, hire me, and I'm more than happy to help you. Or the reality is that you're going to be part of the 90% that don't take this stuff seriously, and you're going to face a 20% to 30% loss because of some stupid tax bill, or you had your money locked up for a week, or you had some other thing that ignored you, or you had some extra fee.
The point is, my goal is to help you end up with as much Bitcoin as possible. Feel free to reach out. I hope this video has been useful, entertaining, informative, and now you have some new resources to check out. I will see you next time. Thanks!