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Can MicroStrategy Build The Killer App Bitcoin Needs?

The bullish approach by MicroStrategy toward Bitcoin is rather impressive. The company continuously acquires BTC at every dip, even if market conditions may not signal a reversal yet. However, CEO Michael Saylor thinks there are many ways to make money from cryptocurrency holdings. 

MicroStrategy Explores New Options

As a company, MicroStrategy has made numerous headlines with its Bitcoin purchases. It is intriguing to see a public company acquire BTC continually despite the market conditions seeming unfavorable. Moreover, all of these purchases occur in cash, making onlookers wonder how the company intends to profit from this approach. Although a long-term buy-and-hold mentality seems necessary, but that isn’t everything that’s on the table. 

Per CEO Michael Saylor, there are potential ways to generate a yield from its Bitcoin holdings. More specifically, this doesn’t mean the company will stop acquiring BTC either. However, it is essential to keep all options on the table, no matter how the markets may evolve. For a company owning over 122,400 BTC, earning yield can be a rather lucrative option to explore. The company is still in profit on all purchases combined, yielding roughly $2.1 billion in profit. 

One option to generate yield is by having MicroStrategy lend out part of its supply to a trustworthy counterparty. An interesting concept, as decentralized finance is popular primarily due to lending and borrowing. However, finding a trustworthy entity willing and capable of holding those vast amounts of BTC is a different matter. 

Another option is using the BTC reserves to bankroll a partnership with a bank or major technology brand. It is similar to putting a lien on it, although there need to be very strict agreements and rules in such an environment. Option number three is putting a mortgage against its BTC holdings to generate long-term debt, albeit through “favorable circumstances”.

Building For Bitcoin?

Though, most Bitcoin enthusiasts would like to see what MicroStrategy can do for the broader ecosystem. While the position of holding BTC is prominent, it does nothing to entice more people to acquire this cryptocurrency. Building a new application or use case that can take crypto into the mainstream would be a better option, although it is not something anyone can pull off overnight either. Bitcoin has no “killer app,” and no one knows what that might entail either.

For now, MicroStrategy has not committed to any of these options, nor are there any plans on the table either. The thoughts are being entertained, as it is usually smart to put money to good use and generate more money in the process. That is a tricky ordeal where Bitcoin is concerned, as it is a volatile currency with very few use cases.