MicroStrategy’s Bitcoin Standard helped the Nasdaq-listed software company deliver its best quarterly earnings performance since Q3 2016.
The software company adopted its own Bitcoin Standard earlier this summer when it bought 38,250 BTC.
The company spent most of its liquidity on Bitcoin, making BTC the largest part of its treasury. And the strategic move ensured MicroStrategy (MSTR) earned the most lucrative Q3 earnings of any of its direct competitors.
It is MicroStrategy’s highest quarterly earnings since 2016, as profits reached $19.8 million – an increase of 6% year on year ($11.6 million).
MSTR beat the Zack’s Investment Research revenues estimate by a huge margin, too. The software firm posted revenues of $127.41 million for Q3, surpassing the Zack’s Consensus Estimate by a massive 8.65%.
MicroStrategy shares are up about 23% since the start of the year, which compared with the S&P 500’s gain of 5.3% is quite compelling.
MSTR price closed yesterday at $175.58, up from its early August price of $123.52 before announcing it had spent a large amount of its treasury in adopting its Bitcoin Standard.
Since then MicroStrategy has made a second investment and has so far spent $425 million making Bitcoin its primary treasury asset. And its clear the company intends to keep buying Bitcoin.
The quarterly earnings was announced in the Q3 earnings call, as CEO Michael Saylor spent much of it eulogizing about the potential of BTC and explained the reasoning behind MicroStrategy’s Bitcoin Standard.
The call started with MicroStrategy President and CFO Phong Le explaining how the company would be adding to its Bitcoin reserves by deploying any extra cash revenues the company didn’t need for liquidity into buying more BTC.
Li went on to explain how its move to adopt a Bitcoin Standard had improved its reputation, and helped MSTR tap into markets that was otherwise escaping them.
‘Our investment in Bitcoin has also allowed MicroStrategy to tap into the passion of the broader crypto market in a smart sophisticated technologies to advocate for the independent and open markets, whether for a financial assets or digital ones,’ said Phong Li. ‘We’ve seen a notable and unexpected benefit from our investment in Bitcoin in elevating the profile of a company in the broader market.’
CFO Phong Li handed the call over to Michael Saylor who explained MSTR’s position to the shareholders, and made the case for Bitcoin’s future.
Saylor correlated Bitcoin’s potential to a power of ‘monetary energy’ and likened it with the power of Facebook’s network effect.
‘Facebook is a software network to store and channel social energy,’ said Saylor. ‘You see it’s a profoundly new idea. Nobody understood Facebook. They couldn’t conceive of the idea of channeling the social energy of one billion people until after it was done.’
‘Today, I think we all understand the power of collecting the social energy of one billion people on a single software network and channeling it. I think, in time, people will start to understand the power of collecting the monetary energy of one billion individuals or thousands of corporations or banks or billionaires or high net worth individuals or governments.’
‘If we can collect that monetary energy onto a software network and store it and channel it, it becomes something altogether more exciting than just the bar of gold or a virtual bar of gold or a digital-only bar of gold. That becomes a monetary network, and it’s a monetary network, a digital monetary network that doesn’t bleed monetary energy.’
Gigachad Saylor also explained the differences between gold and Bitcoin and explained to shareholders how being an open software protocol made Bitcoin much more valuable, useful and smarter than gold.
‘It’s possible to program [Bitcoin],’ said Saylor. ‘Then the fact that it’s programmable gold or a programmable asset means that it is going to be smarter. It is going to be faster. It is going to be stronger. It is going to be harder than the physical version of itself.’
‘In the same way that Google Maps is a smarter, faster, stronger map than a Rand McNally printed Atlas… I think in that way, virtual gold or Bitcoin is smarter, faster, stronger than a bar of actual gold.’
MicroStrategy shocked even the most ardent Bitcoin Maximalists when it bought 38,250 bitcoins for an aggregate price of $425 million in August and September this year.
But the strategic move by gigachad Saylor and the MicroStrategy board could turn out to be one of the smartest moves by any company in history.
It’s already boosted its quarterly earnings beyond expectation, and the board has announced that it will be buying more bitcoins.
This has perked everyone on Wall Street up even more. And listening to Michael Saylor explain how MicroStrategy sees the Bitcoin network growing will have sparked even more intrigue in the biggest names in the financial industry.
Saylor said it was Bitcoin’s ability preserve and capitalize on the ‘monetary energy’ of all those individuals, corporations, and billionaires that drove MicroStrategy to adopt a Bitcoin Standard.
And that monetary energy is going to stimulate much more interest from all the big players over the coming years as MicroStrategy’s Bitcoin Standard becomes the standard for corporate treasuries.
Author: Tommy Limpitlaw
There is no Bitcoin CEO. There is no central authority that directs or controls Bitcoin. It was created by a pseudonymous programmer Satoshi Nakamoto, but he gave it up to the community, and now all decisions are made by the hundreds of thousands of miners and nodes who work for the Bitcoin network.
Bitcoin is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent.
You can buy Bitcoin in many places in Canada and it’s always good to do some research, as there are some questionable exchanges. Paxful or CEX are two global platforms that allow buyers to purchase Bitcoin in CAD.
You can get rich from Bitcoin, but most people haven’t. Anybody who expects to get rich, especially from a little investment, will likely be disappointed. Bitcoin isn’t a get rich quick scheme, and should be seen as a risky and volatile asset that could bring gains for anybody who can stomach volatility. If you’re interested in and want to buy Bitcoin, you should really have a long term plan.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.
