Michael Saylor Reveals Why Bitcoin's Sideways Action Is a Bullish Signal for Big Money Inflows

Michael Saylor on Bitcoin's Market Dynamics

Bitcoin's recent period of muted price action is a sign of strength, not weakness, according to Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy). In a recent episode of Natalie Brunell's "Coin Stories" podcast, Saylor explained that the market is currently in a consolidation phase as long-time holders, or 'OG' hodlers, sell portions of their holdings to fund real-world needs like housing or tuition. This process is paving the way for institutions to enter the market once volatility decreases.

Saylor highlighted that bitcoin is up 99% over the past year, and the reduction in volatility is a positive indicator. He compared this to employees of a high-growth startup liquidating stock options—a natural step toward maturity rather than a loss of faith. This transition is essential for attracting large allocators such as corporations and funds, who prefer lower volatility environments.

Addressing Concerns About Cash Flows

Saylor dismissed concerns that bitcoin's lack of cash flows makes it inferior to traditional investments. He pointed out that many valuable assets, including gold, land, and art, also lack income streams. "The perfect money has no cash flows," he stated, emphasizing that institutions anchored in traditional equity-and-bond frameworks will eventually need to adapt to bitcoin's unique properties.

Beyond Store of Value: Strategy's Innovations

A key focus of the discussion was Strategy's efforts to reengineer credit markets using bitcoin as collateral. Saylor argued that conventional bonds are "yield-starved" and under-collateralized, whereas bitcoin-backed instruments can offer higher yields and lower risk. The firm has developed a suite of preferred-stock products—Strike, Strife, Stride, and Stretch—designed to provide investors with yields of up to 12% while being heavily over-collateralized with bitcoin.

By giving bitcoin cash-flow-like qualities, Strategy aims to integrate it into both credit and equity indexes, broadening institutional adoption and drawing more capital into the ecosystem. "We're giving bitcoin cash flow," Saylor said, framing this as a transformative step for the asset.

The S&P 500 Inclusion Question

Saylor also addressed why Strategy has not yet been included in the S&P 500, despite its scale and profitability. He noted that the firm only became eligible this year due to changes in accounting rules and expects eventual inclusion as the market grows more comfortable with the bitcoin treasury model, which he dates to late 2024.

Future Outlook and Predictions

Looking ahead, Saylor compared the rise of bitcoin treasury companies to the early days of the petrochemical industry, predicting a chaotic but transformative decade with multiple products and business models emerging. He forecasted that bitcoin will continue to appreciate at an average annual rate of 29% over the next two decades, fueling new forms of credit and equity instruments.

In closing, Saylor expressed optimism about bitcoin's role in promoting peace, fairness, and equity in society, suggesting that widespread adoption could reduce online toxicity amplified by bots and paid campaigns.