MicroStrategy CEO Michael Saylor hinted the company may mortgage or lend its bitcoin holdings to generate yield as part of its corporate treasury operations strategy.
MicroStrategy has not taken any formal steps, Saylor said during a virtual investor presentation. MicroStrategy owns 122,478 bitcoin total, of which 13,449 is already collateralized via senior secured and convertible debt at the holding company level. The remaining 109,029 owned by operating unit MacroStrategy – valued at up to $5 billion – is currently not pledged as collateral and thus not generating yield.
“Just like if you have $5 billion in unused parking lots in New York City, one thing you could do is lease or rent the air rights to your neighbors,” Saylor said. Calling its bitcoin holdings “digital property” Saylor added: “If you own property you can develop it, mortgage it or put a lien on it.”
Another strategy Saylor believes presents an opportunity would be a partnership with a company or even a financial institution looking to use its bitcoin for other purposes.
“We could lend our bitcoin to a trustworthy counterparty in some kind of a partnership with a big tech company or a big bank that wants to do something with bitcoin,” Saylor said. “You could think of that as putting a lien on it.”