Fun fact: the only countries that own more Bitcoin than the U.K. are the U.S. (which own 207,000) and China (194,000). The U.K. has 61,000 Bitcoin — worth almost $6 billion.
They are mostly seized Bitcoin, a lucky legacy from the early days when the U.K. was at the heart of Bitcoin's evolution. (Remember, Satoshi Nakamoto wrote in British English, the Times was referenced in the Genesis block, and many of the early conferences and meet-ups happened here.) The FCA, in its wisdom, put a stop to all that, and so we fell behind.
The stupidest thing our Chancellor can do, even with the parlous state of the national finances, is to sell those Bitcoins. History would look back on her as an even greater fool than Gordon Brown for selling the national gold.
This legacy has given the U.K. an extraordinary advantage in the global arms race that is Bitcoin adoption. We would be mad to spurn it.
Meanwhile, something extraordinary is taking place in the corporate world of Bitcoin adoption, and I think it is going to accelerate rapidly very soon.
It is being spearheaded by Michael Saylor, Chairman and Founder of MicroStrategy Inc. (MSTR:NASDAQ).
I recommended MicroStrategy, as it used to be called, to readers back in August 2023, largely because it was a means to get Bitcoin exposure via your broker. You wouldn't have to jump through all the hoops of buying Bitcoin through exchanges, which the FCA has made so difficult.
It has been a big win for readers, having more than 12x'd since we tipped it, outperforming Bitcoin by a considerable margin.
(Bear in mind it has undergone a 10-for-1 stock split since that article.)
Strategy now has some 555,450 Bitcoin, meaning it has more Bitcoin than any other publicly traded company in the world (excluding the ETFs, which now hold 1.35 million).
\Note again: there will only ever be 21 million Bitcoins — rather less if you discount the 2.5 million that have likely been lost, and the 1.3 million that Satoshi never touched and probably never will.
Saylor is also the world's most articulate and charismatic proponent of Bitcoin. The man is a genius, and I do not use that word lightly.
He has turned Strategy from a quiet, business intelligence software firm, which traded sideways for 20 years with a market cap less than $2 billion, into one of the most talked-about and traded stocks in North America with a market cap north of $100 billion. Options traders love it.
His method for doing so — extraordinarily bold at the time, though now it looks easy — was brilliantly simple. He bought Bitcoin. He was worried about the erosion of the value of the corporate treasury due to inflation and currency debasement. He started slowly. Then, in buying Bitcoin and using it, as tends to happen, he caught the Bitcoin bug. He started issuing paper — stock, debt, convertible notes — and bought more Bitcoin. Just last week, he bought another 1,895 Bitcoin, funding the purchase with sales of common and preferred stock.
In effect, he is creating money out of (almost) nothing and using it to buy the hardest money in the history of mankind. (Sorry, goldbugs — and you know I'm on your team — but Bitcoin is harder money, because the supply is more finite).
In doing so, he has enabled many of his investors to retire early.
But he has also set in motion something quite extraordinary.
Other companies are starting to follow his model. I'm surprised more haven't, but it takes extraordinary courage and vision to do what he did, as demonstrated by the fact that more companies haven't copied him. They're too cautious. Even with him having blazed the trail and shown the way.
I think there's a very good chance that Strategy becomes a trillion-dollar company, while Michael Saylor becomes the world's richest man.
To call the pre-Bitcoin Strategy a zombie company is harsh, but it was not really going anywhere. Interestingly, it is zombie or near-zombie companies with large treasuries that are most likely to follow the Saylor model. Their need for a new direction is greater.
Microsoft Corp. (MSFT:NASDAQ) recently gave Saylor five minutes — five minutes! — to pitch his model to them, and duly ignored it.
It is their loss.
But Microsoft is Microsoft.
At the moment, it doesn't need Bitcoin, and it doesn't need to take the risk.
GameStop Corp. (GME:NYSE), on the other hand, is a different matter. Remember GameStop from 2021 and all those memes during lockdown?
The video game retailer had more than 3,000 outlets, and its business model was considered defunct. People buy games online now. But some private investors noted that the short position exceeded 100% of the issued shares of the company, and started buying. The ensuing short squeeze sent the stock from $17 to north of $500, and, it is said, almost broke Wall Street. (Not quite, but you get the point.)
The problem is GameStop's business model is somewhat defunct. This year, it closed over 400 stores. This week, it sold its Canadian outlets.
But the company has about $4.7 billion in cash, low debt, and just raised another $1.5 billion, it announced.
What does it do now?
Bitcoin is the answer.
We don't yet know how much it has bought, but its earnings call is on June 6, so perhaps we can expect an announcement then.
The Japanese company Metaplanet Inc. (3350:TYO; MTPLF:OTCMKTS) is doing something similar. Formerly a zombie hotel company, now known as the "Asian MicroStrategy," it has bought some 5,555 Bitcoin.
It bought another 555 this week after it issued its 13th set of bonds. The stock rose 40% on the news. Since spring 2024, when the company began its strategy, the stock has gone from below ¥20 to north of ¥600.
The same thing is happening as happened to Saylor. Initially, the company bought it as a hedge against currency debasement. It discovered it was onto something. Now it is doing all it can to issue paper — bonds, warrants, stock, you name it — and use the proceeds to buy Bitcoin.
Perhaps GameStop will make a similar discovery.
A year ago, Semler Scientific Inc. (SMLR:NASDAQ), which provides technology products and services for healthcare providers, made its first purchase of Bitcoin: 581.
It couldn't stop accumulating.
Now it has 3,467 Bitcoin.
Sol Strategies Inc (HODL:CSE; CYFRF:OTCQB), my old company, is doing something similar for Solana, having just announced a $500 million convertible note. This company had a market cap of barely CA$20 million a few months ago.
What started as a trickle is starting to flow. The more companies that do this, the bigger the rush is going to get. Corporations are changing they way they store capital. They are changing the capital they store.
The implications for how corporations hold their treasuries are one thing. The implications for fiat money are extraordinary. Issue debt — i.e. create money — and buy hard digital assets with it.
This is going to be a big, big theme in the next few years.
Important Disclosures:
- Dominic Frisby: I, or members of my immediate household or family, own securities of: All. I determined which companies would be included in this article based on my research and understanding of the sector.
- Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
For additional disclosures, please click here.
Dominic Frisby Disclosures: This letter is not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up, especially junior resource stocks. We do not know your personal financial circumstances, only you do. Never speculate with money you can’t afford to lose.
