Saylor predicts Bitcoin above $100,000, says AI will drive demand for irreproducible assets

The nearest catalyst is the MSCI decision on Friday, which may exclude companies like Strategy from its global indices. Even though Saylor downplays its significance, such an exclusion could lead to passive selling of the shares. Strategy's recent openness to selling Bitcoin as well as buying it ends the assumption that the biggest corporate holder is a one-way buyer, potentially adding supply in weaker markets. On the upside, regulatory clarity from US agencies has reduced a major overhang. Bitcoin still vies for capital with AI stocks and Treasury yields that have climbed sharply this year; therefore, a drop in yields after US inflation data would be the most obvious macro tailwind for his $100,000 target.

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Saylor is promoting his own holdings, but his central argument—that artificial intelligence increases the value of scarcity—deserves consideration.

Summary:

• Michael Saylor, Strategy's executive chairman, stated that Bitcoin should rise above $100,000 after bottoming near $60,000 and now trading in the $80,000s, though he did not provide a specific timeframe.
• He said AI will diminish the value of equities dependent on human labor and drive investors to scarce assets like gold, prime real estate, and Bitcoin.
• Saylor pointed to supportive US regulation, faster bank adoption, and tokenisation as new factors, and said the Clarity Act's stalling was beneficial for the industry.
• He defended Strategy's recent Bitcoin sales as part of its structured finance operations, but indicated the company plans to continue increasing its holdings.
• Saylor described MSCI's potential exclusion of Strategy from its indices, to be decided Friday, as a bad precedent but said it is not very important to the firm.

Bitcoin is entering a fresh bull market and should recover above $100,000, according to Strategy co-founder and executive chairman Michael Saylor. He argued that artificial intelligence will steer investors toward assets with fixed supply.

Speaking at DC Fintech Week on Tuesday to Bloomberg Television, Saylor noted that Bitcoin had bottomed just below $60,000 during last year's contraction and has now recovered to the $80,000s. He did not set a timeline for his $100,000 target, remarking that he thinks in centuries, not months. Strategy's long-range projection is for Bitcoin to appreciate 20% to 30% annually over the next two decades.

Scarcity is central to his argument. Saylor said AI will devalue firms that rely on large labor forces or pursue the next breakthrough, while boosting demand for scarce assets like Palm Beach real estate, gold, and Bitcoin. "Investors will look for things robots cannot make more of," he said.

There is some logic to this argument: if AI makes labor and software plentiful, assets with fixed supply could become relatively more attractive. However, it comes from the executive chairman of the largest corporate Bitcoin holder, with a stake he values at over $70 billion. Bloomberg's interviewers also questioned it, pointing out that AI is consuming a large share of market capital and that the rotation toward scarcity has not been evident in Bitcoin, which is still roughly 30% below its record high from last year.

In response, Saylor noted that since Strategy started purchasing Bitcoin in August 2020, the cryptocurrency has delivered roughly 38% annual returns and the company's shares over 50% annually, beating gold and all Magnificent Seven stocks except Nvidia. He acknowledged that Bitcoin is a volatile asset with volatility near 40, while Strategy's shares have volatility around 80.

Saylor highlighted new positive factors: favorable US regulation, accelerated bank adoption, the expansion of tokenised securities, and the growth of digital credit. He said the Senate's inability to pass the Clarity Act was the best result for the industry, because guidance from the Treasury, SEC, and CFTC turned out to be more favorable than the bill's constraints.

Saylor also justified Strategy's sale of a small Bitcoin amount in June, when the price was approximately $73,000, a move that disturbed the market. He described the firm as a structured finance business that needs flexibility to buy or sell Bitcoin, equity, or credit depending on conditions, primarily to support dividends on its credit products. Those products yield 10% to 12% and are treated as a return of capital, which defers taxes, and the company intends to keep adding to its Bitcoin holdings during a bull market.

MSCI will decide Friday whether to remove companies like Strategy from its global indices, citing that they primarily accumulate assets. Saylor termed the proposal a poor precedent, maintained that Strategy is an operating company similar to banks and insurers, and said the decision is not particularly important to the firm.

Explainer: The MSCI, Strategy and index issue

What is MSCI? MSCI is a leading global index provider. Its benchmarks, including the MSCI World and MSCI USA, are followed by trillions of dollars in pension funds, ETFs, and other investment vehicles. When a company is added to or removed from an MSCI index, tracking funds typically must buy or sell the shares, regardless of their opinion on the company.

What is Strategy? Strategy, previously MicroStrategy and traded as MSTR, began as an enterprise software firm. Since August 2020, its focus has been on acquiring and holding Bitcoin, financing these purchases mainly through share issuance, debt, and preferred-like securities. It is now the biggest corporate Bitcoin holder, with holdings that Saylor values at over $70 billion.

What are "digital credit" products? These are Strategy's income-generating securities, like STRC, backed by its Bitcoin holdings. According to Saylor, they yield 10% to 12% annually and are treated as a return of capital, which defers tax rather than eliminating it. The company might sell Bitcoin or other assets to meet these payments, which explains why it states it must have the freedom to sell as well as buy.

What is MSCI considering? MSCI has been examining whether companies that primarily accumulate digital assets, frequently referred to as digital asset treasury companies, should remain in its global equity indices. It is evaluating whether these firms are operating businesses or more akin to investment vehicles, which index providers frequently exclude.

Why does it matter? If excluded, index-tracking funds would be compelled to sell Strategy shares, pressuring the stock and possibly the company's fundraising capacity. It would also establish a precedent for the rising number of comparable firms. Saylor contends that Strategy is an operating company akin to banks and insurers because it creates and markets credit products. He maintains that the decision is not very significant for the company.

What happens next? MSCI is set to reveal its decision on Friday, October 16. An exclusion decision would usually take effect at a subsequent index review, providing funds time to adapt.