MarketsBitcoin
|5 min ReadMichael Saylor: The Future of Stocks & Bonds Backed By Bitcoin
Jax Morales
Senior Analyst
Published
Jan 16, 2026
Bitcoin’s recent range has been framed as weakness. Michael Saylor is selling the opposite read: flat price action is what a maturing asset looks like when early holders cash out and the next buyer class waits for volatility to cool.
His core claim is structural, not emotional. Roughly $2.3 trillion of Bitcoin sits “unbanked,” meaning holders cannot easily borrow against it at scale. When you cannot lever an appreciating asset, you sell it to pay for real life. That creates a steady, rational supply that looks bearish on the chart but is really a credit market failure.
Saylor argues this is the transition phase. OG holders trim, volatility compresses, and the capital that demands lower vol starts taking size. The market feels boring right before it becomes institutionally ownable.
Sideways Bitcoin is a credit story, not a chart story
Saylor’s positioning starts with a simple observation: Bitcoin can double over a year and still feel miserable if it does it through violent legs and then stalls. He points to the psychological trap where traders extrapolate the last rally, then interpret consolidation as a breakdown.
His sharper point is who is selling and why. He describes early holders trimming small portions of large positions, not because the thesis broke, but because they need liquidity and have no clean way to borrow against BTC. In equity terms, it is employees selling stock options in a company they still believe in because tuition and mortgages are paid in fiat.
That framing matters because it changes what traders should watch. If the pressure is life-driven distribution, the key signals become volatility and credit access, not a single macro headline. The moment BTC collateral becomes routine in regulated pipes, that same selling pressure can flip into a refinancing loop.
The “no cash flow” objection is the opening, not the end
TradFi’s standard dismissal is familiar: Bitcoin has no cash flow, so it cannot be a “quality” asset. Saylor’s rebuttal is blunt. Many prized stores of value do not throw off cash flow, and cash flow is not the defining trait of money.
Then he pivots to the part that actually matters for markets: even if Bitcoin itself does not pay you, structures built on Bitcoin can. His thesis is to turn BTC into “digital capital” and issue “digital credit” against it.
He describes today’s credit world as yield-starved and liquidity-poor. Bank deposits rarely clear what people consider a fair rate, while sovereign and high-grade credit often struggles to outrun real-world inflation. In that context, the pitch is simple: if Bitcoin is the best collateral, then credit built on Bitcoin can offer higher yield with heavier overcollateralization than the traditional system.
Mechanically, Saylor’s playbook is to denominate obligations in fiat currencies and secure them with BTC, aiming for collateral coverage multiples that are far higher than typical mortgage or corporate credit structures. He argues the mistake is borrowing in a stronger unit than your collateral. His solution is to hold the scarce asset and issue liabilities in weaker units.
That is the bridge he wants institutions to cross: BTC remains a non-yielding reserve, while BTC-backed instruments become indexable yield products.
Preferred shares and derivatives are the flywheel, and the risk
Saylor frames preferred stock as a flexible container that can behave like debt or equity depending on terms. In his telling, this is how you turn “no cash flow” into an asset that throws off a stream, without selling spot.
He describes a suite of instruments with different trade-offs: some blend fixed dividends with equity upside via conversion terms, others push higher effective yield by sitting lower in the capital stack, and a newer design targets lower price volatility by shortening the instrument’s interest-rate exposure and paying dividends more frequently.
The important disclosed detail is how the cash actually gets paid. Saylor says the company has roughly $6 billion of these preferred structures outstanding and pays about $600 million per year in dividends. The primary funding source is continuing equity issuance, with derivatives and other credit tools as secondary levers. He also points to basis-style carry, using spot BTC as collateral to sell futures and harvest spread when it exists.
This is where the market scenario sharpens. The strategy works best in a receptive equity tape and functioning derivatives markets. If the equity window tightens, or BTC volatility spikes hard enough to squeeze collateral terms, the “no selling” narrative gets stress-tested fast. The structure is reflexive: it can accelerate BTC accumulation on the way up, and it can amplify financing constraints if liquidity dries up.
Saylor also signals two milestones he thinks will change marginal demand: achieving investment-grade recognition and meeting the requirements to qualify for major equity index inclusion. Even if inclusion is delayed, the attempt itself is a map of where institutional capital might eventually be allowed to allocate.
The near-term takeaway is not a single price target. It is a regime call: if Bitcoin’s next leg is driven by credit plumbing rather than retail momentum, the winners will be the instruments that survive a risk-off quarter without forcing forced selling. That is the real test of “Bitcoin yield” as a product category.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.