Microstrategy purchased $250 million in Bitcoin, adopting the cryptocurrency as its primary treasury reserve
Microstrategy Inc. company is currently quite bullish on Bitcoin with the claim that BTC is a dependable store of value that is superior to cash. Furthermore, this multi-billion dollar company bought $ 250 million in Bitcoin, using the cryptocurrency as its primary reserve.
Nasdaq-listed company Microstrategy Inc. is bullish on Bitcoin
Microstrategy Inc. (NASDAQ: MSTR) rocked the BTC community by announcing the adoption of BTC as the primary treasury reserve. Microstrategy revealed that it bought 21,454 BTC for a total purchase price of $ 250 million.
CEO Michael J. Saylor stated:
“Our investment in bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders. This investment reflects our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
The CEO added:
“Microstrategy has recognized bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made bitcoin the principal holding in its treasury reserve strategy.”
Microstrategy spent months determining its capital allocation strategy, considering macro factors such as the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty. The company believes these factors and others may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.
Microstrategy stock price chart on Nasdaq as of Aug. 11 | Source: Nasdaq
As the company considers the various asset classes, the CEO explains the following:
“Microstrategy observes the distinctive characteristics of Bitcoin and believes that investing in cryptocurrencies will not only provide a reasonable hedge against inflation but also have the prospect of higher returns than investments. ”
Recently, reports suggested that the Federal Reserve would soon be committed to increasing inflation by keeping interest rates low.
“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value. Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”
The news of Microstrategy’s adoption of BTC was well-received by the crypto community, seeing it as a significant upside price trend every public company will eventually follow.
The Bitcoin Standard author, Saifedean Ammous, wrote:
“So it begins: Microstrategy is the first large corporation to hold Bitcoin as a cash reserve asset.”
Gabor Gurbacs, Director of Digital Assets Strategy at Vaneck and MVIS, shared the sentiment:
“This is a big deal and good to see bitcoin used as intended: hard money/savings instrument.”
This is hugely optimistic. And let’s wait and see which company will be next.
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