The publicly listed billion-dollar company MicroStrategy announced yesterday that the company had purchased over 21,454 Bitcoins, to an estimated value of $250 million. This amounts to 0.1 percent of the total Bitcoin supply.
MicroStrategy is the world’s largest publicly listed business intelligence firm.
The reasoning behind the purchase was to acquire an adequate hedge for inflation. Besides a hedge for inflation, the company acknowledges that the possibility of significant returns is also an attractive component of their cryptocurrency investment.
Their primary concerns in the current markets is the corona-epidemic and the seemingly endless money printing currently happening by central banks.
Unknown to many due to non-disclosure agreements, several big bitcoin holders were approached to assist with conducting off-exchange deals. With such a massive amount of bitcoin that needs to be acquired over a short period of time, it is challenging to that directly on exchanges because you will end up pushing up the price and bleed with fees, thus other avenues are used to buy large quantities at more favorable rates for both parties.
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. Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions. 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.
Michael J. Saylor, CEO, MicroStrategy Incorporated
The company allegedly spent several months contemplating how to allocate their capital. Their decision ultimately fell on Bitcoin due to a confluence of several macro factors which is affecting the current financial markets. As mentioned, COVID-19 and uncontrolled financial stimulus were substantial factors alongside increased global economic uncertainty.
The CEO expresses great concerns that the current business climate may have a strong depreciating effect on fiat currencies and other conventional assets.