In a historical move, MicroStrategy, the Nasdaq-listed business intelligence company, has become the first listed company to take $250 million from their balance sheet and purchase 21,454 bitcoins in a bid to extract more value from their investment.
Their CEO, Michael Saylor commented:
“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. 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 “
“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.
This is perhaps the first instance of a mega-corporation vouching for Bitcoin. And if recent developments are anything to go by, this could just be the beginning of a new revolution.
The move has led some to speculate that cryptocurrencies could potentially be used as a global reserve currency. It’s a fancy way of saying banks and governments could use bitcoins to trade and settle transactions instead of their own currency.
Consider Venezuela. Last year, the International Monetary Fund estimated that inflation in the country would reach 200,000% and that the economy would contract by 35%. Meaning their currency , the Bolivar, would soon become worthless. So some folks resorted to barter. Others transacted with the dollar after the government permitted limited use of USD within the country. But a tiny, brave minority have decided to use cryptocurrencies to bypass the authoritarian regime altogether. Which means that retail adoption is picking pace as we speak.
However the project failed and the Petro didn’t do much!
MicroStrategy’s move to begin bitcoin investing, to replace fiat currency with cryptocurrency is being applauded by the crypto world. As for us, we hope this isn’t just an elaborate effort to mislead investors.
What the future holds is anybody’s guess.