The Bitcoin price has made good gains in recent weeks. Analysts say the crypto world is on the brink of the next bullish cycle. Partly responsible for this is people’s concern about national FIAT currencies. These are currently being printed like there’s no tomorrow. This is due to rescue attempts by the economy due to the global lockdown caused by the corona virus. However, many experts say that Corona will only bring down an already ailing system for good.
Microstrategy buys Bitcoin on a large scale
The software company Microstrategy has now responded to this concern and bought Bitcoin. The total number of Bitcoin was 21,454, which according to the current protocol corresponds to more than one per mille of the entire Bitcoin that has ever existed. At the current market value, this is equivalent to almost $250 million or €212 million. Microstrategy believes that companies also diversify their capital and thus protect or hedge it. The company sees the No. 1 crypto currency as a store of value and attractive investment value. Microstrategy’s CEO, Michael J. Saylor, said in a press release
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Our investment in Bitcoin is part of our new capital allocation strategy, which aims to maximize long-term value for our shareholders.
This investment reflects our belief that Bitcoin, as the world’s most widely used crypto currency, is a reliable store of value and an attractive investment with greater long-term capital appreciation potential than cash. Since its introduction over a decade ago, Bitcoin has become a significant addition to the global financial system, with features that are useful to both individuals and institutions. MicroStrategy has recognized Bitcoin as a legitimate investment value that can outperform cash, and has accordingly made Bitcoin the primary holding company in its treasury reserve strategy.
Saylor also sees a valid reason for the potential weakness of FIAT money in the degenerating global measures to save the economy during the Corona crisis:
Our decision to invest in Bitcoin at this time was determined in part by a combination of macro factors affecting the economic and corporate landscape, which we believe create long-term risks for our corporate treasury program – risks that should be addressed proactively. These macro factors include the economic and health crises triggered by COVID-19, unprecedented government financial stimulus measures, including the quantitative easing measures adopted globally, and global political and economic uncertainty. We believe that these and other factors combined may have a significant devaluation effect on the long-term real value of fiat currencies and many other conventional investments, including many of the assets traditionally held as part of the financial management of companies.
Microstrategy is a Nasdaq-listed global software company with headquarters in Virginia, USA. The company was founded in 1989 and, with its approximately 2,400 employees, generated revenues of $486 million in 2019. Microstrategy specializes in analysis applications for various purposes.
Importance of the action
This news is probably one of the most important this year, along with the news of the adoption of crypto currencies by major payment service providers such as PayPal or Visa. More than that, this is a direct expression of confidence in Bitcoin. It can be assumed that other large companies will also reconsider their capital allocation strategy in these times and consider Bitcoin as an alternative.
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