MicroStrategy’s entry into the crypto market has brought a new friend to Bitcoin.
A few weeks ago we received the news that a publicly traded company, MicroStrategy, was making a significant investment in bitcoin (BTC), completing the purchase of nearly half a billion dollars in BTC, and that they are now part of the reserves of their treasury. Despite the fact that the topic has been discussed a lot and that the company’s CEO has given a significant amount of interviews in this time frame, I find it significant to return to this purchase, especially because of the elements surrounding its realization.
Let’s remember that last August 10th, the company reported the acquisition of 21,454 BTC, becoming the first publicly traded company in the United States to make a purchase of this type. Just a few days later, the figure rose to 38,250 BTC, with a total average price of $11,000. According to Michael Saylor, the company’s CEO, the first BTCs were acquired after 78,388 off-chain transactions.
„This investment reflects our belief that Bitcoin, as the most widely adopted crypt-currency in the world, is a reliable store of value and an attractive investment asset with more potential for long-term appreciation than cash. Since its inception more than a decade ago, Bitcoin has emerged as 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 asset that can be superior to cash, and as a result, has made Bitcoin the primary stake in its cash reserve strategy,“ explained Saylor in the official release of the decision.
A key element of this story is that Saylor, 55, was a staunch critic of Bitcoin in its early days. In fact, if we consider his first comments on the subject, the change of opinion is striking and even somewhat paradigmatic.
As a detail, remember that in 1987 he graduated with a double specialization in aeronautics and astronautics; and in science, technology and society. In addition, he is the longest serving CEO in his position, which he has held since before 2000, at a company specializing in „business intelligence“, which is why he has excelled at MicroStrategy. He even sold an Internet domain name -voice.com- for $35 million. Among his investments are companies such as Apple, Facebook or Twitter, which he said he saw the potential of even in their early ages.
In 2013, Saylor went so far as to say „Bitcoin’s days are numbered. It seems it’s only a matter of time before it suffers the same fate as online gambling,“ and even that „without a credible sponsor, Bitcoin is in imminent danger of being regulated and ceasing to exist. These were some of your thoughts on the cryptomoney created by Satoshi Nakamoto, what changed?
Inflation: a key element in falling through the rabbit hole
Saifedean Ammous, Andreas Antonopoulos, Anthony Pompiliano, Vijay Boyapati, Parker Lewis… These are some of the proper names that have helped Bitcoin’s little worm end up convincing Saylor’s will. Not a „formal“ education, knowledge about a specific subject, of very high quality and completely free and available on the Internet.
However, the determining factor in this change of mindset has been the inflation that is projected over the global economy, especially from the different stimulus packages that have been generated at a global level with the United States as the key to the weight of these economic measures.
Having cash on hand is not competitive, especially in a world that increasingly favors investment strategies that generate better returns. This is Saylor’s thesis to bet on the orange.
Why would anyone put $425 million on a product they don’t trust? Because the learning process that Saylor has gone through, added to the macroeconomic panorama (of which he has indicated he is very aware as a high-level investor), has led him to value any investment element that does not depreciate. Cash must be disposed of quickly but efficiently.
However, when considering market options, Saylor himself has realized that each of the potential candidates has its own weaknesses. In the final competition, between gold and Bitcoin – and here we might suggest that influenced directly by Ammous and the Austrian economy – it is a „harder than gold“ commodity.