- MicroStrategy is investing $250 million in a range of assets, including Bitcoin.
- The company’s rationale primarily hinges on Bitcoin’s ability to hedge against a frail dollar.
- Bitcoin’s capital appreciation and hedging properties will entice larger investors to adopt the digital asset.
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Yet another multi-billion dollar publicly-traded company told investors it would invest a portion of its assets in Bitcoin to preserve the value of its capital against a weakening dollar. BTC, which offers investors lucrative upside and hedges political risks, could become a staple in corporate portfolios going forward.
Institutions and Corporations Turn to Bitcoin
Headwinds for Bitcoin are becoming stronger as the digital asset’s price hits a yearly high. From the entrance of institutional investment funds to blistering demand from retail and macro investors, Bitcoin’s fundamentals paint a very bullish picture.
There’s one catalyst that’s been ignored that could spark further capital inflow to Bitcoin: corporations.
MicroStrategy, an analytics software company, wants to invest in precious metals and Bitcoin to increase the strength of its balance sheet. While the company is distributing profits to its shareholders, it wants to hold on to some money for internal investments to grow the business.
Phong Le, CFO of MicroStrategy, told analysts in the quarterly earnings call that the company would divert $250 million to assets like stocks, silver, gold, and Bitcoin.
Co-founder and CEO Michael Saylor later justified the need for these investments:
“Having said that, we need to maintain a healthy capital base. It’s the equivalent of our endowment as an institution and we need that capital base in order to assure our investors, our employees, our customers, and our partners that we’re going to be around through good times and bad times. So while it’s potentially dilutive for us to carry that capital in dollars, that doesn’t mean…