Nasdaq-listed company Microstrategy Inc. is bullish on bitcoin, saying that it is a “dependable store of value” that is “superior to cash.” The billion-dollar company has purchased $250 million in bitcoin, adopting the cryptocurrency as its primary treasury reserve.
Public Company Now Holds Bitcoin as Cash Reserve
Microstrategy Inc. (NASDAQ: MSTR), which describes itself as “the largest independent publicly-traded business intelligence company,” rocked the bitcoin community on Tuesday when it announced the adoption of bitcoin as its primary treasury reserve. The company’s market cap is currently about $1.33 billion.
Microstrategy revealed that it has purchased 21,454 bitcoins at an aggregate purchase price of $250 million, inclusive of fees and expenses. “Our investment in bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” CEO Michael J. Saylor said.
“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,” the CEO acclaimed, adding:
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.
Saylor detailed that his company spent months determining its capital allocation strategy, considering macro factors such as “the economic and public health crisis precipitated by covid-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty.” The company believes these factors and others “may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.”