What started out as a slow trickle of institutional investment pouring into the bitcoin market is developing into a steady stream that will, in time, turn into an all out flood. Let the game theory commence!
Prior to 2020, institutional and corporate interest in bitcoin was rather inconsequential. Though it started as a grassroots phenomenon, led mostly by “retail” for the first 11 years of its history, the rubicon was definitely crossed for bitcoin in 2020 with the COVID-19 pandemic and subsequent economic recession brought about record levels of monetary expansion globally. As a result, institutional and corporate interest in bitcoin as a monetary asset has exploded. While investors like Paul Tudor Jones, Stanley Druckenmiller and others have come out as bullish on bitcoin, publicly-traded companies that have turned to BTC will be the focus of this article.
The First Domino: The Saylor Effect
On August 11, 2020, Michael Saylor, CEO of MicroStrategy, fired a shot heard across the Bitcoin industry and the legacy financial system. He announced that his company had shifted its treasury reserve strategy to a Bitcoin standard (you can find the original press release here).
“We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting. This is not a speculation, nor is it a hedge” said Saylor. “This was a deliberate corporate strategy to adopt a bitcoin standard.”
Following the move in August, Saylor spent the following months seemingly taking up nearly every interview and podcast invite that was thrown his way to describe his company’s decision. In January 2021, Saylor announced that MicroStrategy was conducting an online seminar open for all to attend, “Bitcoin for Corporations,” during which his team open-sourced its thesis and playbook so that other corporations could follow in its footsteps.
The result: An explosion in the price and interest in bitcoin as a treasury reserve asset. Bitcoin opened 2021 at…