Holding Bitcoin (BTC) in treasury will soon become a corporate standard. Wall Street firm MicroStrategy recently made headlines when it decided to allocate a large portion of its treasury to Bitcoin, buying over 21,000 BTC in August and almost 17,000 more in September, making its CEO, Michael Saylor, seem quite prescient already. MicroStrategy stock rallied just like BTC as well — by 50%. According to Saylor, Bitcoin was the best inflation hedge and store of value, and in his words, “Cash is trash.” His wager has, so far, been handsomely rewarding.
Technically speaking, Bitcoin is, in fact, a worldwide store of value. BTC is not just a United States or an Asian phenomenon — it is held and exchanged around the world via myriad local exchanges, making the available liquidity pool both global and capillary in granularity.
There are many technical reasons for calling Bitcoin an inflation hedge. BTC is a numerus-clausus asset class, meaning that there is a finite number in circulation (a maximum of 21 million coins) much like gold, high-end real estate and fine art. Furthermore, there is a dwindling new supply of Bitcoin — after the BTC mining halving — and a culture of long-term holding among most crypto participants. All of this spells a small supply. Historically, BTC seems to replay its past bull run waves post-halvings. This is the third halving, and it doesn’t disappoint. On the demand side, the picture is expanding.
The world’s economies are entering strong expansionary monetary phases — generalized quantitative easing, so to speak — as a reaction to the COVID-19 pandemic. Bitcoin, so far, has outperformed every asset class throughout the crisis, spurring new demand and earning its wings as a global store of value. The fact that it is ethereal and not tied to real economic cash flows — unlike, say, stocks or real estate — plays to its advantage when the…