Microstrategy’s $250 Million Bitcoin Buy Consequential

When a publicly owned company decides to invest about $250 million in an asset that was widely attacked more than a decade ago, it says a lot about how the world has changed. The reasons and the timing of Microstrategy’s bitcoin incursion could not have come at a better time for the company’s investors.

The constant reminders about the waning fortunes of the U.S. dollar on one hand and the growing recognition of bitcoin, on the other hand, all tell the story of a changing world.

Changing Environment

To illustrate, it has been reported that the U.S. Federal Reserve has printed more money in two months than it had done in more than four decades. Such an unprecedented feat means it cannot be business as usual. There has to be a response to this new normal.

Similarly, the story of the Office of the Comptroller of the Currency (OCC), giving the green light for Banks to offer cryptocurrency custody services, is another important signal. It is a signal that reinforces the notion that the world has changed and that businesses need to embrace this. The OCC’s pro-fintech chief currency comptroller, Brian Brooks, elucidates this point in a recent interview.

Elsewhere, a U.S. Court had ruled that bitcoin is a form of money. The implications of such a ruling are potentially far-reaching.

While such signals might make it seem obvious that companies need to invest in bitcoin, it appears a much larger catalyst was needed to kick things off. Unfortunately, it had to take something on the scale of Covid-19 to jolt companies into action. The rapid spread of the virus set off a chain of extraordinary events which ultimately led to global financial markets crashing.

The inevitable (if not alarming) response by governments around the world added a new sense of urgency to the issue of embracing cryptocurrencies. Whether it is the stimulus check or any other appropriately named welfare scheme, the response by governments has been unprecedented. Such interventions extinguished any hopes…

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