Microstrategy just added to their bitcoin holdings. The business intelligence firm sells software products, earns, and places a portion of its overall savings in bitcoin.
But why are they adding to their bitcoin holdings at such a rapid pace? Does Michael Saylor, the CEO of Microstrategy, know something about bitcoin that everyone else does not know? Does he know that bitcoin will go up to $250,000 over the next few months? Does he know this for certain and hopes to sell a portion of his holdings at the potential highest level in this bitcoin cycle?
On Twitter, Saylor noted that Microstrategy purchased over 260 bitcoin at over $57,000 per bitcoin, adding to their stockpile of 90,000 bitcoins. They continue to amass bitcoins to add to their treasury.
Saylor and Company Show That Bitcoin Is Way More Valuable Than The Dollar
Saylor’s continual purchases show that they have conviction in bitcoin’s value. They seem to think that it will hold up in value over the long haul. Indeed, Saylor has said several times that he will hold bitcoin and does not care about bitcoin’s varying price in the present.
They literally do not care about dollars at this point and will fork over as much United States currency as possible to capture intangible digital value.
The firm will continue to focus on its present operations and store added value in bitcoin. Saylor noted in an interview in 2020, that he is not leading a bitcoin hedge fund but a software company.
He further stated “we do have a software company generating cash, but if we simply swept the cash into fiat currency and allowed it to debase at 15% each year, we’d be losing as much on the balance sheet as we generated from the P&L, so that didn’t make sense,”.
Saylor states “[Bitcoin] looks like it’s emerging as the primary treasury reserve asset for people that are looking for some way to avoid the great monetary inflation.”
Saylor and company do not see any other option but to hold bitcoin on their balance sheet. Dollars do not do the job for them anymore. Bitcoin is conceptually the world’s sole scarce digital asset.
Saylor’s Taking Huge Risks…in The Short Term?
Saylor and Microstrategy are taking significant risks in the short term.
If you look at bitcoin’s history, it has shot up over 700% in several cycles and then retraced significantly downward. Saylor, graduated with various STEM heavy degrees. Yes, he may have higher intellect, but MSTR has been a general dog in the markets for several years before this recent run-up. The market left the company’s prospects flat, expecting minimal excitement. What happens if bitcoin declines as it has in the past? Does it take down TSLA, MSTR, and other firms that hold it with it?
But it is not just bitcoin that Saylor and Musk would have to worry about in the short term. The notion is that we are in the mother of all bubbles around the world. That, coupled with a pandemic, high debt levels, lockdowns, and general economic destruction, does not bode well for most asset classes.