Publicly traded business intelligence firm MicroStrategy purchased 21,454 bitcoin on Tuesday, effectively pouring all $250 million of its planned inflation-hedging funds into the digital currency.
- Disclosing its bitcoin buy alongside an equivalent stock buyback in a Tuesday Securities and Exchange Commission filing, MicroStrategy, a Nasdaq-listed software firm worth over $1.2 billion, said the cryptocurrency provided a "reasonable hedge against inflation" in a press statement shared with CoinDesk.
- “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," said CEO Michael J. Saylor.
- Saylor cited forces working to weaken fiat currencies – COVID-19, global quantitative easing measures, political and economic uncertainty – but also the technical and qualitative aspects that he said give the bitcoin blockchain strength.
- “We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility and community ethos of bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value," Saylor said.
- The capital allocation quickly fulfills Saylor's late July promise to shareholders that MicroStrategy would buy back $250 million in stock and invest an additional $250 million in gold and bitcoin over the next 12 months.
- The belief was that these and other "alternative investments" would protect MicroStrategy's dollar-heavy balance sheet.
- It is now clear that half of the $500 million bet turns entirely on bitcoin. MicroStrategy "accordingly has made bitcoin the principal holding in its treasury reserve strategy," Saylor said.