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Nasdaq-listed firm owns $250M Bitcoin (BTC) as part of its treasury reserve

Microstrategy Inc. believes that Bitcoin is better than cash in terms of appreciation potential.

Image by Miloslav Hamřík from Pixabay

Wed, 12 Aug 2020, 16:55 pm UTC

Cryptocurrency adoption has been on the rise as some banks are now offering crypto-related services to their clients. Some companies are now even starting to include Bitcoin (BTC) as part of their capital allocation strategy.

Microstrategy Inc. recently announced its acquisition of 21,454 Bitcoins (BTC), which was purchased price for $250 million including fees and expenses, Bitcoin.com reported. The Nasdaq-listed firm, which is valued more than a billion dollars, views the cryptocurrency as a “dependable store of value that is superior to cash in terms of appreciation potential.

As explained by MicroStrategy Incorporated CEO Michael J. Saylor, the decision to buy Bitcoin is part of the company’s reserve strategy. “Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” Saylor said, Businesswire reported.

Saylor explained that the company’s investment into BTC is a reflection of its belief that the token has more potential to appreciate in value compared to cash. “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,” the MicroStrategy CEO said.

Saylor also pointed out that BTC is now recognized by major financial companies as an investment asset class. “Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions,” he added. “MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”

Buying Bitcoins was considered as a counter to the depreciation of cash brought about by some factors. “Those macro factors include, among other things, the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty,” he explained. “We believe that, together, these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations.”

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