Aug 11, 2020 at 12:32 UTCUpdated Aug 11, 2020 at 14:44 UTC.CEO Michael J. Saylor said bitcoin is now the "Principal holding" in his business intelligence company's revamped treasury reserves strategy.
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.
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.
CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
MicroStrategy Buys $250M in Bitcoin, Calling the Crypto 'Superior to Cash'
Published on Aug 11, 2020
by Coindesk | Published on Coinage
Coinage
Mentioned in this article
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.