The Nasdaq-listed firm MicroStrategy is continuing to purchase hundreds of millions of dollars worth of Bitcoin, resulting in its company stock price to gain over 9% on Sep 16.MSTR stock recovers to pre-Covid levels after buying Bitcoin.
MicroStrategy first announced the firm is purchasing Bitcoin on Aug. 11, after which its stock price surged by over 10%. Now, MSTR price has once again risen in a similar fashion after confirming yesterday that it doubled down on adopting a "Bitcoin standard," buying over 38,000 BTC worth $425 million at an average price of $11,111.
Datavetaren, a pseudonymous software engineer, said other companies will follow MicroStrategy.
"MicroStrategy is adopting a #bitcoin standard. Other companies will follow. Finally, central banks will follow A new gold standard for the digital age. A neutral store-of-value will create more check and balances for governments."
What are the risks of MicroStrategy's Bitcoin accumulation strategy?
According to Joe Weisenthal, the host of "What'd You Miss?" on Bloomberg, the revenue of MicroStrategy steadily declined since 2013.The revenue of MicroStrategy since 2011.
The company needed new ways to vamp up and gaining exposure to Bitcoin and making BTC its primary treasury asset is quickly becoming one of its major strategies.
Bitcoin has the potential to achieve both; it could act as a hedge against inflation and potentially outperform many asset classes over time.
There is an enormous amount of risk MicroStrategy is taking to secure such a large holding of BTC. But if BTC explosively grows over the long term, it could be a significant catalyst for the stock.
While the company has a large exposure to Bitcoin, Compound Finance's general counsel Jake Chervinskey said such a loophole is non-existent.
'Other companies will follow'
Published on Sep 16, 2020
by Cointele | Published on Coinage
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