Publicly listed business intelligence firm MicroStrategy announced on Aug 11 that it had purchased 21,454 bitcoins worth $250 billion at the time, in a bid to hedge against Fed-led inflation.
This is a major achievement for bitcoin as it adds credibility to the narrative that the king of crypto is gaining popularity on Wall Street as a reliable store of value.
MicroStrategy Adopts Bitcoin As A Safe Haven
According to a press release on Tuesday, MicroStrategy which is currently worth over $1.2 billion, bought $250 million worth of bitcoins. The firm preferred bitcoin because it is a great hedge against inflation caused by the Federal Reserve’s quantitative easing measures.
In particular, the firm’s CEO, Michael J. Saylor believes bitcoin is a safe haven asset that has the potential to appreciate more in the long-term as compared to fiat:
“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.”
Saylor then explained a cocktail of factors that are likely to accelerate the debasement of fiat, including the coronavirus pandemic, infinite money-printing, and the global economic and political uncertainty. In contrast, bitcoin’s robust fundamental and technical aspects make it a safer bet.
“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. Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it.”
Worth mentioning that MicroStrategy had revealed to its shareholders last month that it would be investing at least $250 million in alternative assets like gold and bitcoin over the next 12 months.
The Crypto Community Reacts
Although the bitcoin price has not reacted positively to the report that the world’s largest business intelligence firm has invested in the asset, the cryptocurrency community has expressed its excitement over the news.
The CEO of Binance crypto exchange, Changpeng Zhao — fondly known as CZ — noted that stimulus money is flowing from Wall Street to Bitcoin. “Are you in front or behind them?” CZ then casually asked.
Barry Silbert, the CEO of crypto investment firm Grayscale commended MicroStrategy’s investment decision, saying:
“MicroStrategy, a $1.2 billion company, just turned itself into a publicly-traded bitcoin play. Smart.”
The move by MicroStrategy will undeniably motivate other publicly-listed firms on Wall Street to add bitcoin to their portfolios as a hedge. As analyst Preston Pysh has astutely remarked in a tweet, we are just getting started.