Nasdaq-listed business intelligence firm MicroStrategy made waves recently after announcing the purchase of a significant amount of bitcoin. The CEO of the company, Michael Saylor, who once believed that bitcoin’s days were numbered, has now become a vocal bitcoin advocate.
Saylor recently suggested that the bellwether cryptocurrency is the perfect investment vehicle for the long-term. In a tweet on Oct.10, he argued that any asset can work if your investment time horizon is a short period like one year. Bitcoin, however, is perfect “if your investment horizon is one century”. To put it simply, bitcoin is a good investment for the long haul.
In a previous tweet, Saylor revealed that he had mulled investing the firm’s treasury in traditional financial assets like stocks and bonds but he settled on bitcoin as it is the “ideal long-duration asset”. As such, he doesn’t comprehend why anyone would want to trade the cryptocurrency instead of holding on to it.
In the wake of the COVID-19 pandemic, central banks around the world have resorted to unprecedented money printing as they try to cushion the economy. This act of printing money from thin air has resulted in investors’ confidence in fiat currencies waning.
Most individuals as well as conglomerates are now looking at alternative assets to preserve their wealth — and bitcoin boasting a maximum supply of 21 million has made it quite attractive to investors. This is simply because as a decentralized, programmable money, government leaders cannot debase it by printing more of it to fulfill their own self-interests.
Companies like Grayscale Investments, MicroStrategy, and Square have already realized that bitcoin has much more lasting value than fiat currencies and other assets. Such companies are likely planning to hold bitcoin for a number of years — or even a century as Michael Saylor hints.
Bitcoin Is Competing With Alternative Assets *Not* Altcoins
In a separate tweet today, MicroStrategy CEO has observed that bitcoin is in competition with alternative asset classes and not with alternative cryptocurrencies (popularly known as altcoins).
According to him, 99.9% of the money in the world is currently invested in assets like gold, cash, stocks, bonds, real estate. Saylor suggested that the main focus should therefore be on educating the majority rather than debating with the minority.