Microstrategy buys 21,454 bitcoins (BTC) at an aggregate purchase price of $250 million, inclusive of fees and expenses. “Our investment in bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” CEO Michael J. Saylor said.
“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 CEO acclaimed and added:
Microstrategy has recognized bitcoin (BTC) as a legitimate investment asset that can be superior to cash and accordingly has made bitcoin the principal holding in its treasure reserve strategy.
Saylor detailed that his company spent months to find the proper capital allocation strategy, considering macro factors such as “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.” The company says these factors and others “may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.”
As the company considered different asset classes, the CEO explained that their company “observed distinctive properties of bitcoin that led it to believe investing in the cryptocurrency would provide not only a reasonable hedge against inflation, but also the prospect of earning a higher return than other investments.” Recently, reports suggest that the Federal Reserve may soon commit to ramping up inflation by keeping interest rates low. Saylor conveyed:
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.
The CEO added: “Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accelerate with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”