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MicroStrategy purchase of BTC: What does it mean for the world?

The financial world has its eyes on Bitcoin as a superior asset, considering it to be a store of value for companies looking for market investment options.

As a precedent, by the end of July 2020, Fidelity Digital Assets published its Bitcoin Investment Thesis stating Bitcoin could be an insurance policy in times of increasing financial uncertainty.

A few days later, the US business intelligence company MicroStrategy announced to the world the news about purchasing 21,454 BTC during an aggregate investment of $ 250 million. The company explained this change in strategy with the desire to maximize long-term value for its shareholders.

MicroStrategy is the largest independent publicly-traded business intelligence company listed on Nasdaq and based in Virginia, USA. 

At Bankomia, we believe that it gives hope to the crypto world because it represents five confidence strides of bitcoin strength. 

Another reason to believe in the “era of crypto” 

Michael J. Saylor, the CEO of MicroStrategy, recognized the increasing problem with fiat money after the beginning of the COVID-19 crisis.  

With FED excessively handing out stimulus checks with the current value of $267 billion and continuously injecting the system with more than $2.3 trillion, the fiat money is rapidly devaluing against other asset classes like precious metals or cryptocurrencies. Our in-house experts believe it is only a matter of time until other corporations will follow the lead and look into diversifying their reserve funds into other asset classes than fiat. 

The situation could add more fuel to the upcoming bull market. Thanks to tech advances and the COVID-19 crisis, the world is living a speed-up digitalization of products, services, and processes. To be alienated from these market dynamics, companies rethink their systems, operations, and financial strategies. Bankomia will provide a 24/7 all-in-one crypto platform to support companies to develop these new business strategies. 

Only 500 entities can acquire that amount of Bitcoin

MicroStrategy has purchased more than 0.1% of the MAX supply. Suppose we take into account that there are only 18.4 million Bitcoins in circulating supply, of which 7.4 million Bitcoins are “hodled” or lost

In that case, we can conclude that MicroStrategy has bought a mind-boggling amount of ~0.19% of total active Bitcoins. That means that only 500 entities can acquire that amount of Bitcoins. 

In our opinion, the pros of buying Bitcoin as an investment strategy are that it provides a reasonable hedge against inflation and prospects higher return earnings than other investments. Still, a noteworthy contra is that only a few companies in the world can copy this strategy because every next competitor to replicate this will find it increasingly expensive.

The numbers speak for themselves

The trust fund Grayscale Bitcoin Trust has bought more Bitcoin than there has been mined since halving. Grayscale and MicroStrategy have purchased a total of whopping 75.000 Bitcoins since the halving in May 2020, while the number of Bitcoin mined is only 39.000.

These corporations jumping in have turned the attention of smaller retailers and the general public towards Bitcoin. More and more retailers are moving over to cryptocurrencies. The total amount of Bitcoin wallets containing at least 0.1 Bitcoin has reached an all-time high of 3.1 million.

The exponential growth of crypto infrastructure is coming

It’s time to stop thinking that the success of cryptos falls on whether it is a payment method to buy regular items.

MicroStrategy showed to the world that the most significant value proposition for Bitcoin is to be a store of value, just like gold was decades ago. Of course, many businesses will add to the trend of being a regular payment method in a middle way.

With a new wave of investors, which seems only to be also growing, the cryptocurrency infrastructure is evolving. Bankomia sets the goal of being the bridge between new investors and the world of cryptocurrencies by offering retail users the control of their funds, value, and time.

Now more people are considering Bitcoin as digital gold

Bitcoin still has an excellent performance event during quarantine time, economic crisis, and breakdown of the market stocks.

This fact matches with the Michael J. Saylor statement about bitcoin as digital gold: it’s “harder, stronger, faster, and smarter than any money that has preceded it.”

And just for the record, in 2013, Saylor said that Bitcoin days were numbered, and with time, its fate will be the same as online gambling
It is an excellent example of how MicroStrategy’s CEO has changed his mind and adapted his business to the world of crypto.

So, what else do you need to change your mind towards the Bitcoin era?

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