MicroStrategy’s adoption of Bitcoin as the primary reserve asset has taken the market by storm, with many arguing that the development was one of the facilitators behind the climb of BTC to $19K on the charts.
Michael Saylor spoke about Bitcoin and his company’s decision to invest in Bitcoin, which is now higher by 182%. While Microstrategy’s investment was not the first one, it should be noted that it created a ripple effect that motivated others to do the same.
Central banks from across the world have printed numerous fiat currencies to ease the pandemic’s woes. Although these banks were attempting to prevent a massive disaster and a recession that will take years to return, it will come back, and so the banks that printed it.
As of now, the bonds were yielding less than 1% in average returns while the stock market has been on the rise. Ergo, seeming to have no hedge, shall stock the market crash.
It is the main reason why one argues that the 60-40 portfolio has met its end. Consequently, there is no need to preserve wealth, and there are two options left, Gold or Bitcoin.
But there is no doubt that Bitcoin is the best option.
If MS’s cash reserves were to be kept in cash, it would be rebased to over 10-15% per year, to a point where future returns will be nullified.
“We are a software company generating cash but if we simply swept the cash into fiat currency…. then it would debase 15% a year. We’d be losing as much as we generated on the PNL.”
Saylor continued,
“Bitcoin is up a hundred percent annually [more or less], but what a lot of people don’t understand is Bitcoin is a monetary network and as a monetary network it is capable of storing and channeling energy over time without power loss.”
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