MicroStrategy, a firm specializing in business intelligence, has been making headlines in the financial sector due to its major investments in Bitcoin. Unlike many businesses, which are careful not to embrace cryptocurrency, MicroStrategy considers it a core component of its business approach. So what, in fact, is MicroStrategy doing with Bitcoin, and how have Bitcoin and MicroStrategy become major advocates of the coin?
MicroStrategy made its first Bitcoin investment in August 2020. The company‘s CEO, Michael Saylor, together with other officials, bought the firm’s first Bitcoin, 21,454 Bitcoin, for $250 million. At that time, such a decision came out more as a gamble than anything, as the price of Bitcoin was quite unstable, and not many blue-chip corporates used it.
However, MicroStrategy has not stopped updating and upgrading its Bitcoin business strategies. For several years, the company has been recklessly buying bitcoins and raising one of the universe's most significant corporate bitcoin holdings.
People are passionate about Bitcoin for many reasons. Saylor and his crew are convinced that Bitcoin is an inflation hedge and a store of value. With worries related to currency devaluation and inflation on the rise, a large cash balance on the balance sheet makes MicroStrategy think Bitcoin holdings are a better option than holding cash.
Though much has been said about MicroStrategy's foray into Bitcoin, it hasn’t all been smooth sailing. Bitcoin value has been highly volatile and the prices reached even $20,000 in 2022 with the peak reaching over $60,000 at the end of 2021. For some, this is a case, that makes long-term holding of the Bitcoin asset in reasonable sizes practically impossible.
Saylor, on the other hand, is not distracted by this kind of distractive behaviour. On the contrary, he emphasized the significance of enhancing Bitcoin's worth in the long term a great deal more than short-term weaknesses in the price. This is to say, Saylor believes that, even when the external market is turbulent, MicroStrategy can guarantee its growth and safety by placing its bets on Bitcoin.
In addition to purchasing, MicroStrategy Bitcoin investment has also undertaken measures to incorporate cryptocurrency in its activities. As an example, the company has borrowed against its Bitcoin holdings and engaged in the use of Bitcoin for business purposes such as apportioning funds to potential investors and creating a designed image.
Based on past patterns, it is obvious that MicroStrategy will not stop investing in Bitcoin. MicroStrategy’s crypto strategy may also change due to the dynamic characteristics of the cryptocurrency environment. However, one thing is clear: the organization will continue to be one of the leading supporters of Bitcoin in the corporate sphere.
Wrapping up, MicroStrategy’s ongoing investment in Bitcoin is not solely aimed at generating profits but at establishing the company as a leader in today's evolving financial environment. Huddling more than 150,000 Bitcoins, MicroStrategy is a testament to its faith in the potential of cryptos, even with the associated risks.