Michael Saylor, Executive Chairman of MicroStrategy, discussed the company's $500 million investment in Bitcoin. In an interview, he addressed economic factors that influenced this decision.
Challenges with Traditional Assets
Saylor emphasized that traditional assets are becoming increasingly risky in light of the current economic situation. He likened holding cash to 'sitting on a melting ice cube', noting that actual yields have fallen to negative 25 percent due to inflation. Investors have started to view cash reserves not as assets but as liabilities.
Bitcoin as a Hedge Against Inflation
According to Saylor, Bitcoin is being viewed as a superior option for value preservation due to its limited supply of 21 million coins. He compared Bitcoin to gold, pointing out that Bitcoin avoids the long-term risk of reduced yields when demand increases, as its issuance is dictated by code rather than market reactions.
MicroStrategy's Bitcoin Acquisition Strategy
MicroStrategy employs a strategy of acquiring Bitcoin through OTC brokers and automated buyer systems to avoid destabilizing prices. Saylor also expressed concerns about Ethereum, citing ongoing updates and its unlimited supply as factors adding uncertainty.
MicroStrategy's investment in Bitcoin reflects a strategic recalibration and the company's intent to utilize cryptocurrency as a hedge against inflation risks. In times of economic instability, Bitcoin represents a reliable method for value preservation.
