A few days ago, MicroStrategy sent a communication to the United States Securities and Exchange Commission (SEC) informing them that Bitcoin has become the company’s main held asset.
The official document explicitly states
“On September 11, 2020, the Board of Directors of MicroStrategy Incorporated adopted a new Treasury Reserve Policy that updated the Company’s treasury management and capital allocation strategies. Under the new Policy, treasury reserve assets will consist of cash, cash equivalents, and short-term investments held by the Company that exceed working capital needs and bitcoin held by the Company, with bitcoin serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets, including future potential share repurchase activity. As a result of this new Policy, the Company’s holdings of bitcoin may increase beyond the $250 million investment that the Company disclosed on August 11, 2020”.
MicroStrategy Incorporated is a business intelligence company with over $480 million in revenue and over $900 million in total assets.
It is listed on the Nasdaq, so it is required to report such changes to the SEC.
Microstrategy and Bitcoin as a store of value
The news of the adoption of bitcoin as primary asset was already given about a month ago, but now it turns out that the company could increase its holdings of BTC, with more than $250 million already purchased.
In fact, the CEO of MicroStrategy, Michael J. Saylor, yesterday confirmed that the company had purchased an additional 16,796 BTC the day before at a total price of $175 million, bringing the held bitcoin to 38,250.
On September 14, 2020, MicroStrategy completed its acquisition of 16,796 additional bitcoins at an aggregate purchase price of $175 million. To date, we have purchased a total of 38,250 bitcoins at an aggregate purchase price of $425 million, inclusive of fees and expenses.
— Michael Saylor⚡️ (@saylor) September 15, 2020
MicroStrategy now has $425 million in bitcoin, about half of its total assets.
Saylor also stated:
“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 intent seems to be clear: to hold bitcoin over the long term as a store of value, anticipating a possible increase in value over time, as opposed to US dollars whose real value over the years is likely to decline.
This reasoning is shared by Paul Tudor Jones and Pantera Capital.
