Earlier this year, MicroStrategy made headlines around the world when it became the first major US publicly traded company to invest in Bitcoin. The Nasdaq-listed company, whose shares are traded under MSTR, purchased $ 250 million of leading cryptocurrency from its cash reserves.
Chief executive Michael J. Saylor, who was once a highly assertive skeptic of the leading cryptocurrency, said at the time:
“This investment reflects our belief that Bitcoin, as the world’s most widely used cryptocurrency, is a reliable store of value and an attractive investment vehicle with greater potential for long-term appreciation than holding cash.”
The executive added that “the economic and public health crisis triggered by COVID-19, unprecedented government financial stimulus, including quantitative easing adopted around the world, and global political and economic uncertainty” make BTC logical to own. .
Some thought that MicroStrategy had turned the gun over by putting so much of its capital into one investment, especially since that investment was Bitcoin.
But the business appears to be doubling.
The company has just indicated that it wants to add some coins to its Bitcoin collection. The details were not specified, but it made this intent clear in a recent filing with the United States Securities and Exchange Commission (SEC).
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MicroStrategy can buy more Bitcoin
After purchasing 21,454 BTC for $ 250 million earlier this year, MicroStrategy management is looking to move forward.
The SEC filing the matter is reading:
Under the new policy, the cash reserves will consist of (i) cash, cash equivalents and short-term investments (“cash”) held by the company that exceed working capital needs and (ii) bitcoin held by the company, with bitcoin that acts as the primary treasury reserve on an ongoing basis, depending on market conditions and the company’s expected cash needs, including future potential share buyback activities. As a result of this new policy, the company’s holdings of bitcoin could increase above the $ 250 million investment the company announced on August 11, 2020. “
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Other companies can follow suit
Other companies are expected to follow MicroStrategy. Jeff Dorman, who left Wall Street to operate Arca, recently stated that MSTR’s move will likely lead other companies to consider Bitcoin an investment for their balance sheet:
“Every other Corporate Finance team at publicly traded companies saw the 10% higher in MicroStrategy’s stock price. […] The shift in MicroStrategy’s stock in the announcement of a ‘cash’ position from BTC will prompt other CorpFin teams to consider this. “
Given the macroeconomic factors deterring cash holdings, a massive cash conversion for Bitcoin and other investments could be a possibility in the coming months and years.
Related Reading: It “makes sense” for Ethereum to decline at current prices: here’s why
Photo by 金 运 on Unsplash Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Nasdaq-Listed MicroStrategy May Soon Buy More Bitcoin After Forking Out $250m