$425M Bet on BTC: MicroStrategy is prepared to HODL its bitcoin for at least a century
September 16, 2020 @ 12:08 +03:00
MicroStrategy is prepared to HODL its bitcoin for at least a century. Or so said the business intelligence firm’s founder and CEO, Michael Saylor, in an interview with CoinDesk on Tuesday, shortly after he announced on Twitter that MicroStrategy was doubling down on the godfather cryptocurrency with the purchase of $175 million more BTC.
“I want something that I could put $425 million into for 100 years,” Saylor told CoinDesk. In the last two months Saylor has transformed his company’s once-sleepy cash surplus into a nearly half-billion-dollar bet on bitcoin, the “digital gold” Saylor is certain will outlast his tenure. “This thing” is a heaping pile of 38,250 bitcoins. The publicly traded firm bought $250 million worth on Aug. 11, days after telling shareholders that cash was no longer a safe place for its excess $500 million. Tuesday morning, it bought $175 million more.
Forget about parking the balance sheet surplus in inflation-prone cash or low-yield bonds or overextended tech stocks, Saylor said. In a market like this – and in the future he said is certain to come – there are only two good places to put excess cash to work: stock buybacks and bitcoin. It’s a radical about-face for a man who seven years ago declared bitcoin’s days were numbered.
“I went down the rabbit hole” during COVID-19, Saylor said, admitting he “was wrong” to have doubted bitcoin back in the $600 range. “I wish I knew then what I know now,” he said.
As of press time, MicroStrategy has converted $425 million into bitcoin. The stock has surged 30% since its first bitcoin buy on Aug. 11. It was up 9% on Tuesday. Other publicly traded tech firms – think Apple and Google – park billions of excess capital in cash and leave it there for years. But Saylor didn’t want to leave MicroStrategy’s millions in a bank account where the specter of inflation could slowly whittle it away. “We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting,” Saylor said. MicroStrategy has settled on bitcoin as the treasury alternative. “This is not a speculation, nor is it a hedge,” said Saylor. “This was a deliberate corporate strategy to adopt a bitcoin standard.”
Bitcoin CEO: MicroStrategy’s Michael Saylor Explains His $425M Bet on BTC, CoinDesk, Sep 16