After $250 Million Bitcoin Buy, MicroStrategy Eyes More

Billion-dollar software firm MicroStrategy made a big Bitcoin purchase last August. But it may not be its last, as a new SEC filing indicates. By Andrew …

In brief

  • Business software firm MicroStrategy may invest further into Bitcoin, via SEC filing.
  • The firm purchased $250 million worth of Bitcoin in August.
  • MicroStrategy CEO Michael Saylor predicted Bitcoin’s demise in 2013.

Billion-dollar business intelligence software firm MicroStrategy made waves last month when it announced to shareholders that it might invest up to $250 million in Bitcoin over the following 12 months… and then just days later, went ahead and did it.

MicroStrategy’s purchase of 21,454 BTC ($229 million as of this writing) was a signal to other public companies that Bitcoin could be used as a serious reserve asset. And now, the company suggests that it may increase its Bitcoin holdings in the future.

In a filing with the US Securities and Exchange Commission on Friday, the company noted that its board of directors has updated the company’s treasury reserve policy. The new policy notes that aside from cash, cash equivalents, and short-term investments, Bitcoin will now serve as the company’s primary reserve asset.

“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,” reads the statement.

MicroStrategy might not be making any promises here, but after dropping a quarter of a million dollars into Bitcoin just a month ago, it’s clear that the firm isn’t second-guessing that decision—even with the recent downward movement for the price of Bitcoin and other top crypto assets.

Initially, MicroStrategy leadership said that it was considering Bitcoin and other crypto assets due to what they saw as a weakening US dollar, given low Western interest rates and the impact of the United States’ stimulus response to the COVID-19 pandemic. Days later, the purchase was announced.

“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,” said MicroStrategy CEO Michael Saylor in August. “MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”

Interestingly, Saylor’s announcement is an about-face. Back in 2013, he predicted the death of Bitcoin, tweeting, “Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”

Bitcoin’s price was about 10 times higher when MicroStrategy made its purchase last month compared to when Saylor tweeted that view in 2013.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.