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After investing in BTC for the first time last month, MicroStrategy yesterday announced that it had purchased more Bitcoins.
Business intelligence company, MicroStrategy Incorporated (NASDAQ: MSTR), is leading in the list of companies that have adopted Bitcoin as their reserve currency. Earlier last month, the company expressed its belief that the virtual currency powered by a public blockchain is superior to cash over the long term, claiming it to be a “reasonable hedge against inflation.” After investing in Bitcoin for the first time earlier last month, MicroStrategy yesterday announced that it has purchased more bitcoins. Apparently, the company now controls Bitcoin worth almost half a billion dollar according to the market value at the time of publication, around $10,900. Notably, MicroStrategy (MSTR) stock jumped 9.21% to close Tuesday trading at $155.75, and continued with the rise during Wednesday’s pre-market, trading around $160.
At the time of writing, MicroStrategy stock is $7.64% up, trading at $167.65.
With a market capitalization of around $1.51 billion through Tuesday, approximately 33% of it is in Bitcoin.
The company has been increasing its Bitcoin reserve and dramatically reduced its fiat reserves. According to SEC filings, the company purchased 38,000 BTC worth $425 million at an average price of $11,111.
“We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting,” CEO Michael Saylor told the media.
MicroStrategy Decisions about Bitcoin That Pushed MSTR Stock Higher
The decision to use Bitcoin as its reserve currency might be one of the best the company will ever take or the dumbest ever. This is primarily because Bitcoin is highly volatile and its value derived from mere speculation.
“This will go down in history as one of the smartest or worst CEO decisions of all time. Case studies and books will be written about it. Either way, it took enormous guts for a public company CEO and I commend him for the courage,” said Barry Silbert, the CEO of Grayscale.
Bitcoin increased demand has sustained its market price above $10K for around two months. With institutional investors pumping more cash into the Bitcoin market, governments will be compelled to create policies to govern the industry.
As a result, the cryptocurrency industry will eventually be globally adopted both by institutions and retail investors.
The likelihood of other companies following MicroStrategy’s footsteps are very high. “MicroStrategy is adopting a #bitcoin standard. Other companies will follow. Finally, central banks will follow (Switzerland likely to be the first.) A new gold standard for the digital age. A neutral store-of-value will create more checks and balances for governments,” said Datavetaren, a pseudonymous software engineer.
MSTR investors are hopeful that the company will certainly experience huge gains which will exponentially increase its value.
This is perhaps the main reason that MSTR stocks keep on rising each and every other time the company purchases more Bitcoins.