Earlier this year, MicroStrategy made news around the world when it became the first major, US-listed company to invest in Bitcoin. The firm, whose shares are traded on the Nasdaq exchange, whose shares are traded under MSTR, purchased leading crypto worth $ 250 million from its cash reserves.
The company's CEO, Michael J. Saylor, who was a very ambitious skeptic of the leading cryptocurrency, said at the time:
"This investment reflects our belief that Bitcoin, the world's most widely used cryptocurrency, is a reliable store of value and an attractive investment asset that has the potential to gain value longer than holding cash."
Unprecedented government fiscal stimulus measures including globally accepted quantitative easing, and global political and economic uncertainty make ownership of BTC logical, said the executive, "the economic and public health crisis caused by COVID-19. .
Some thought MicroStrategy went mad by investing a large portion of its capital into a single investment, especially since that investment was Bitcoin.
However, the company seems to be doubling.
The firm has stated that it wants to add some money to its Bitcoin collection. Details were not specified, but clarified this purpose in a recent application to the US Securities and Exchange Commission (SEC).
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MicroStrategy Could Buy More Bitcoin
After buying 21,454 BTC for $ 250 million earlier this year, MicroStrategy's management wants to go even further.
SEC, filing on the matter reader:
According to the New Policy, treasury reserve assets will consist of (i) cash, cash equivalents and short-term investments ("Cash Assets") that exceed the working capital requirements held by the Company and (ii) bitcoin held by the Company. Bitcoin continuously serves as the primary treasury reserve asset, depending on market conditions and the anticipated needs of the business for Cash Assets, including potential future share buyback activity. As a result of this new Policy, the amount of Bitcoin owned by the Company could go beyond the $ 250 million investment the Company announced on August 11, 2020. "
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Other Companies May Follow Suit
Other companies are expected to follow MicroStrategy. Jeff Dorman, who left Wall Street to operate Arca, recently stated that the move of MSTR will likely trigger other companies to see Bitcoin as an investment for their balance sheets:
"All other Corporate Finance teams in public companies saw a 10% increase in MicroStrategy's stock price. (…) The move in MicroStrategy stock upon the announcement of a BTC" cash "position will encourage other CorpFin teams to consider this."
With macro factors that deter holding cash, mass cash conversion for Bitcoin and other investments could be a possibility in the coming months and years.
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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