Microstrategy, a unicorn company, worth about $1.3 billion, became the first listed company to buy Bitcoin as a hedge. With the USD losing 86% of its value since the 70's or the equivalent inflation of 624%, the press release on Tuesday surprised the crypto community with yet another sign of a bull run.
“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,” CEO Michael J. Saylor.
Microstrategy are now the 'largest independent publicly-traded intelligence company' in the business. However, for any public company – even one that develops software, it is unprecedented.
The news may have rocked traditional investment firms had it come from a different sector, like the automotive industry, but nevertheless, it is the start of a trend which paints a very rosy picture for the crypto-herd. Microstrategy's acquisitions of Bitcoin to hedge against $USD inflation is a practical measure to stop inflation eviscerating their cash reserves.
CEO Saylor cited the Federal Reserve's powers as totally impotent, and with COVID, structural economic issues and Trump cited as problems, the future purchasing power of the USD is under threat. Limitless money printing was at the top of their concerns, with one obvious consequence would be a big devaluation of the USD.
“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility and community ethos of bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value”. Saylor, CEO.
The challenge to crypto adoption in the mainstream has been plagued by issues, beginning with the knowledge required to trade in crypto, as well as the Bitcoin bubble disaster, when many people lost everything and the public's trust was devastated. Most digital assets fell by over 90% of their value and users rejected crypto en masse. The failure of so many projects of 2017, and many scams destroyed crowdfunding for (ICO's). Funding fell by 97% in 2019 compared to 2017-18 levels.
Microstrategy's Bitcoin hedge came as PayPal and Visa began working on their their own token aspirations. Crypto is being made trustworthy again by institutional adoption of digital assets. This is the start of a new future and the end of cash as we know it.
The chances of huge gains for investors in crypto have never been so high. Holding utility tokens as if they were shares from a public company, or trading, can bring rewards that will leave traditional asset classes in the dust, and could make many a millionaire out of the smart investor.
Tips for trading:
– crypto is high risk;
– learn and understand how to use crypto;
– practice risk management by having a strategy and sticking to it;
– only ever invest what you can afford to lose.
For early adopters, the sky is the limit. Be smart. Trade safe. DYOR and take profits to be a super successful investor at the best time crypto will ever see. Good luck as well!
Guest post written by Handy Andy
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