MicroStrategy is made to HODL its BTC for at least a century.
Or so stated the business intelligence firm’s founder and CEO, Michael Saylor, in an interview with CoinDesk, soon after he declared on Twitter that MicroStrategy was growing down on the godfather crypto with the investment of $175 million more BTC.
“I need something that I could put $425 million toward for 100 years,” said Michael Saylor.
In the last two months, Michael Saylor has changed his company’s once-sleepy cash excess in an almost half-billion-dollar play on bitcoin; the “digital gold” Michael Saylor is sure will outlast his tenure.
“If [my successor is] looking at this point, it’s still running,” he said.
“This thing” is a large pile of 38,250 BTCs. The publicly traded firm purchased $250 million value on Aug. 11, days after saying stockholders that cash was no longer a secure place for its excess $500 million. Tuesday morning, it purchased $175 million more.
Saylor said neglect about parking the balance sheet surplus in inflation-prone cash or low-yield bonds or overextended tech stocks. In a business like this – and in the future he stated is sure to come – now only two right places to put excess cash to go: stock buybacks and BTC.
It’s a drastic about-face for a man which seven years ago revealed bitcoin’s days were numbered.
What sparked the change?
An unlikely revelation
“I went down the rabbit hole” as COVID-19, Michael Saylor stated, admitting he “was wrong” to have doubted BTC in the $600 area.
“I wish I understood then what I understand now,” he stated.
The initial step in his journey to progress came from an unlikely source for a recently minted BTC maximalist: The deal of the “Voice.com” domain to EOS inventor Block. one for $30 million in July 2019.
Fast forward to 2020, and Saylor got himself reading up on BTC. He studied as much regarding crypto as fast as he could. Saylor stated he pored over articles by “bitcoin luminaries,” listened to Nathaniel Whittemore’s and Anthony Pompliano’s cryptocurrency podcasts, and searched the internet Peter Schiff’s BTC debates with Erik Voorhees, and lost himself in Andreas Antonopoulos’ media empire.
COVID-19’s global market woes were a blessing for MicroStrategy. Saylor told the firm quickly realized it had far more money on hand than is required to work in a new streamlined virtual-first experience.
Shifting away from the dollar is presently Saylor’s main concern. He stated he couldn’t stand the inflationary chance.
In BTC, Michael Saylor and the firm’s decision-makers have seen what they believe the obvious choice for the future century of QE space.
“I began to assign homework” to MicroStrategy’s businesspeople and directors cheerfully, Saylor stated. He staged “a series of learning activities to make everyone up to speed.” If MicroStrategy was going to move millions in bitcoin, then everyone had to be on board.
How to go all-in
There were a lot of areas to cover, Saylor, stated. But in three months, he and his officials had increased the crypto education. They dealt with the myriad legal, custodial, and security issues that he said stand-in publicly traded companies getting into crypto.
Then, in July, officials revealed the game plan on the firm’s Q2 profits call: MicroStrategy would try to spend up to $250 million in the following 12 months “in one or more alternative investments or assets which may involve stocks, bonds, commodities such as gold, digital assets such as BTC, or additional asset types,” MicroStrategy resident Phong Li stated on July 28.
It was a statement so clouded in corporate vagueness that nobody noticed the report.
A week spent before Castle Island Ventures partner Matt Walsh resurfaced the profits call record in a tweet. He saw how the Nasdaq-traded stock was “diversifying its cash holdings to include bitcoin.”
Walsh gave the report a double-eye emoji. Watch this, he was stating.
Observers didn’t have to wait long.
Six days later, MicroStrategy poured all $250 million of its inflation-hedging surplus in bitcoin. Gone was the 12-month timeline and the commitment to change across gold and other alternative assets: all BTC, all the time.
Begin September, its board of directors had accepted bitcoin as MicroStrategy’s first treasury reserve and indicated that more buying could be on the way in an SEC filing.
It broke the self-imposed $250 million BTC ceiling mere hours later.
As of press time, MicroStrategy has turned $425 million in BTC. The stock has risen 30% since its first BTC 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 did not want to leave MicroStrategy’s millions in a bank account wherever the specter of expansion could gently whittle it away.
“We recently had the awful recognition that we were sitting on top of a $500 million ice cube that’s melting,” Saylor stated. MicroStrategy has settled on BTC as a safe alternative.
“This is not a thought, nor is it a hedge,” said Saylor. “This was a planned corporate tactic to adopt a bitcoin standard.”
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