$ 1.2 billion MicroStrategy will hold Bitcoin as part of its cash reserves

MicroStrategy, an enterprise business intelligence (BI) application software provider valued at over $ 1.2 billion, said it will add bitcoin as part of its cash on hand and is likely to increase its exposure to the digital asset if market conditions prevail are cheap.

The new capital allocation for Bitcoin was announced by MicroStrategy President and Chief Financial Officer Phong Le during the company’s second quarter 2020 conference call on July 28, with the aim of increasing the company’s share buyback capabilities over the next twelve months .

As part of MicroStrategy’s cash allocation plan for that period, Phong Le noted that the company “will seek to invest up to an additional $ 250 million over the next 12 months in one or more alternative investments or assets that include stocks, Bonds, commodities such as gold, digital assets such as Bitcoin or other types of assets. “

Michael Saylor, Chairman and CEO of Micro Strategy, supported the company’s decision to increase its exposure to Bitcoin and related assets. According to Saylor, the recent influx of monetary stimulus from the US Federal Reserve and the fact that the central bank has no plans to hike rates anytime soon means investors will have to look elsewhere to increase yield.

He added:

If you have big dollar values ​​and are hoping for some kind of return, that has faded. Gold, silver and bitcoin show strength.

Saylor also admitted that the US dollar (DXY index) is weakening while at the same time the belief and fiat currency is dwindling across the market. As such, the CEO said it would be less cautious of the company continuing to hold a large portion of the USD in its treasury when there are investments that “cannot or are less likely to be blown away.”

MicroStrategy’s disclosure that it now holds Bitcoin comes from a stellar year for the cryptocurrency. Despite mounting economic uncertainty since the turn of the year, Bitcoin has seen impressive year-to-date (YTD) returns (% 55), further bolstering the safe haven narrative.

A market cap of $ 215 billion at press time also means Bitcoin’s market valuation has now surpassed that of a beverage company, Coca-Cola, and tech giant Intel.

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