In recent weeks, MicroStrategy seems to be a bit more active in the crypto sphere and it all began when they converted their primary asset base into Bitcoin. However, this doesn’t mean that the business intelligence software provider is not keeping up with the possible swings in the price of Bitcoin. In fact, they are ready to sell at a moment’s notice. Earlier this week, the chief executive at MicroStrategy, Michael Saylor, discussed the company’s shocking move of holding more than $400 million in Bitcoin. He explained that they consider Bitcoin to be a safer asset, especially when you compare it to gold and cash.
The CEO explained that he had chosen to make the shift to Bitcoin in part, because he had seen how the traditional assets had suffered due to the impact of the coronavirus. Before the COVID-19 pandemic hit, the firm’s total assets had been about $500 million and they had chosen to invest them primarily in short-term government securities. However, when the pandemic hit, it caused the yields on the securities to decline and Saylor was well-aware that the company would have to shift to something more reliable. He said that once the return on the treasury went in excess of 10%, they realize that what they were doing was completely irrelevant.
Saylor said that it had felt as if they had a $500 million ice cube that was melting. Eventually, the company found the safety they were looking for with Bitcoin. In July, the company made a formal announcement that they had switched their primary asset base to the top cryptocurrency. They bought approximately 21,454 BTC, which had a market value of $250 million at that time. Amongst other things, the tech giant based in Virginia, highlighted that they had found Bitcoin to be a dependable store of value.
MicroStrategy seems to have doubled down in the weeks since then. The company disclosed in a filing with the Securities and Exchange Commission (SEC) that they could buy more of the asset. However, this would only happen after they have assessed their business strategy and cash needs. Only days later, the company bought an additional 17,000 BTC tokens, which brought their total Bitcoin haul to about $425 million. Considering that the company has chosen to put all of their eggs in the crypto basket, people are curious about whether the CEO has any concerns about the famed volatility of Bitcoin. After all, a sharp drop in Bitcoin’s price could end up gutting their firm.
But, Saylor has brushed off all the concerns and he said that they were ready to liquidate Bitcoin any hour of the day, any day of the week. He said that if they wanted to liquidate $200 million of Bitcoin, they could do it within a day. He added that the volatility of the crypto wasn’t a problem because they could move away quickly and get their money back. The CEO also said that they weren’t committing to Bitcoin as a passion project. He noted that their decision to invest in Bitcoin was only because of the stability it had shown in the last few months.