MicroStrategy Declares War On The Fed
MicroStrategy shook the financial world twice in the last 6 weeks by using almost all of its equity to buy Bitcoin.
The Nasdaq-listed analytics software firm doubled down on its original purchase of $250m in Bitcoin, by spending a further $175m on the leading cryptocurrency.
To date, MicroStrategy has bought 38,250 bitcoins at an aggregate price of $425 million, which has led some to calling it a declaration of war.
MicroStrategy Declares War on The Fed
MicroStrategy’s bold move surprised everyone, even the most ardent Bitcoin Maximalists. No doubt everyone expected institutional money to slowly start buying up Bitcoin, but a public company spending almost half a billion dollars on Bitcoin wasn’t expected.
The Bitcoin purchase has rocked the financial world, not just the Bitcoin space, and led Bitcoin permabull Max Keiser to claim it was declaration of war on the Fed by MicroStrategy.
Keiser, who has been recommending buying Bitcoin since it was a dollar back in 2011, believes its now every CEO and CFO’s fiduciary duty to deploy idle cash in Bitcoin and save their own ‘melting ice cube’.
Keiser was making reference to MicroStrategy CEO Michael Saylor’s ‘melting ice cube’ analogy for other public firms’ treasuries.
Speaking on the Pomp Podcast, Saylor said ‘There are 3500 publicly traded companies and there’s $5 trillion in their treasuries and it’s all melting and at some point, you have a fiduciary obligation to not lose the money.’
Everyone Is Now Considering Buying Bitcoin
It’s without question that all CEOs and CFOs are now taking note. If they weren’t before, they are now looking into how to buy Bitcoin.
MicroStrategy’s stock price has risen more than 30% since news broke of its first move into Bitcoin, so the Kodaks of this world will no doubt be licking their lips just at that thought.
But all CFOs realize their cash treasuries are ‘melting’ and have to deploy it elsewhere.
Gold -Why not? Even Warren Buffet has gotten into gold for the first time, but gold didn’t interest Saylor one bit.
Bitcoin – Why not? Saylor is more bullish on Bitcoin than even Peter Schiff’s gold façade appears:
‘Bitcoin isn’t 10x better than gold, it’s 100x, maybe it’s 1000x better than gold,’ said Sayor. How about that, Peter?
Of course Bitcoin is volatile, and that’s why MicroStrategy’s huge purchase shocked everyone. But Saylor expects the money coming into the market over the next decade will dampen volatility, but ‘if there is any it’s just going to be to the upside.’
Other Corporations Will Follow Suit And Buy Bitcoin
MicroStrategy putting $425m into Bitcoin will motivate other CEOs and CFOs to quickly get around the table, and set out a strategy to buy Bitcoin.
Not only is it their fiduciary duty, but many of them are at the command of their shareholders who will likely start demanding Bitcoin has a place on the books of each company.
Michael Saylor has opened the doors for every other institution now. Some were considering it before, but nobody wanted to be first to buy Bitcoin, and far more likely nobody will want to be last.
Time For a Bitcoin Standard
Speaking of the acquisition, Saylor said, ‘This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a Bitcoin Standard.’
Wall Street legend Paul Tudor Jones rocked the ship earlier this year when he likened Bitcoin to being the ‘fastest horse’, and saying it was time to back it.
Saylor says it took MicroStrategy 12 weeks to make the move into Bitcoin, but will probably take bigger institutions between 6-12 months from start to finish to adopt a Bitcoin Standard.
So the next year is going to be really interesting.
We shouldn’t expect huge moves like MicroStrategy’s, but corporate giants allocating just 1-5% of their melting ice cube will send the price of Bitcoin to much greater heights.
Whether it’s war, or just deserting a melting ice cube, corporations are going to adopt a Bitcoin standard.
Question is: When will the Fed wave its white flag and declare its Bitcoin holdings?
Author: Tommy Limpitlaw
How do you make money with Bitcoin?
There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.
What’s the point of Bitcoin?
Bitcoin is a decentralized money. A money that nobody can control or manipulate, and a money that nobody can print and devalue. It’s also not necessary for any third party to verify transactions, so it makes it much faster and cheaper to send value. It’s also money built on the Internet: a society of almost 5 billion people.
Why should I buy Bitcoin?
People who understand Bitcoin buy Bitcoin because it is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent. There are many more reasons why people buy Bitcoin, and a deeper dive before doing so is recommended.
Can you buy less than 1 Bitcoin?
Yes. Every Bitcoin can broken down into 100 million bits. They are known as satoshis, after the pseudonymous creator Satoshi Nakamoto. And some companies will let you buy as little as $1 worth of Bitcoin, which at time of writing is worth about 11,000 satoshis. There are many companies that have a system for dollar cost averaging (DCA). This is a great way to buy Bitcoin, and is known in the space as ‘Stacking Sats’. Basically, what you do is set up small automatic, recurring payments to buy Bitcoin (or sats), and you DCA over time.