MicroStrategy has been ready to HODL its bitcoin for at least a century.
Or so business intelligence company founder and CEO Michael Saylor said in an interview with CoinDesk on Tuesday shortly after announcing on Twitter that MicroStrategy was doubling its godfather’s cryptocurrency by buying $ 175 million more BTC.
“I want something that I could put $ 425 million into in 100 years,” Saylor told CoinDesk.
In the last two months, Saylor has turned his company̵
“If [my successor is] staring at this thing, it still works, ”he said.
“This thing” is a pile of 38,250 bitcoins. The listed company bought $ 250 million in value on August 11, days after telling shareholders that cash was no longer a safe haven for its excess $ 500 million. Tuesday morning, it bought $ 175 million more.
Read more: MicroStrategy acquires $ 175 million More in Bitcoin, increasing BTC Holdings to $ 425 million
Forget about parking the balance sheet surplus in inflation-exposed cash or low-yield bonds or over-extended technology stocks, Saylor said. In a market like this – and in the future he said it will probably come – there are only two good places to put excess cash at work: stock buybacks and bitcoin.
It’s a radical face for a man who seven years ago declared that the days of bitcoin were numbered.
An unlikely revelation
“I went down the rabbit hole” during COVID-19, Saylor said, admitting he was “wrong” for doubting bitcoin back in the $ 600 range.
“I wish I knew then what I know now,” he said.
The first step in his journey of conversion came from an unlikely source to a newly developed bitcoin maximist: the sale of the “Voice.com” domain to EOS creator Block.one for $ 30 million in July 2019.
Fast forward to 2020, and Saylor found himself reading up bitcoin. He learned so much about crypto as quickly as possible. Saylor said he pored over essays by “bitcoin luminaries”, listened to Nathaniel Whittemore’s and Anthony Pompliano’s cryptopodcasts, searched the internet for Peter Schiff’s bitcoin debates with Erik Voorhees, and lost himself in Andreas Antonopoulos’ media empire.
COVID-19’s global business problems were a blessing in disguise for MicroStrategy. Saylor said the company soon realized it had far more cash than it needed to operate in a new streamlined virtual first world.
Moving away from the dollar is now Saylor’s primary concern. He said he could not bear the risk of inflation.
In bitcoin, he and the company’s makers have found what they consider the obvious choice for the coming century with QE infinite.
“I cheerfully started assigning homework,” to MicroStrategy executives and executives, Saylor said. He staged “a series of learning exercises to get everyone going.” If MicroStrategy really wanted to move millions to bitcoin, then everyone had to be on board.
How to go all-in
There was a lot of reason to cover, Saylor said. But in three months, he and his executives had earned the crypto education and addressed the countless legal, deprivation of liberty and security issues that he said stand in the way of listed companies getting into crypto.
Then, in late July, executives unveiled the game plan for the company’s earnings call in Q2: MicroStrategy would seek to invest up to $ 250 million over the next 12 months “in one or more alternative investments or assets, which may include stocks, bonds, commodities as such as gold, digital assets such as [b]itcoin or other asset types, ”said MicroStrategy resident Phong Li on July 28.
It was a statement so cloudy in the company’s obscurity that no one really noticed the news.
A week passed before Castle Island Ventures partner Matt Walsh reappeared in the earnings call in a tweet. He noted how Nasdaq-traded stocks “diversified its cash holdings to include bitcoin.”
Walsh gave the news a double-eyed emoji. See this, he said.
Observers did not have to wait long.
Six days later, MicroStrategy poured a total of $ 250 million of its inflation-linked profit into bitcoin. Gone was the 12 month timeline and the promise of diversifying across gold and other alternative assets. All bitcoin, all the time.
By September, its board had recognized bitcoin as MicroStrategy’s primary financial reserve and suggested in an SEC filing that more purchases could be on the way.
Read more: MicroStrategy tells the SEC it could raise $ 250 million. Bitcoin reserves
It shattered the $ 250 million self-imposed bitcoin ceiling just hours later.
At press time, MicroStrategy has converted $ 425 million into bitcoin. The stock has risen 30% since its first bitcoin purchase on August 11th. It rose 9% on Tuesday.
Other listed technology companies – think Apple and Google – park billions of surplus capital in cash and leave it there for years. But Saylor did not want to leave MicroStrategy’s millions in a bank account where the inflation ghost could slowly remove it.
“We just had the awful realization that we were sitting on top of a melting $ 500 million ice cube,” Saylor said. MicroStrategy has settled on bitcoin as a treasury alternative.
“This is not a speculation, nor is it a hedge,” Saylor said. “This was a deliberate corporate strategy to adopt a bitcoin standard.”