MicroStrategy Mentions Exploring Alternative Assets
MicroStrategy mentions on Q2 earnings call that it is exploring purchasing alternative assets including Bitcoin, first public signal from CEO Michael Saylor.
On July 28, 2020, MicroStrategy Mentions Exploring Alternative Assets.
Saylor's comments indicated that the company's internal analysis and deliberation about Bitcoin as a treasury reserve asset—which had been occurring privately for months—was nearing a decision point. The mention of Bitcoin on an earnings call for a publicly traded business intelligence software company was unusual and significant, signaling that cryptocurrency was being seriously considered at the highest levels of corporate strategy.
MicroStrategy's consideration of Bitcoin reflected CEO Michael Saylor's growing conviction that holding cash was a losing strategy in an environment of negative real interest rates and aggressive monetary expansion. The company had approximately $500 million in cash and cash equivalents on its balance sheet, and Saylor had become increasingly concerned that inflation—whether officially measured CPI or real inflation in asset prices—was eroding shareholder value.
He had been studying various alternatives including bonds, stocks, commodities, real estate, and Bitcoin, analyzing their properties as stores of value and hedge against currency debasement. Saylor's analysis led him to conclude that Bitcoin's fixed supply, digital portability, growing institutional acceptance, and performance history made it superior to other alternatives for preserving and growing purchasing power over time.