NASDAQ-Listed Company Purchased $250M In BTC As Inflation Hedge

A NASDAQ-listed company has just purchased $250 million in Bitcoin as a part of their asset allocation strategy and to have a hedge against the upcoming inflation. In our latest Bitcoin news, we find out more.

Microstrategy, the NASDAQ-listed company, bought Bitcoin as a part of its planned capital allocation strategy. According to an official press release, the company purchased 21,454 BTC at $250 million and stated that the number one cryptocurrency is seen as an investment asset and will be the first main reserve in its treasury. The company’s buying bitcoin came after an earlier statement made in late July when they revealed they will adopt a two-way capital allocation strategy which will see the purchase of the stock worth $250 million and an additional $250 million used for investing in other assets.

The company’s CEO Michael Saylor commented on the decision to go for Bitcoin as the reason for investing in the cryptocurrency was because it had unique qualities that served as a hedge against inflation. Bitcoin provided a higher return on investment than any other asset. Saylor explained:

 “Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders. This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

 

In the meantime, several members of the crypto community reacted to the news of Microstrategy buying Bitcoin. The CEO of Shapeshift Erik Voorhees stated that:

“MicroStrategy is this year’s Bitcoin Sign Guy”.

The company is listed on Nasdaq and goes under the MSTR ticker with a market capitalization of around $1.3 billion. Institutional adoption still remains one of the biggest concerns for bigger depth into crypto as businesses like this one keeps BTC as an investment asset on the corporate balance sheet which is a preliminary step in the other deep pockets that enter into Bitcoin’s positions especially as central banks will set negative rates.

There is also a growing interest in crypto by institutional investors. A study carried out by Fidelity Investments shows that 36% of the institutional investors are holding on to crypto with Bitcoin being the most popular one among most of the respondents. Another study by PricewaterhouseCoopers and Elwood Asset shows that the surge in assets under management of crypto in 2019 showed an increase in interest in crypto.