American enterprise software company Microstrategy, listed on the Nasdaq, announced that it had bought over $ 250 million worth of Bitcoin this year, an announcement that drove its share prices up 10 percent.
Company buys Bitcoin and looks to the future
As Microstrategy announced on Tuesday, Microstrategy said Bitcoin is now a cornerstone of its financial strategy for years to come, especially as the US grapples with the bad effects of the coronavirus pandemic and the risks of overinflation.
The company said Bitcoin’s “special properties” convinced the company that investing in the cryptocurrency would not only provide reasonable inflation protection, but also the prospect of higher returns than other investments. In total, the company received over 21,454 bitcoin for a total purchase price of $ 250 million, including fees and expenses. Michael J. Saylor, the CEO of MicroStrategy, pointed out the company’s investment in Bitcoin as part of the new capital allocation strategy that maximizes shareholder value.
Well thought out decision
But the decision to buy Bitcoin for the company was not made overnight, he noted. Instead, the company spent “months” determining the capital allocation and saw the enormous economic factors – such as excessive money printing and a grim economic forecast – as the main drivers behind its decision.