Earlier this week, Bitcoin (CCC:BTC-USD) fell below $ 30,000 for the first time since January.
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It actually traded below $ 29,000 and fell into negative territory for the year.
If you haven’t followed the world’s first and largest cryptocurrency, that’s a steep drop of over 50% in just over two months.
The dip below $ 30,000 was brief, and the world’s largest cryptocurrency bounced back above it within hours. But that was still enough to panic many investors.
Not us. And not the jackpot either …
MicroStratégie (NASDAQ :MSTR) is a $ 5.4 billion software company that is a pioneer in companies that transfer some of their money to Bitcoin. Co-founder and CEO Michael Saylor saw the undeniable opportunity and invested an additional $ 489 million in the company’s latest Bitcoin purchase.
In fact, he didn’t even wait for the bottom. MicroStrategy announced its purchase on Monday – a full day before the break below $ 30,000. He bought 13,005 Bitcoins at an average price of $ 37,617.
Of course, the company could have saved a few dollars by waiting a few more days. But marketing, especially cryptos, is impossible to time. And when you understand the incredible wealth-building opportunity that Bitcoin holds, saving a few extra dollars – even when it’s over $ 100 million – ultimately doesn’t matter.
With its latest purchase, MicroStrategy has over 105,000 Bitcoins. At current prices, it’s worth $ 3.4 billion. And the company “only” paid around $ 2.7 billion to acquire them.
A gain of 26% already, even with Bitcoin far from its highest …
Well below what I think it will be a year from now.
Michael Saylor said at the recent Bitcoin 2021 conference in Miami that he believes it is better to hold Bitcoin than cash, given the virtual certainty that a dollar today will be worth less in a dollar. year.
Here is what he said …
… I don’t want to decapitalize the business. I want to keep the capital or increase the capital… The big breakthrough is that I can convert my money from a liability to an asset… And then we realized that if this asset was going to increase by more than 10% per year and you could borrow money at 5% or 4%, or 3%, or 2%, then you should pretty much borrow as much money as you can and turn it into an asset.
Well, that’s exactly what he did. A few days after Bitcoin 2021, MicroStrategy announced that it would issue an additional $ 500 million in debt to turn into Bitcoin. And earlier this week, he announced the completion of that process.
This is how much Saylor believes in the superiority of Bitcoin over cash.
MicroStrategy may have been the first, but it’s not the only company to diversify its balance sheet outside of cash.
Square: a forerunner
Square (NYSE :SQ) helped launch the corporate crypto movement last year.
And in February, Tesla (NASDAQ :TSLA) joined the club when it bought $ 1.5 billion worth of Bitcoin to “further diversify and maximize returns on our cash.”
I expect more companies to add Bitcoin and other leading cryptocurrencies – known as altcoins – as alternatives to cash … and as investments that are solid in themselves.
We can already see it on Wall Street. Paul Tudor Jones, one of the most successful and influential investors in history, is a big buyer of Bitcoin. JPMorgan CEO Jamie Dimon called anyone who owned Bitcoin a “dumb” in 2016. Today, it’s one of his company’s biggest holdings, and JPMorgan even has its own cryptocurrency.
ARK Invest, a company I respect, bought one of Bitcoin’s recent dips. So is Ray Dalio, co-chief investment officer of Bridgewater Associates, the world’s largest hedge fund. I believe it was his first Bitcoin purchase.
Businesses, consumers, big investors and even governments and regulators are finally starting to understand what’s going on. Bitcoin and altcoins can no longer be ignored by large corporations.
We’ve seen fund managers, hedge funds, large institutions, and publicly traded companies turn to cryptocurrencies and their prevailing underlying technology. And it sparked real seismic change in the industry.
The big money realize that if they don’t adopt a plan, they will be left behind.
The same goes for smart investors. Not investing in cryptocurrencies and blockchain today would be like not investing in the advent of the Internet.
Regular readers know that I am a Bitcoin bull. And I expect even bigger payouts from lesser-known altcoins that haven’t received 1 / 100th of the attention Bitcoin has.
They also know that I strongly believe that Bitcoin will hit $ 100,000. I suspect companies like MicroStrategy have a similar view.
Bitcoin $ 100,000 would be a 3-fold increase from current prices. And some altcoins should multiply their money even more.
This is the nature of hypergrowth trends, stocks and cryptocurrencies. As long as their potential to transform much of our world remains on track, I expect to see further significant gains in the years to come.
All of this means that now is the time to be at the forefront of the next big tech revolution that will take hold in the roaring 2020s.
As of the publication date, Matthew McCall does not have (directly or indirectly) any position in any of the stocks mentioned in this article.
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