Turning Cash Reserves Into Bitcoin

It was quite the day when I woke up to find that a publicly traded company called MicroStrategy had turned $425 million dollars of cash reserves into bitcoin. To be honest, this came out of left field. I had a feeling this would happen someday, I just didn’t think it would be so soon. Just eleven years after the launch of Bitcoin, and companies are already buying it as a wealth preservation strategy. BUT WHY!?

The Myths of Bitcoin

Here you will find a list of common critiques that Mrugakshee and I aim to tackle, dispel, debate, and educate on.

• Bitcoin is too volatile to be money

• Bitcoin is not a good store of value

• There is no intrinsic value of Bitcoin

• Bitcoin isn’t backed by anything

• Bitcoin is mostly used by criminals and drug dealers

• I can’t buy a coffee with Bitcoin

If any one of the above statements were true, MicroStrategy would not have adopted Bitcoin as their primary reserve currency. They would not have bought $425 million dollars worth of it.

MicroStrategy Doubles Down with Debt

If you thought that buying $425 million worth of Bitcoin was crazy, then just wait until you hear what they’re planning on doing next. On December 7th, MicroStrategy CEO, Michael Saylor announced that they are raising $400 million worth of debt to… wait for it … buy more bitcoin.

If this narrative is leaving you confused, (we don’t blame you), then perhaps you may want to consider checking out our podcast episode on MicroStrategy, or the case study that we published on MicroStrategy. Inside this case study, we walk the reader through the set of decisions, and points of analysis that the MicroStrategy board went through in order to arrive at the decision to buy bitcoin.

Happy Reading!