Crypto investment firm Galaxy Digital says Bitcoin has pulled off one of the most important events in its nearly 12-year history.
In a new market report from Galaxy Fund Management, portfolio manager Paul Cappelli points to the fact that software giant and intelligence firm MicroStrategy just purchased $250 million in Bitcoin as a monumental event that’s flying under the radar.
“…unbeknownst to many casual observers, August saw one of the most seminal and legitimizing events for the space to date. MicroStrategy Inc., a business intelligence software firm publicly traded on the NASDAQ (ticker: MSTR), announced a balance sheet investment of $250 million into bitcoin. This represents nearly 20% of the firm’s overall cash position, with CEO Michael Saylor citing that cash returns were fading amidst a weakening greenback.”
Galaxy Digital says the corporate Bitcoin buy could be a sign of what’s to come as a growing number of money managers question the future of the US dollar amid trillion-dollar stimulus measures and global economic instability.
“While it is unclear how many other companies have chosen to use working cash to invest in Bitcoin under the current macro environment, this could be an indication of what is yet to come as a sophisticated base of investors consider the long-term impact of inflation due to Covid-19, unprecedented government stimulus, and global political, social, and economic uncertainty.”
In a recent interview on the What Bitcoin Did podcast, the pseudonymous analyst PlanB also underscored the importance of the move. He says the investment is essentially an ETF, offering Wall Street investors a simple way to gain exposure to BTC.
“I was thinking banks, pension funds, maybe countries [would invest in Bitcoin]. But never, ever did it occur to me that listed companies would do that as well. Of course, they have the same problem with all that cash on their balance sheet. Especially in Europe, with negative interest…
And if there are listed companies, I noticed that a lot of people didn’t see the importance of what MicroStrategy did. But because it’s a listed company, it means that people can put Bitcoin or Bitcoin exposure in their pension funds. They could just call their broker and they can’t say ‘get me some Bitcoin in my pension fund,’ but they can say ‘get me these companies because those are my pension scheme.’ And in that way, you could see MicroStrategy as an ETF.”
In its announcement, MicroStrategy offered two primary reasons for its groundbreaking investment in BTC.
The firm says it believes the leading cryptocurrency offers not only a potential hedge against inflation, but also a higher chance of earning large returns when compared to other investments.
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