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Nasdaq-Listed MicroStrategy, Wary of Looming Dollar Inflation, Turns to Bitcoin and Gold
“If you have large dollar values and you're hoping for any kind of return on them, that's faded,” said CEO Michael Saylor. “Gold, silver and bitcoin are showing strength.”
By Danny Nelson
Updated Sep 14, 2021, 9:40 a.m. Published Aug 5, 2020, 6:55 p.m.
Publicly traded business intelligence company MicroStrategy said it will invest $250 million of its excess cash in bitcoin, gold and other “alternative assets” over the next 12 months as a hedge against U.S. dollar (USD) inflation.
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- CEO Michael Saylor, who unveiled MicroStrategy's new capital allocation strategy on a July 28 earnings call, said the weakening USD is no longer a tenable place to park MicroStrategy’s sizable cash reserves. (The firm is sitting on $500 million).
- Near-zero interest rates, infinite helicopter money and the specter of coming inflation are all forces Saylor said are chipping away at the dollar. “It wouldn't be prudent to continue to hold a large portion of USD” in the current environment, he said.
- While USD yield has effectively gone negative, bitcoin, gold and silver have been gaining strength, even if they may prove more volatile havens, Saylor said. He said bitcoin’s 21 million hard cap bolsters the cryptocurrency’s appeal as an inflation hedge.
- “It makes sense to shift our treasury assets into some investments that can't be inflated away,” Saylor said.
- Saylor indicated his bitcoin revelation came after his firm sold the domain “Voice.com” to crypto project Block.One for $30 million in July 2019.
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