MicroStrategy has announced its plans to invest $250 million in “alternative investments or assets” — while specifically mentioning Bitcoin (BTC) as a possible investment.
The newsworthy mention came in the form of an earnings call on June 28, where the $1.2 billion company’s president and chief financial officer, Phong Le, stated:
Overall, we’ve returned more than $245 million to shareholders through the repurchase of 1.8 million shares since the fourth quarter of 2018. Our capital allocation strategy going forward is to return a portion of this excess capital to our shareholders and invest a portion in assets with higher return profiles in cash. Accordingly, today, we are announcing a capital allocation strategy under which we plan to return up to $250 million to our shareholders over the next 12 months. In addition, we will seek to invest up to another $250 million over the next 12 months in one or more alternative investments or assets which may include stocks, bonds, commodities such as gold, digital assets such as Bitcoin, or other asset types.
Hedging against a weakening dollar
Additionally, the high-value company — which helps enterprises build and deploy analytics and mobility apps — noted the strength of Bitcoin as a hedge against inflation and the weakening United States dollar in the face of a prolonged COVID-19 pandemic, central bank printing, political tension, and a continuing trade war with China.
“As Jerome Powell said, we’re not thinking about raising interest rates and we’re not even thinking about thinking about raising interest rates,” a transcript of the earnings call reads. “And not being the case, if you’re — if you have large dollar values and you’re hoping for any kind of return on them, that’s faded. Gold, silver, and bitcoin are showing strength.”
MicroStrategy also noted that “gold, silver, bitcoin, and equities have all been accreting as the dollar has been weakening.”
More validation for Bitcoin
Though MicroStrategy didn’t explicitly state that it would be investing in Bitcoin, the explicit mention of it as a possible investment (along the likes of gold) serves as another form of validation for BTC.
The first and foremost cryptocurrency has performed superbly following the COVID-19-driven market crash in March, and institutional investors haven’t been shy about piling on.
It stands to reason that this trend will likely continue as Bitcoin solidifies itself as a viable alternative investment.
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