The CEO of MicroStrategy, Michael Saylor, compares Bitcoin to digital gold by buying 21,454 BTC, which is an equivalent of $250M. Saylor confirmed that they switched to Bitcoin as its reserve currency, which prompted it to purchase on August 11th.
Being the biggest publicly traded business intelligence company, its move to use Bitcoin as a treasury reserve asset means a lot and might be a source of influence.
Saylor confirmed with confidence that Bitcoin was a digital gold, according to a press release that was done on August 11th. The company chose Bitcoin over fiat currencies and safe-haven assets such as gold. He said Bitcoin is not comparable to any other money that exists in the market.
He bases his argument on Bitcoin being built on digital scarcity, which sets it apart from any other currency in existence. The structure will fuel the value of the currency to increase with time, despite its volatility.
The fact that MicroStrategy chose Bitcoin does not mean it did not try other cryptos as well. Some of the factors that made the company accept Bitcoin over other cryptos are acceptance rate, network dominance, brand recognition, architectural build, and technical utility. That makes Bitcoin more persuasive.
Are crypto’s better?
Many Bitcoin enthusiasts received the news with joy when MicroStrategy was clear on why it replaced fiat with Bitcoin.
The big purchase of Bitcoin end of July is very symbolic as it bought 21, 434 BTC, which will push it to have a significant market share making it control about 0.1% of the overall market supply. This will make it hard for competitors to match. That’s a dominating strategy that many companies will not be able to implement.
According to Saylor, of course, they have valid reasons to switch to crypto. Covid-19 was the main highlight of why it is a hazard to rely on fiat currencies. The economic and public health crisis, and unprecedented government fiscal stimulus is the main challenge. That makes fiat currencies to depreciate in the long-term.
Will MicroStrategy influence the market?
Some many analysts and investors are switching to Bitcoin as a hedge. MicroStrategy, in particular, chose that path to avoid inflation. Saylor believes that eventually, any serious public company will adopt the same. So far, the value of Bitcoin is following Central banks inflating balance sheets very closely in 2020.
Analysts believe that the trends are going to change as far as Bitcoin adoption is concerned. Bitcoin has proved itself to be very versatile though its eleven-year lifespan. According to miners, the security and market position of Bitcoin is likely to increase with time.