- Purchase of 21,454 Bitcoin (BTC) was made with 78 thousand transactions and then in 18 on-chain to place them in cold storage.
- Experts expect a chain effect from other companies such as Twitter and Square after the MicroStrategy move.
Perhaps the biggest Bitcoin purchase of 2020 has been completed by Nasdaq giant MicroStrategy. The company’s CEO, Michael Saylor, has revealed new details about the purchase of 21,454 BTCs. Through his twitter account, Saylor said the purchase was completed through, have assumed community members, an exchange with 78,388 off-chain transactions, and 18 on-chain transactions. Therefore, Saylor has concluded that Bitcoin has the right capabilities to be a valuable reserve asset.
In a recent interview with co-founder of investment firm Morgan Creek Capital, Saylor shared some additional details. While refraining from revealing information that could compromise the company’s security, Saylor emphasized the work that the MicroStrategy team did to acquire Bitcoin. In this way, the company’s purchase was able to make an unnoticeable impact on the market. Saylor added the following:
If you were in my position … you’re gonna go and you’re on you’re going to audition a bunch institutional-grade exchanges. You’re going to work through and look for institutional-grade custodians Yeah, you’re going to look at you know all of the security issues, all the technology issues, etc. You’re gonna think about the team you’re gonna build a relationship with them…
As reported by CNF, MicroStrategy made the acquisition of the 21,454 BTCs as part of a new capital reallocation strategy. The company’s goal is to make Bitcoin its primary treasury reserve asset to protect against the inflationary policies of the U.S. Federal Reserve. The company issued a statement saying that these policies will lead to an increase in inflation and, as a result, the dollar (USD) will lose value as a currency.
Will other companies buy Bitcoin as store of value?
In the crypto community, the purchase of MicroStrategy has been celebrated and is considered an important step in the mass adoption of the cryptocurrency as a store of value. According to Bitcoiner Conner Brown, MicroStrategy has “opened the door” for other technology companies on Nasdaq to convert their cash into Bitcoin.
Among the companies Brown believes could pursue a similar strategy are Twitter and Square, both led by Jack Dorsey, known for his pro-Bitcoin approach. Brown also noted that the purchase of 24,000 Bitcoins with minimal impact on the market shows that “backends have been improved since 2017”. Brown said that there is still a possibility that governments will go after the people’s Bitcoin, but that cryptocurrency is reaching a point where it will be “untouchable”:
Ask yourself, how many companies have to hold Bitcoin before it becomes untouchable in congress? Five Percent? Ten Percent?
In addition, experts expect a positive impact on the price of Bitcoin. Several have noted that MicroStrategy now owns 0.18 percent of the total Bitcoin supply. If other companies worth millions follow suit, the market could experience a supply shock. Therefore, the price of BTC will rise in relation to the growing demand. In that regard, MicroStrategy’s CEO has already confirmed that the company plans to keep its assets-at-risk in storage and not as an active part of the cryptocurrency trade:
If Bitcoin is treated as a treasury reserve asset, based on our model, 99.98% of all transactions will be off-chain, and assets-at-risk will be in cold storage 99.92% of the time.