MicroStrategy is showcasing more interest in buying Bitcoin (BTC) as the digital token continues to break new records. The software technology company’s debt offering is now $900 million and it will be used to buy more Bitcoin.
Bitcoin soared above $50,000 on Monday. The digital token rally had grabbed the attention of large financial institutions as well as other businesses. Last week, Tesla bought $1.5 billion worth of Bitcoin. Meanwhile, MasterCard and Bank of New York both said that they’ll be accepting the digital token.
However, MicroStrategy was the first corporation ever to directly buy Bitcoin. The company raised $400 million in December to add it to its Bitcoin holdings. Meanwhile, Michael Saylor, CEO of MicroStrategy said that Bitcoin is a hedge against inflation and any potential devaluation in the US dollar. The software developer company currency owns over 70,784 Bitcoin, worth over $3.5 billion with the BTC current price.
MicroStrategy first bought Bitcoin for $16,000
When MicroStrategy’s closed its first Bitcoin deal, the digital token was trading at $16,000. Since then Bitcoin surged over 736%. Consequently, the firm’s market valuation rose from $2 billion in August to over $10 billion – as of this writing. Thanks to the Bitcoin bet – Michael Saylor who owns 2.4 million share stakes in MicroStrategy became a billionaire.
In an interview on Bloomberg Television, Michael Saylor, MicroStrategy Inc.’s chief executive officer said: “In an expansionary, monetary environment, you want scarce assets. The scarcest asset in the world is Bitcoin. It’s digital gold.”
“If we bought gold instead of Bitcoin, we would be down $2 billion. It would have been a disaster. Once people start thinking about what they want, which is a non-sovereign, safe-haven store of value, they’re going to realize that Bitcoin does the job of gold better, and you’re seeing all of the institutional flows move out of gold into Bitcoin,” Saylor added.
Bitcoin can be a risky investment
Although the price of Bitcoin is surging since the start of February, the digital currency can be a really risky investment. The cryptocurrency market is highly volatile, and since Bitcoin is decentralized; the price of the token can decline dramatically. For instance, In 2017, Bitcoin plunged from $17,000 to $3000 after a long rally.
Danyaal Rashid, head of Thematic Research at GlobalData wrote: “If Elon Musk can help dictate the price of this asset with a tweet or large order, the same could happen to send the price back down. The task of purchasing a vehicle should not be speculative. Consumers who may have thought of buying bitcoin to use as a substitute for fiat – could very easily end up with more or less than they bargained for.”