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On March 12 this year, MicroStrategy announced that it had purchased 262 bitcoins for $15 million. This was not the first time the company had purchased bitcoins. Together with previous purchases, its holding cost was about $24,000 per bitcoin. At the current price, it has made a total profit of nearly $3 billion, with a return rate of more than 135%, exceeding that of most US listed companies. MicroStrategy now owns about 91,326 bitcoins. MicroStrategy is the first listed company in the world to purchase Bitcoin as an asset allocation. It is also the company that currently holds the most Bitcoin in the world. And it is still continuously purchasing Bitcoin. What is the purpose? Today, let us review the story of MicroStrategy, its founder and Bitcoin. 01
MicroStrategy's founder is both powerful and controversial, and dreams of changing the world Michael Saylor was born on February 4, 1965 in Lincoln, Nebraska. At the age of 22, he graduated from MIT with a double degree in aeronautics and astronautics. Later, when Saylor was working as an internal consultant for an American chemical company, he found that there was a shortage of professional tools on the market to help companies analyze data and business. So he resigned and founded MicroStrategy, becoming the company's CEO and chairman of the board. In 1998, Microstrategy went public and its stock price soared. Thaler's net worth increased accordingly, and he was known as one of the richest people in Washington. However, later on, some of his actions were controversial. In 2000, MicroStrategy was fined $11 million by the SEC for false accounting. Surprisingly, Saylor seems unaffected and insists that he is just changing the world. In addition, Saylor transferred 50,000 shares of MicroStrategy to a company he controlled in 2020, which aroused public suspicion and caused the stock price to fall. At the same time, Saylor resisted the strict lockdown measures during the outbreak of the new crown epidemic, which also made him questioned. Although 58-year-old Saylor is controversial, he is still the most influential "top man" in MicroStrategy. With the dream of changing the world, he has raised the small flag of entering the field of cryptocurrency. 02
Bitcoin views range from criticism to enthusiastic supporters It is understood that Saylor was not optimistic about cryptocurrencies at first. In 2013, Saylor said on his Twitter that Bitcoin would not last long and would suffer the same consequences as online gambling sooner or later. It wasn't until 2015 that Microstrategy's business began to face a crisis. It is reported that in 2015, the company's revenue was US$134 million; in 2018, the revenue was US$3.981 million.
In 2019, the loss was 1 million US dollars; in the third quarter of 2020, the revenue loss was approximately 14.02 million US dollars. In addition, he felt that the global economy was full of uncertainty at the time. With the blessing of internal and external troubles, after comparing many possible value stores, Microstrategy decided to use Bitcoin as the final choice. Therefore, on August 11, 2020, Saylor tweeted that Microstrategy accepts Bitcoin as a fiscal reserve asset. At the same time, he set the top tweet to the following content: Bitcoin is a group of wasps serving the goddess of wisdom, feeding on the fire of truth, hiding behind a wall of crypto energy, becoming smarter, faster, and stronger at an exponential rate. MicroStrategy once said that it does not plan to sell Bitcoin in the short term and plans to hold it for 100 years. Saylor also said that the decision to invest in Bitcoin was a unanimous decision made by many people within the company. This is a company strategy, not a simple bet, and it will consider buying more meaningful assets such as Bitcoin in the future. Thus, Microstrategy began its journey of purchasing Bitcoin. On August 11, 2020, MicroStrategy announced that it had purchased 21,454 bitcoins at a cost of $250 million;
On September 14, 2020, MicroStrategy announced again that it had purchased 16,796 bitcoins at a cost of $175 million;
On November 4, 2020, MicroStrategy announced the purchase of 2,574 bitcoins at a cost of US$50 million;
On December 21, 2020, MicroStrategy announced that it had purchased 29,646 bitcoins at a cost of $650 million;
… Of course, the purchase of Bitcoin also brought MicroStrategy considerable benefits. In addition to the attractive increase in Bitcoin itself, there is also the rise in stock prices after the release of this news. Since last year, the stock price has risen from around US$120 before buying Bitcoin to the current (as of March 23) record high of US$1,272.94. As a listed company, this move not only triggered other companies to follow suit, but also brought new growth momentum to the digital asset market represented by Bitcoin. 03
Ethereum has many competitors. Bitcoin is a million times better than gold. Saylor’s optimism about Bitcoin is obvious to all, but his “all in Bitcoin” approach is puzzling. Why hasn’t he thought about allocating other digital assets, such as Ethereum, which may be a substitute for Bitcoin? Saylor said that he did not compare Bitcoin and Ethereum because in his mind, Ethereum and other digital currencies are still constantly improving their functions and striving to be recognized by everyone. In addition, they have many competitors and are difficult to compare with Bitcoin, which is "in its heyday". In addition, gold, which has many characteristics such as portability, good ductility and malleability, has become the natural choice of value storage in the minds of humans for thousands of years. However, Saylor said that using gold to store value is now outdated, and Bitcoin is a million times more perfect than gold. This is not only reflected in many features, such as Bitcoin in redistribution, saving money storage costs, reducing transaction costs, etc. But also for the U.S. Treasury, cryptocurrencies such as Bitcoin are obviously more advantageous because they are designed not to cause deflation. He also said that Bitcoin, as a non-sovereign, safe-haven value storage, can play a better role than gold. In the near future, once everyone has figured out what they want, they will replace gold with Bitcoin. 04
summary Currently, more than half of MicroStrategy's stock value comes from Bitcoin; Tesla CEO Musk said Bitcoin is a good thing; Meitu also spent about $40 million on buying BTC and ETH on March 7 this year... Are these institutions rushing into cryptocurrencies a self-help behavior of "seeking attention" in the market development, or is it a well-considered optimism about the future development of crypto assets such as Bitcoin? What do you think? Feel free to share your views in the comments section. |
