“Why The Huge Spike In Bitcoin?”
That’s what a friend asked me as Bitcoin reached $28k for the first time. Below is how I replied.
In 2017, the speculative frenzy was largely driven by retail investors. This year is different because institutions and corporations are adopting Bitcoin. Institutions see Bitcoin’s potential as a global store of value and a hedge against inflation. We are witnessing historic monetary inflation. 24% of all existing dollars were printed in the last 12 months.
The risk/reward profile is attractive to investment heavyweights like Paul Tudor Jones, Stanley Druckenmiller, and corporations like Microstrategy, Square, and MassMutual purchasing and transforming their cash reserves into Bitcoin.
“The Company continues to operate in accordance with its Treasury Reserve Policy and currently holds approximately 70,470 bitcoins,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “The acquisition of additional bitcoins announced today reaffirms our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value. We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the Company, have been significant factors in the recent appreciation in our stock price.”
