Microstrategy was the first, Tesla was the most newsworthy. We’re talking about investing into Bitcoin, and why BTC has such appeal for these large corporations!
Chapters:
00:00 - Intro
00:17 - Bitcoin on the Balance Sheet
00:41 - Making the move into Bitcoin
02:21 - Profits from Bitcoin sales
03:30 - Global scepticism among CFOs
#Bitcoin #corporations #Bitpanda
▬ Bitcoin on the balance sheet ▬▬▬▬▬▬▬▬▬▬▬▬
We all remember when Tesla announced that it would invest 1.5 billion U.S. dollars in Bitcoin in 2021. It wasn’t the first, and certainly won’t be the last to make a significant Bitcoin investment. But why are listed companies investing in crypto in the first place?
Let’s take a step back and look at the first publicly listed company to venture into the world of Bitcoin investing.
▬ Making the move into Bitcoin ▬▬▬▬▬▬▬▬▬▬▬▬
The first listed U.S. company to move into the cryptocurrency market with a large investment was Microstrategy. In August 2020, the software company put 250 million U.S. dollars of its financial reserves into Bitcoin - that’s a ¼ of a billion USD! Since then it has been accumulating more and more. After the significant price drop in mid 2021, Michael Saylor the group CEO of Microstrategy announced that - you guessed it, bought even more. As of the filming of this video, the Microstrategy group now holds an impressive 92,000 bitcoins. At the time of this announcement, the total value of the company’s BTC holdings was equivalent to 2.25 billion U.S. dollars.
Michael Saylor has now earned the title of one of the most prolific crypto-advocates in the space. Not only that, Saylor also invests his time in advising likeminded people to enter the crypto world with his "Bitcoin for Corporations" initiative. Times Magazine even did a feature interview with Michael Saylor where he suggested that his tweets to Elon Musk were partly responsible for Tesla's Bitcoin investment. Which, is a pretty big statement, and a pretty big investment!
At this point you’re probably wondering, ‘why should big companies invest their reserves in crypto?’ Well, for Microstrategy, the billion-dollar investment is a hedge against inflation, CEO Michael Saylor has even gone as far as to say in this quote "Cash is trash" and "Bitcoin is digital gold". His mission, he says, is to "fix the balance sheets of the world."
▬ Profits from Bitcoin sales ▬▬▬▬▬▬▬▬▬▬▬▬
So now, let’s turn our attention to Tesla, that mission is likely to be accomplished soon. In its report for the first quarter of 2021, the company announced that 101 million U.S. dollars of its profits were earned through the sale of Bitcoin. And even though Tesla announced a few weeks later that it would not accept Bitcoin as a means of payment for the time being, the company is holding on to its Bitcoin share.
Jack Dorsey the lead behind Twitter and Square, has been somewhat more cautious in his approach of Bitcoin investments with Square. The payment service provider started investing in Bitcoin last autumn and the value of the company's reserves currently stands at 220 million U.S. dollars, which, according to Square, equates to an impressive 5% of the company's liquid assets. In the first quarter of 2021, Square reported a loss in value of 20 million U.S. dollars. For the time being, the payment provider does not want to make any further Bitcoin investments. Instead, Square is dedicating itself to the environmental problem of the cryptocurrency with its "Bitcoin Clean Energy" initiative.
▬ About Bitpanda ▬▬▬▬▬▬▬▬▬▬▬▬
Bitpanda is a fintech based in Vienna, Austria and was founded in 2014 by Eric Demuth, Paul Klanschek and Christian Trummer. Bitpanda has 2.5 million users and more than 450 team members. With a PSD2 payment service provider licence, state-of-the-art security and streamlined user experience, Bitpanda has grown into a popular trading platform for newbies and experts alike. The goal is to tear down the barriers to investing and personal finance through digital assets and blockchain technology like cryptocurrencies, precious metals, fractional stocks and ETFs and to bring traditional financial products into the 21st century.
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