Bitcoin ( USD) has fallen more than 20% since its record high. It is now set for its fourth consecutive weekly decline. As always, crypto bulls are holding firm to their faith. MicroStrategy CEO Michael Saylor added bitcoin to the company’s balance sheets last year. He has been a vocal advocate for bitcoin since then. He doesn’t see any – at least not right now. – Long-term barriers to price increases.
He stated in an interview that the only real risk to his company was a black Swan – an unknown unknown. He dismissed potential problems like: “Has it ever been hacked?” It hasn’t been hacked. Is it going be banned? It’s not going away. It can be copied. It was copied ten thousand times. Each copy failed.
Saylor stated that bitcoin can rise forever. This sentiment he reiterated to Yahoo Finance Live. He said that technology adoption and inflation are the two main drivers.
“It’s going be driven by technology. As it gets built into Facebook, Google, and Apple, it’s also built into Square, and PayPal. He said that if you add technical utility, it will drive greater adoption.
He acknowledged recent volatility and future potential volatility. “It’s probably not going to go up uniformly in an exponential curve. But I don’t believe we’ll see technology slow down. I don’t think I’m going to see a world in which currencies don’t keep inflation.
Some crypto analysts have recognized risks. In the short-term, selling in a high-leveraged asset such as bitcoin could cascade if it falls below certain thresholds. Indebted holders will be forced to liquidate. There is some debate about whether bitcoin is an inflation hedge. The recent sell-off seems to have been caused by the possibility of higher interest rates, which is a response to rising inflation.
Still, Saylor’s bitcoin positioning has been largely a good thing. MicroStrategy shares rose 380% in the three years since Saylor first announced that in August 2020, the company would be converting cash from its corporate Treasury to bitcoin. The company has steadily built its position over the years, with purchases made using debt. Saylor announced the latest purchase via tweet earlier in this week.
MicroStrategy purchased 1,434 additional bitcoins at a price of $57.477 per #bitcoin. We #hodl had purchased 122,478 Bitcoins for $3.66 Billion at an average price $29.861 per bitcoin as of 12/9/21. $MSTRhttps://t.co/Xke8QhoYpy
– Michael Saylor (@saylor). December 9, 2021
MicroStrategy is still an enterprise software company but it has become what Saylor refers to as a digital property business. Both are complementary, he said.
“As an operating company we can generate cash flow and sweep that cash into bitcoin. He said that cash flows can be funded at a low cost of capital and that is another benefit. “Our employees are happier, customers are happier and our brand has increased one hundredfold since we adopted the Bitcoin strategy.”