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Bitcoin is Superior to Cash, says MicroStrategy Chief Executive Following $250 Million Investment

MicroStrategy Chief Executive Michael Saylor said Bitcoin is “superior to cash” after the Nasdaq-listed data analytics firm sent shockwaves through the cryptocurrency world with a $250 million inflation hedge investment into Bitcoin.

2020 may be remembered as the year Bitcoin entered a stage of market maturity, after years of being regarded as a pump and dump scheme by mainstream investors. Almost daily come new reports of serious investment both on Wall Street and as the preferred safe haven asset of the next generation over traditional gold.

The biggest news of the year by far for Bitcoin and alternative assets came when publicly-traded billion-dollar software firm MicroStrategy announced its new capital allocation investment strategy—with a purchase of 21,454 Bitcoins. MicroStrategy is the largest independent publicly traded business intelligence firm used by many of the Fortune Global 500 brands.

Since MicroStrategy made the $250 million Bitcoin purchase as an inflation hedge, the value of the business intelligence firm itself has risen by 10% adding $100 million to its own market value.

Bitcoin is Superior to Cash

In an official statement, MicroStrategy Chief Executive Michael Saylor said that Bitcoin is superior to cash as it “is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Saylor cited various macro factors such as the global quantitative easing measures, political and economic uncertainty and the COVID-19 pandemic disruption, as well as Bitcoin’s own technical and qualitative properties as being what makes the digital asset “superior to cash.”

Coming into the Bitcoin purchase with a market capitalization of $1.3 billion dollars, MicroStrategy has seen its stock price increase by over 10% adding $100 million.

Despite the purchase of over 21,000 BTC, the Bitcoin price has not moved much and is still toying with the $12,000 resistance. However, it would be difficult to see the investment as anything other than a bullish signal for the Bitcoin price.

Speaking to Forbes, Nick Neuman the Chief Executive of Casa, a Bitcoin security service provider said that MicroStrategy’s investment in Bitcoin may lead the way for other reputable firms.

Neuman said, “MicroStrategy talked about finding a long-term store of value, but companies that adopt Bitcoin will discover other major benefits […] it can simplify their treasury operations, giving them more control—and more speed—when moving large amounts of money compared to our outdated, legacy, payment rails.”

BlackRock Gets Exposure to Bitcoin Through MicroStrategy, Both Firms U-Turn on Shaming Crypto

Investment giant BlackRock, the biggest stakeholder of MicroStrategy — has now indirect exposure to Bitcoin as the world’s largest intelligence company has recently purchased 21,454 Bitcoins.

Although Bitcoin’s price did not seem affected by the recent news of MicroStrategy’s new capital allocation of investing $250 million in Bitcoin (BTC), the majority of crypto analysts and Bitcoin bulls have beliefs that Bitcoin is currently in its early stages of a coming bull market.

MicroStrategy CEO Michael J. Saylor believes that Bitcoin is digital gold, and it is “harder, stronger, faster, and smarter than any money that has preceded it.” However, 7 years ago, he made a drastically different comment on Bitcoin. He tweeted:

“#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”

Today, Saylor finds Bitcoin to be persuasive and the cryptocurrency shows “evidence of its superiority as an asset class for those seeking a long-term store of value.”

MicroStrategy’s bet on Bitcoin has acted as a sign of massive institutional adoption in cryptocurrencies yet to come. In addition to the billion-dollar company’s purchase in Bitcoin; according to data from CNN Business, BlackRock Fund Advisors currently has a 15.24% stake in MicroStrategy, followed by the Vanguard Group, which holds an 11.72% stake.

Just over a year ago, Blackrock’s asset managers said cryptocurrencies are not for everyone, and they’re only suitable for those who can “stomach potential complete losses.” Richard Turnill, BlackRock’s global chief investment strategist said:

“We see cryptocurrencies potentially becoming more widely used in the future as the markets mature. Yet for now, we believe they should only be considered by those who can stomach potentially complete losses.”

Turnill stated that the extreme price volatility seen among cryptocurrencies was the reason for his warning and that the extreme price volatility observed in the US stock markets during financial crises looked “placid” compared to crypto’s volatility.

The institutional barrier to adopting crypto

Blockchain.News previously spoke to Christine Sandler, the Head of Sales and Marketing at Fidelity Digital Assets, who believes that the crypto industry needed to appeal to more traditional institutions and to begin the mitigate the frictions that were present.

During late 2019 to early 2020, Fidelity Digital Assets surveyed 774 institutional investors across the United States and Europe and found that 80 percent of the participants found something of value in digital assets. 60 percent of the participants said that they would incorporate digital assets into their investment portfolios. 90 percent of the survey respondents were traditional institutional investors.

The infrastructure remains nascent in digital assets, where market centers, including exchanges and liquidity providers, are not very centralized. The lack of construct and market data may lead to concern regarding market manipulation.

Bitcoin Whales and Large-Scale Institutions “All-In” on Bitcoin During COVID-19, Retail Investors Are More Cautious

Coronavirus has led to many investors turning towards Bitcoin as a hedge, but research from OKEx revealed that the way in which individual and institutional investors leveraged the digital asset differed.

Big-Time Players Capitalize on BTC

With coronavirus impacting economies worldwide and the US dollar plummeting, data by Malta-based crypto exchange OKEx suggested that many investors have been turning towards Bitcoin to secure their financial assets. Even institutional investors have converted to Bitcoin as a hedge option, starting with seasoned billionaire investor Paul Tudor Jones.

The renowned hedge fund manager bought Bitcoin (BTC) back in May, as central banks across the globe were mass printing fiat money to deliver stimulus packages for the massive coronavirus blow impacting global economies. According to a Bloomberg report, Jones compared Bitcoin to gold, saying it reminded him of the major role played by the traditionally viewed safe-haven asset back in the 1970s. He said:

“The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.”

The news was followed by Microstrategy’s announcement that the billion-dollar business intelligence and software company had acquired 21,454 Bitcoins, which was the equivalent of over $250 million at the time. The report from OKEx read:

“With stories like these hitting the headlines, it is easy to agree with the general narrative that BTC is increasingly becoming more attractive to institutional investors and big players.”

Individual investors like BTC, but more cautious

OKEx’s survey, which looked at data from the beginning of the COVID-19 pandemic – January – till August 2020, also suggested that the largest amounts of BTC transactions were small-scaled, figuring between 0 to 1 BTC. They were often the preferred transaction amount of “retail” investors, which were small-time players with nowhere close to the capital possessed by institutions.

These investors took a “wait-and-see” approach, especially after Bitcoin price hit $10,000 in May. They were more cautious with BTC, especially as cryptocurrency could at times demonstrate high volatility and dramatic price changes. The report read:

“Retail investors buy and sell relatively small amounts of BTC as the cryptocurrency’s price fluctuates and they may be more easily ‘shaken out’ of the market in times of high volatility and dramatic price declines.”

Bitcoin transactions of over 1,000 BTC surging

Bitcoin transactions gained traction again in late June, and the trend has been going up ever since. Transactions of over 1,000 BTC have become increasingly popular after Bitcoin hit the $10,000 price mark.

While small-scale investments are the most common Bitcoin market transactions, OKEx in collaboration with Catallact demonstrated this in their report:

“The number of transactions decreases as the amount of BTC being transacted increases.”

Why have institutions adopted BTC during COVID-19?

Bigger BTC investments, namely anywhere between 5,000 and 10,000 BTC, appear to majorly originate from institutional investors. An uptrend of these large-scale transactions has been observed since June, and “throughout the summer of Bitcoin’s price consolidation.” Referring to this “interesting anomaly,” OKEx proposed two explanations.

The first explanation was that crypto exchanges have been shifting digital coins in various wallets for reasons, such as cybersecurity. Another explanation would be that large-scale institutional investors entering the crypto market have decided to accumulate Bitcoin in bulk, in anticipation of market prices increasing or decreasing. In addition, due to COVID-19’s impact globally, many investors have turned to Bitcoin as a hedge against economic inflation.

This in turn has led to many speculating about whether Bitcoin will potentially replace gold as a traditional safe-haven asset.

Winklevoss Backs Bitcoin

Bitcoin bulls such as Gemini co-founders Tyler and Cameron Winklevoss seem to think so. Responding to a poll originating from a former regulatory counsel executive for Coinbase, which asked when investors “realized the full potential of bitcoin and how it can change everything,” Tyler Winklevoss commented:

“When I realized that it was the first money in the world that was built purposely for the internet and therefore works just like your email.”

The Bitcoin billionaire had recently made a case about Bitcoin heading towards a markup of $500,000.

At the time of writing, Bitcoin is trading at around $10,370. The “digital gold” asset had experienced a price crash at the beginning of the month, dropping below the $11K mark and breaking two support levels.

SEC Report Reveals MicroStrategy “May Increase” its Bitcoin Holdings Beyond Initial Purchase of $250 Million

The world’s largest intelligence company, Microstrategy has revealed in its United States Securities and Exchange Commission (SEC) report that it “may increase” its Bitcoin (BTC) holdings. Microstrategy purchased $250 million worth of Bitcoin in August.

The publicly-traded billion-dollar software firm announced that it has purchased 21,454 Bitcoins as part of its new capital allocation investment strategy. Microstrategy’s CEO, Michael J. Saylor explained the firm’s final decision to invest in Bitcoin was due to the macro factors affecting the current economic and business landscape. With the pandemic and global political issues posing risks to the depreciation of fiat money, Microstrategy believes that holding Bitcoin is the way to go.

According to an SEC disclose report, Microstrategy’s board of directors decided to make Bitcoin the company’s primary reserve asset. Microstrategy may purchase more Bitcoins beyond its original purchase of 21,454 BTC, $250 million including fees. The report read:

“Bitcoin held by the Company, with bitcoin serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets, including future potential share repurchase activity. As a result of this new Policy, the Company’s holdings of bitcoin may increase beyond the $250 million investment that the Company disclosed on August 11, 2020.”

Microstrategy’s CEO previously stated in the announcement of its original purchase of the world’s largest cryptocurrency that Bitcoin is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. He added:

“Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”

Bitcoin’s price has plunged in the past few weeks, even breaking the $10,000 support level, however, it has made a slight recovery since. Bitcoin’s price is trading at $10,730 at press time, according to Binance. BTC’s price has been trading up around 4 percent in the last 24 hours and could continue to see gains if more institutions including MicroStrategy announce bullish news.

MicroStrategy formally recognized Bitcoin as the firm’s primary treasury reserve asset on an ongoing basis, on Sept. 11.

NASDAQ Listed MicroStrategy Buys Up Additional $175 Million in Bitcoin

Bitcoin centric NASDAQ listed MicroStrategy has shored up its Bitcoin (BTC) portfolio by investing an additional $175 Million in the safe haven digital asset.

MicroStrategy’s latest investment came after reports emerged that the company is likely to increase its Bitcoin stake from the initial investment of US$250 million it made back in August.

The company’s Chief Executive Officer Michael J. Saylor confirmed this latest investment. He stated in a tweet:

“On September 14, 2020, MicroStrategy completed its acquisition of 16,796 additional bitcoins at an aggregate purchase price of $175 million. To date, we have purchased a total of 38,250 bitcoins at an aggregate purchase price of $425 million, inclusive of fees and expenses.”

The move by MicroStrategy to diversify the company’s excess cash liquidity into bitcoin (BTC) as a hedge fund was undeterred by the recent price dip in the premier digital asset. While the price of bitcoin (BTC) has dipped below the $10,000 support level, it is currently experiencing a rebound.

Favoring BTC as a Store of Wealth

As the coronavirus looms, investors around the world were plunged into the dilemma of picking hedge funds in the wake of devaluing fiat currencies. As a boycott to Gold, the choice of cryptocurrencies particularly bitcoin (BTC) as the desired hedge against inflation has been widely reported.

In making a more convincing case for bitcoin (BTC), added saying that “Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”

MicroStrategy’s move to hedge its cash reserves using bitcoin (BTC) has stirred a complimentary move among Wall Street investors including billionaire Paul Tudor Jones. The foremost investor believes that the continuous printing of more money to cushion the coronavirus effects will spike inflation, making fiat currencies unattractive in comparison with digital assets like Bitcoin.

Kiss' Gene Simmons and Winklevoss Discuss Bitcoin and Crypto for the Unbanked

Kiss frontman Gene Simmons figures among the mainstream celebrities that back cryptocurrency’s largest asset, Bitcoin (BTC), leveraging the digital currency to diversify his investment portfolio.

Making Ether and Bitcoin accessible

Responding to a Twitter thread from Gemini co-founder Tyler Winklevoss, the Kiss rock band vocalist responded with a message that many in the crypto community viewed as cryptic.

Bitcoin billionaire Cameron Winklevoss had continued educating his followers and the crypto world regarding Bitcoin as a safe-haven asset. In a discussion addressing “systematic disenfranchisement”, racial biases, crypto assets, and more, the Gemini co-founder said:

“It’s easier to buy #Bitcoin and Ether if you are already in the old system. If you don’t have a bank account, it’s hard to get funds into crypto. We need to change this.”

To which Kiss co-lead singer Gene Simmons responded, “I will. I am.”

Gene Simmons believes in crypto power

The comment has led many Bitcoin enthusiasts dumbfounded, as the rocker did not elaborate more. However, Simmons implied through the comment that he was a crypto advocate and that he backed Winklevoss’ aspirations for Bitcoin and altcoins.

In a previous interview with The Street, the Kiss co-founder had referenced Bitcoin and how he had leveraged it to diversify his investment portfolio. He had previously said:

“I am interested in Bitcoin, but only as a piece of the [investment] puzzle.”

Adding to the comment, the music celebrity had said that he would potentially be interested in “Kiss coins,” if the occasion came up. Simmons seemed receptive and open to opportunities that crypto assets could bring.

Winklevoss – Crypto for income inequality

The advantages that cryptocurrency adoption could bring was further elaborated by Cameron Winklevoss in his thread. He discussed how digital assets, like Bitcoin and Ether (ETH), could vastly change the global scope of income inequality, discrimination, wealth, and more. The Bitcoin billionaire said:

“Mortgage discrimination prevents families from building and maintaining wealth from generation to generation. There is no discrimination in crypto.”

Along with his brother Tyler Winklevoss, the Gemini co-founder has been actively working to educate people about Bitcoin and digital assets, as the brothers have made a huge part of their fortune off investing in BTC. Cameron Winklevoss retweeted his brother, who applauded business intelligence and tech firm Microstrategy on acquiring even more BTC. The institutional firm figures among the wave of new Bitcoin whales who have diverged their assets into Bitcoin as a hedge.

Microstrategy among institutional firms to move on BTC

Microstrategy acquired an additional 16,796 BTC “at an aggregate purchase price of $175 million. Founder of Microstrategy, Michael Saylor announced, “To date, we have purchased a total of 38,250 bitcoins at an aggregate purchase price of $425 million, inclusive of fees and expenses.”

Bitcoin billionaire Tyler Winklevoss applauded the move and responded through Twitter:

“Publicly-traded company Microstrategy is stacking stas! They now sit on 38,250 Bitcoin in their treasury reserves. They understand that bitcoin will outrun the scourge of inflation.”

The Winklevoss twin, along with his brother have made a case and presented an educated report on how Bitcoin would inevitably reach $500k.

Bitcoin is currently trading at $10,695, at the time of writing.

Max Keiser Expects Other Enterprises to Acquire Bitcoin Following MicroStrategy’s Lead

Bitcoin maximalist and prominent RT television anchor Max Keiser believes that big companies and corporations will go all-in and invest big in Bitcoin as they will follow MicroStrategy’s approach.

Max Keiser has praised MicroStrategy for turning bullish on Bitcoin and believes that other major enterprises will follow suit.

Keiser said that shareholders of other big firms and corporations will now follow suit to convert their cash reserves into Bitcoins just like billionaire-dollar public company MicroStrategy and Canadian restaurant chain Tahini’s have already converted their reserves into the world’s leading cryptocurrency.

Big Companies Find Bitcoin

MicroStrategy, the Nasdaq-listed business intelligence company, has become the first publicly-traded company to purchase Bitcoins as part of its capital allocation strategy. On August 11, the company announced that it has bought 21,454 Bitcoins worth over $250 million, an incident that made headlines in the mainstream media and crypto community. The company decided to acquire Bitcoins as a way to avoid inflation. Again, on September 15, the company announced that it purchased another 16,796 Bitcoins, adding to the 21,454 it bought last month. MicroStrategy mentioned that Bitcoin serves as the company’s primary treasury reserve asset, saying it positions Bitcoin purchase as a hedge against inflation.

Max Keiser has recently tweeted that shareholders will now demand that their companies and corporations to begin acquiring Bitcoins with their spare cash.

In fact, Keiser was commenting on a tweet posted by the Tahini’s Canadian restaurant chains that recently has already converted all of its cash reserves into Bitcoin.

On August 19, Tahini’s restaurants announced that it converted their entire fiat cash reserves into Bitcoin. The restaurant’s decision to convert its reserves into the leading cryptocurrency originated from the March’s economic crash due to the COVID-19 crisis. During that time, the Canadian government began providing assistance programs for businesses unable to operate their businesses because of the coronavirus pandemic.

Many businesses were adversely affected, including the worst-hit industries like the food and hospitality industry. Tahini’s was adversely affected, a situation that forced the restaurant to lay off a big number of its employees. Since the laid-off workers were obtaining assistance from the government than what the restaurant could pay, most of these workers did not turn up for work. The stimulus programs made employees have a lot of money on their pockets. The situation made Tahini’s owner and CEO, Omar Hamam, to think that fiat money could become worthless if everyone has cash in abundance.

With the American and Canadian governments printing money to save their economies from the COVID-19 pandemic, Omar Hamam started thinking that significant fiat currency devaluation would soon occur. Hamam, therefore, decided to embrace Bitcoin as a suitable hedge against the devaluation of fiat currencies, which is likely to follow as Fed and other central banks are increasing fiat money supplies at an unprecedented rate.

Today, Tahini’s restaurant has posted a comment on its Twitter page, saying that big companies like Google, Apple, as well as big personalities like Jeff Bezos, Elon Musk, and the pro-bitcoin Twitter CEO Jack Dorsey would follow Tahini’s and MicroStrategy in converting portions of their spare cash into Bitcoin.

Bitcoin as Inflation Hedge

High-profile investors are worried that the Coronavirus stimulus from central banks and governments would eventually drive up prices. In order to hedge against the inflation risks, several billionaire investors are acquiring Bitcoins. For example, billionaire hedge fund investor Paul Tudor Jones recently revealed that Bitcoin is part of his portfolio. Global Macro investor CEO Raoul Pal also said that he has put Bitcoin as a portion of his assets to serve as an inflation hedge. Many other investors have also invested in Bitcoin to cover themselves against inflation.

Bitcoin is now the most preferred asset to own among institutional investors. MicroStrategy has set a good example, and global companies would consequently move to acquire Bitcoin to hedge against inflation.

BlackRock, Vanguard, and Norway Now Indirectly Own $110 Million of Bitcoin, Ahead of Stock Sell-Off

Billion-dollar intelligence firm MicroStrategy recently publicly disclosed that it now owns 38,250 Bitcoins. This huge acquisition of the world’s largest cryptocurrency enabled the Norwegian Government Pension Fund, the Vanguard Group, and BlackRock Fund Advisors to indirectly own more than 10,000 Bitcoin (BTC) altogether.

MicroStrategy’s CEO previously stated in the announcement of its original purchase of the world’s largest cryptocurrency that Bitcoin is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.

The firm initially purchased 21,454 Bitcoins, for $250 million, followed by an additional $174 million in Bitcoin, totaling 38,250 Bitcoins at an aggregate purchase price of $425 million. The move by MicroStrategy to diversify the company’s excess cash liquidity into Bitcoin as a hedge fund was undeterred by the recent price dip in the premier digital asset.

Bitcoin’s price has recently dipped due to the recent stock market sell-off. Bitcoin is trading at $10,472 at press time, and MicroStrategy’s entire purchase of Bitcoin averaged $11,111 per BTC.

Arcane Research’s report recently revealed that the Norwegian Government Pension Fund, Vanguard Group, and BlackRock Fund Advisors currently indirectly own 10,000 Bitcoins. According to the report, BlackRock currently owns 15.24 percent of MicroStrategy’s shares, Vanguard 11.72%, and the Norwegian Government Pension Fund 1.51 percent.

BlackRock owns 15.24 percent of MicroStrategy, which gives the firm an indirect exposure to 5829.3 BTC, Vanguard 4482.90 BTC, and Norway, 577.58 BTC. This results in an aggregate total of over $110 million.

The stock market sell-off continues to worsen

The stock market faced a sharp sell-off on Monday, led by correcting the hopes and expectations that the economy would be recovering. While the US continues to struggle with the coronavirus pandemic, Europe has also started to see a sharp increase in COVID-19 cases, indicating a second wave.

The S&P 500 has been down more than 7 percent from early September. Analysts are now watching the 200-day moving average to see if there could be an indicating of an upcoming declining market. Technical strategist Scott Redler said that the S&P 500 is forming a head and shoulders chart pattern, indicating a negative sign for stocks. He added that there could be a bigger sell-off in store.

Although Bitcoin’s price has moved in tandem with the stock market, the BTC price is still holding well above $10,000, its support level amid the stock market plunge. It seems that MicroStrategy and its shareholders may well benefit from its large acquisition of Bitcoin, as the stock market and the COVID-19 pandemic is far away from recovery.

MicroStrategy CEO Michael Saylor From BTC Skeptic to Bitcoin Maximalism

MicroStrategy CEO Michael Saylor went from cryptocurrency skeptic to Bitcoin bull in just seven years, but his eyes are for Bitcoin and Bitcoin only.

NASDAQ listed business intelligence company, MicroStrategy has made the decision to use Bitcoin as its primary reserve currency, recently adding to it’s $250 million August BTC investment with an additional $175 Million in the safe haven digital asset last week.

MicroStrategy’s CEO Michael Saylor indicated in recent tweets that he sees a clear distinction between Bitcoin and other altcoins and heavily favor BTC, as evident by his company’s hedge strategy.

In a tweet on Sept. 20, Saylor noted the difference between crypto-asset networks (ie.Bitcoin) and crypto-application networks (ie.Ethereum). Saylor wrote:

“When considering network dominance in the crypto industry, I find it clarifying to separate crypto-asset networks like Bitcoin from crypto-application networks like Ethereum & stablecoins. Bitcoin dominance has advanced from a low of 71.05% on December 20, 2017, to 93.57% today.”

Saylor’s data however was a little selective for his twitter following as the data from Bitcoin Dominance only measures proof-of-work cryptocurrencies that are attempting to be money.

By other metrics, CoinMarketCap has the Bitcoin’s dominance at a yearly low of 56.67% on Sept 13, but this data also takes stablecoins like Tether into account.

However, Saylor is intentionally selective when it comes to this data. Bitcoin Dominance’s figures do not include initial coin offerings or stablecoins, but rather “only includes coins using proof-of-work that are attempting to be money.”

Saylor Leans to Bitcoin Maximalism

MicroStrategy’s CEO Saylor appears to have done a complete reversal on his view of Bitcoin since 2013 when he tweeted: “Bitcoin’s days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”

As mentioned, in recent weeks MicroStrategy has taken a huge bullish on Bitcoin, buying 21,454 BTC, worth $250 million at the time of purchase in August and added $175 million worth of capital allocation to the asset last week.

When confronted with this statement by Morgan Creek Digital co-founder Anthony Pompliano during a podcast interview, Saylor admitted he doesn’t remember making the statement on Twitter.

Saylor now argues that Bitcoin is a dominant safe-haven asset and said to Pompliano, “Bitcoin scales just fine as a store of value.”

Bitcoin Price Breaks $11K Again, but Can’t Maintain Bullish Momentum

Over the weekend, Bitcoin surged past the $11,000K mark once again but has fallen back to record an approximate price of $10,900 since then.

The $11K mark seems to be a big resistance level for BTC.

Bitcoin as a hedge

To some market investors, the fact that Bitcoin (BTC) has dipped is a sign and an opportunity to buy the crypto asset at a lower price. Recently, a lot of institutional investors have made the switch to Bitcoin, with NASDAQ listed Microstrategy racking up an additional $175 million in BTC for their treasury reserve. The business intelligence firm has accumulated a total of 21,454 Bitcoins, which translates to over $250 million.

Why is Bitcoin not maintaining its surge past $11K?

More and more investors, institutional and retail alike, have increasingly viewed Bitcoin as a safe-haven digital asset and a hedge against inflation. Bitcoin bull Mike Novogratz, for one, has touted the cryptocurrency asset for a long time. On Twitter, the Galaxy Digital CEO provided some insight as to why Bitcoin was still trading around the $10,000 levels and has not managed to make the jump from its resistance level of $11K. He said:

“If everyone already understood BTC and believed in it, the price would be way higher. Your opportunity to buy at these prices is because we are early in the adoption cycle.”

The statement was tweeted as a response to a crypto investor who was explaining how there were still many misconceptions tied to Bitcoin, and how many people did not understand it when she tried to “talk crypto” to them.

Crypto whales dictate the Bitcoin run

Though Bitcoin has been having a hard time maintaining its surge past the $11K mark, many crypto investors and Bitcoin whales such as Mike Novogratz have still expressed the uttermost faith in the safe-haven digital asset.

The Digital Galaxy CEO previously said during an interview with CNBC that retail traders have been transitioning towards gold and Bitcoin investments from tech stocks; this would explain why investors have seen the traditional safe-haven asset and BTC rallying alongside each other earlier this year.

Along with the ex-hedge fund manager, other big-time investors such as Microstrategy and Paul Tudor Jones had also seized the opportunity to invest in more Bitcoin and asserted that the crypto asset had a lot of potential.

Crypto experts have deducted that with big companies like Microstrategy leading the pack, this will inspire other firms to join the “Bitcoin bandwagon” and invest in the crypto asset to enrich their treasury reserve.

Firms accumulating BTC reserves

However, following the logic that crypto whales have led the Bitcoin trend, BTC’s inability to maintain the surge past $11K can also be attributed to them. Market experts have observed that there have been fewer whales sending their Bitcoin assets to crypto exchanges. At the same time, institutional investors such as Microstrategy have been accumulating more BTC reserves to save for a rainy day.

As Bitcoin whales and institutional investors are also the ones that buy the most BTC, their activity largely impacts and drives up Bitcoin’s price.

Bakkt Bitcoin futures contracts record all-time high

Recently, custody firm Bakkt has also reported a new record high of Bitcoin futures contracts, breaking its previous record by 36 percent. The Intercontinental Exchange (ICE) backed trading company recorded more than $200 million worth of Bitcoin contracts trades within a single day.