According to an announcement on August 5, a US public company has chosen alternative assets such as Bitcoin and gold to fight the growing threat of excessive inflation.
Allocation to Bitcoin (BTC)
MicroStrategy, a NASDAQ-listed company with more than $ 1.2 billion, told shareholders last week that it plans to invest $ 250 million in “alternative investments or assets” such as bitcoin and gold.
Phong Le, the company’s president and chief financial officer informed shareholders about the strategy during a financial performance review on June 28. Le’s comment came as shareholders demanded information on the value of their investments and protection against economic risk.
Le stressed that since the fourth quarter of 2018, the company has returned more than $ 245 million to shareholders through the repurchase of 1.8 million shares. Moving on, the company’s strategy is to allocate more capital and return some of the excess capital to shareholders while investing in assets with a higher return in cash.
He added that – and here comes the part for cryptocurrency enthusiasts – the capital allocation strategy whereby the company plans to return shareholders up to $ 250 million over the next 12 months will involve digital assets such as Bitcoin.
“In addition, we will seek to invest up to $ 250 million over the next 12 months in one or more alternative investments or assets, which may include stocks, bonds, commodities like gold, digital assets like Bitcoin, or other types of assets.”
Bitcoin and gold are not inflationary
At the same meeting, Microstrategy CEO Michael Saylor emphasized that gold, silver, and Bitcoin were showing strength and stated that “it makes sense to shift our treasury assets to certain investments that are not or are less likely to be inflationary.”
Saylor made comments relating to the distinctive nature of Bitcoin) which prevent a central authority from making inflationary decisions that affect the network and its owners.
“So as we pursue alternative investment strategies for our treasury assets, we expect to have more volatility, at least measured in dollar terms, in the future.”
Both dollar volatility and inflation are becoming risks that are beginning to usurp the current investment strategies of investors.