Is institutional money finally coming?
For years, Bitcoin enthusiasts have called for the arrival of “institutional money” on the cryptocurrency scene. It has long been believed that, eventually, traditional financial institutions will turn to Bitcoin to operate mutual funds, pensions and insurance pools. These institutional investors tend to bring hundreds of millions and even billions to the table and may be ready to enter the crypto market to hedge against US dollar inflation.
In a recent interview, billion-dollar company MicroStrategy said it had $ 500 million in reserve. But President and CEO Michael Saylor said he didn’t think it was too smart to have that much money in the long run.
“It makes sense to transfer our treasury assets to some investments that cannot be inflated,” said the CEO.
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Gold, silver and bitcoin are showing strength
Specifically, the company plans to place half of its $ 500 million cash reserve in alternative value reserves.
MicroStrategy President and CFO, Phong Le, described the plan.
“We will invest up to $ 250 million over the next 12 months in one or more investments or alternative assets, which may include stocks, bonds, commodities like gold, digital assets like Bitcoin or other types of assets”
CEO Michael Saylor went so far as to say that MicroStrategy believes the US dollar may start to lose value.
“Over time, the yield on our dollar values decreased and, at times, we had the expectation of obtaining higher real yields and therefore there was no real urgency to resolve this problem. But, currently, we expect negative real returns or negative real yield in US dollars, and that is an expectation that has changed substantially over the past three months. ”
And MicroStrategy is making it clear what they think the new safe haven is.
“If you have big dollar values and you expect some kind of return on them, that is gone. Gold, silver and bitcoin are showing strength. “
Alternatives, such as precious metals and cryptocurrencies, are believed to be hedging against this possible loss of value that the US dollar could suffer. Satoshi Nakamoto’s original goal was to create an anti-inflationary asset that could not be changed by banks or governments. Now, as Americans await a new round of stimulus packages, it appears that some of these institutions are starting to realize Bitcoin.
And the crypto community expects a boom when these types of organizations start to arrive en masse.