Document Analysis NLP IA
FREQ, RAKE or TFIDF
Summary (IA Generated)
Holding Bitcoin (BTC) in treasury will soon become a corporate standard.
Wall Street firm MicroStrategy recently made headlines when it decided to allocate a large portion of its treasury to Bitcoin, buying over 21,000 BTC in August and almost 17,000 more in September, making its CEO, Michael Saylor, seem quite prescient already.
MicroStrategy stock rallied just like BTC as well — by 50%.
According to Saylor, Bitcoin was the best inflation hedge and store of value, and in his words, “Cash is trash.
Technically speaking, Bitcoin is, in fact, a worldwide store of value.
There are many technical reasons for calling Bitcoin an inflation hedge.
BTC is a numerus-clausus asset class, meaning that there is a finite number in circulation (a maximum of 21 million coins) much like gold, high-end real estate and fine art.
Furthermore, there is a dwindling new supply of Bitcoin — after the BTC mining halving — and a culture of long-term holding among most crypto participants.
Historically, BTC seems to replay its past bull run waves post-halvings.
Bitcoin, so far, has outperformed every asset class throughout the crisis, spurring new demand and earning its wings as a global store of value.
Related: What the COVID-19 pandemic means for blockchain and crypto.
Demand, then, is materializing on pure monetary considerations, and Bitcoin is, technically speaking, a natural inflation hedge in that regard.
It will soon be a corporate standard like owning treasury notes is.
For savvy chief financial officers, having a portion of the treasury held in digital currency provides a measure of regulatory hedge and arbitrage.
And it is, in fact, why Bitcoin will find favor with many chief financial officers, ironically both conservative and avant-garde ones.
With about a rough estimate of $10 trillion of corporate treasury worldwide, even a 3% allocation instead of cash represents $300 billion, which is about the aggregate value of Bitcoin, in liquid cash.
Soon, every chief financial officer will be calmly asking not if the corporation needs exposure to the digital asset class but how to do it well and who to trust in the management of its digital assets.