The Company that'll soon own 1% of all Bitcoins
If you’ve been on the internet in the past 5 years, you would know cryptocurrencies have been added to the types of assets someone can own. In the vast world of crypto, there is none bigger and more trusted than the Bitcoin network.
It was created and “given” to the world when the world was recovering from the financial crisis in 2008. The Bitcoin network is basically a way to transact, and it is quicker and cheaper than most of the traditional methods. I used the word “given” because an anonymous person or group, going by the name of Satoshi Nakamoto, released the network to the world and they have not sold any of their Bitcoins for years, leading fanatics to believe that whoever Satoshi is, they created this network for the world to use without the thought of personal gain.
The market cap of Bitcoin is just above $512 billion as of this writing, with each coin being worth a little bit more than $26000. There are only going to be 21 million coins in circulation after all the “mining” is completed. The issuing schedule is deflationary and therefore, different from the money issued by governments, in that, as governments keep printing money, the value of each Bitcoin would increase in terms of fiat currencies in the long term.
One company has taken this bet very seriously. Calling it a bet is not right since this is an investment in their future. And the company in question is Microstrategy Inc. It is an American business intelligence and software company, headed by founder Michael Saylor for most of its life. Saylor started his Bitcoin journey as a sceptic, but after studying world economics, history and the Bitcoin network, he has changed into a very vocal supporter of the network.
And he puts his money where his mouth is. He has led the company’s Bitcoin adoption. The company started buying in 2020 and now owns around 130,000 Bitcoins, which cost them around $4 billion. Short-term fluctuations mean they have been in profit and in loss at different times in the past 3 years, but they have not sold. And they will most probably keep buying. Saylor himself also owns around 17,000 Bitcoins.
Let’s say Bitcoin actually gets to the mass adoption stage, at Gold’s current market cap ($13 trillion), each Bitcoin would be worth around $619000, putting the value of the 130,000 Bitcoins with Microstrategy at $80 billion. The company’s current market cap is less than $4 billion. Talk about arbitrage!
Another little company also holds Bitcoin on its balance sheet. You might have heard the name of this one most probably. It’s the largest auto manufacturer in the world, Tesla. They don’t quite have as much invested into Bitcoin, but they do have a considerable amount: they bought $1.5 billion worth of it in 2021. Maybe it’s time we pay some attention to this thing too.
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