MicroStrategy CEO Michael Sailor recently predicted an “avalanche of companies” adding bitcoin to their budget. And Tesla’s recent announcement of a $ 1.5 billion BTC purchase only confirmed that idea.
CNBC host and blockchain enthusiast Jim Kramer also joined this view. On the eve, he said that “ignoring cryptocurrency” can be a very irresponsible policy on the part of big business.
Cramer, host of Mad Money and founder of TheStreet, attended CNBC’s Squawk Box. There, he shared his opinion on companies that buy bitcoins as a reserve asset, and do not hold on to regular currency. As there are more and more of them, the topic is relevant and promising.
Why Buy Bitcoin
Leaving large financial reserves in cash is simply an irresponsible policy, in Kramer’s view. Because of it, companies can lose a very large amount of potential profit. Here is a quote from an analyst in which he clarifies this issue. The cue is from Decrypt.
As for ways to “make money”, I am totally for new ways to make money. I find it almost irresponsible not to include Bitcoin in the balance sheet. Every treasurer should go to their boards of directors and say, “Should we invest a small fraction of our money in bitcoins?”
This seems to be a fun way to hedge against the rest of the economic environment. This is a good way to hedge against the risks associated with conventional currencies.
What risks are we talking about? First, too high inflation created against the backdrop of a heavy blow to the global economy. The latter was inflicted last year, when the coronavirus pandemic led to a sharp increase in unemployment and massive closures of businesses of all sizes around the world. Secondly, there is a risk of missing out on the potential profit from the rise in the price of Bitcoin, which has been showing very good results in terms of profitability for several months in a row.
And they are already connecting to the topic – and at various levels. In particular, this week it became known about the desire of the Mayor of Miami to quickly invest in Bitcoin. Judging by the rush, he also understands the benefits of communicating with technology early in its existence.
However, Kramer noted that he does not recommend “companies invest large sums” in Bitcoin, and that cryptocurrency should only be a “piece of the puzzle” in their investment policy. He described himself as a “traditionalist” in terms of hedging options – that is, reducing – risks like buying gold or selling stocks. Still, he advised that Bitcoin be part of a set of assets for companies. Here is a quote from him.
I think Bitcoin is exciting. You can talk about this endlessly. There are his supporters and not so many sellers. We will hear from PayPal at an upcoming analyst meeting how it has become popular. I just think that in the end you will need some kind of risk containment measure in cryptocurrency, because the likelihood of a sharp drop in its value is also quite high.
A couple of days ago, Tesla’s $ 1.5 billion investment in Bitcoin led to a sharp jump in the price of the cryptocurrency, which immediately set a new all-time high. Last year, MicroStrategy was one of the first organizations to make large investments in digital assets. At the moment, it ranks first in terms of the number of bitcoins in management.
By the way, Michael Saylor, CEO of MicroStrategy, launched an educational course on Bitcoin on the eve of his non-profit organization Saylor Academy. The course participants promise to teach “economics, investment policy, philosophy and history of Bitcoin” in twelve hours. Apparently, against the backdrop of the company’s success, the rate will be in demand.
The details of the course presumably overlap with some of Sailor’s statements: in one section, for example, it is argued that Bitcoin will accelerate the transformation of humanity into a Kardashev type 1 civilization.
Recall that the Kardashev system divides hypothetical civilizations into three categories depending on their ability to use the energy of the Universe. And type 1 can use the full energy potential of their own planet.
In other words, Tesla’s investment has kicked off a new wave of adoption for the mainstream cryptocurrency. Now there is intense interest in her in high circles on Wall Street and even in large banking institutions. In addition, the growth in demand is translating into the creation of various educational courses that can spread the correct knowledge about blockchain and cryptocurrencies. We believe that all this will have a positive effect on the development of BTC in the long term and will significantly expand the potential for its application.