News regarding Bitcoin and cryptocurrencies is in constant turmoil. It can happen that important information gets lost in the daily news flow and you miss important points.
This format is there to remedy that. We come back to the news of the past week in the Crypto Weekly to keep you informed on the current situation of cryptocurrencies.
This week, we will take a look at Thibaud Marechal’s article , in which he explores the issue of Crypto Genius status : can it be considered a future benchmark reserve asset ? Between stimulus policies and bitcoinization of company reserves, nothing is left behind!
The MicroStrategy case
August 11, 2020 is an important date for Bitcoin. The king of cryptos has been recognized as a corporate treasury asset by Wall Street. MicroStrategy, a publisher of computer intelligence software, with a market valuation of $ 1.2 billion , announced the conversion of $ 250 million of cash into bitcoin , or 21,454 tokens .
Recently, MicroStrategy also acquired an additional 16,796 BTC for $ 175 million . According to its CEO, Michael Saylor, these 2 purchases represent a total amount of 425 million dollars for 38,250 BTC . It is the first publicly traded company to announce bitcoin holdings on such a scale . In this article, we will attempt to analyze what this means for corporate treasury, for valuations of public companies, and for indirect institutional stake in Bitcoin.
A favorable context
Now that Bitcoin has been adopted as a primary reserve asset by MicroStrategy, which is listed on NASDAQ, other companies will be forced to take an interest . In the months following MicroStrategy’s announcement, a few firms have already taken the plunge , including Square , also listed on the stock exchange, whose valuation is over $ 75 billion. This one which acquired 50 million dollars of bitcoins . A more or less comprehensive list of 15 companies that have added Bitcoin to their treasury today has over 785,999 BTC , which is about 3.74% of the total supply. of 21 million bitcoins, at the time of writing this article.
Following the economic slowdown driven by globalized lockdowns and supply chain disruptions in the first half of 2020, companies have slowed their investment programs , reduced costs and increased their cash reserves to adapt to economic uncertainty . The companies making up the Nasdaq 100 – the index of the 100 largest non-financial companies listed on the stock market – now have nearly $ 1 trillion in cash, or $ 1,000 billion. American tech moguls like Microsoft, Google, and Apple are racking up more money than ever. Despite $ 121 billion in cash, Alphabet, Google’s parent company, raised $ 10 billion by issuing bonds with the lowest interest rate in history for a company. Collectively, since 2012, the Nasdaq 100 has grown from $ 405 billion to just under $ 1 trillion in cash reserves.