Yerevan (CoinChapter.com) — On Monday, Michael Saylor’s firm MicroStrategy bought an additional $15 million worth of Bitcoin. The company had made a similar large purchase not long ago.
MicroStrategy is a business strategy intelligence firm that has taken great interest in Bitcoin. It was the first publicly traded company to invest significant treasury assets in Bitcoin
It first invested in bitcoin with a $250 million purchase in August of 2020.
The news came from the horse’s mouth as Michael Saylor took to Twitter to announce the purchase.
“MicroStrategy has purchased an additional 271 bitcoins for $15.0 million in cash at an average price of ~$55,387 per #bitcoin” he tweeted.
He made a similar tweet in March when the company bought 253 bitcoin at an average price of around $59,339.
In April, the company held 91,579 bitcoins acquired for $2.226 billion at an average price of $24,311 per bitcoin. Today, MicroStrategy has a total of 91,850 bitcoins. Collectively, their value is 2.41 Billion.
The move is said to milden the tremours caused by Elon Musk’s recent announcement. The Tesla CEO had declared he had decided to discontinue accepting Bitcoin as payment for buys bought from his company.
In fact, Michel Saylors was one of the first people to criticise Musk for his brow-raising tweet. Hitting back at the flamboyant Tech Mughal, Saylors had termed his decision as “Ironic”.
As corporations and industry players take interest in the new technology, Bitcoin continues to grow in popularity. Reportedly, Saylor’s company has allocated a large chunk of its balance sheets to Bitcoin.
Federal Bank’s Role in MicroStrategy’s Decision
Other than Bitcoin’s rising popularity and famously lavish returns, other factors also played a role in MicroStrategy’s decision to invest in Bitcoin.
As part of the US Federal Reserve’s policy to help the economy at the brink of crisis, the Federal Reserve lowered the rate that it charges banks for loans from its discount window from 2.25% to 0.25%. Additionally, the Fed also extended the repayment terms to 90 days instead of the regular overnight repayment policy.
Through the Primary Market Corporate Credit Facility (PMCCF) the Federal reserve envisioned lending directly to corporations by buying new bond issuances and providing loans. In March 2020, the Federal Reserve pledged to buy a minimum of $500 billion in Treasury securities. Additionally, it promised to buy $200 billion in government-guaranteed, mortgage-backed securities. The Federal Reserve also announced that it would give large sums in loans to small and medium businesses and Non-Profits as part of its various assistance programs.
These measures came as a warning to financial pundits. They took the move as an indication of future inflations in the market, prompting corporations like Michael Saylor’s MicroStrategy to play safe by allocating large chunks of their balance sheets to Bitcoin.
Although volatile, the crypto industry is evidently regarded as a safer bet when compared to cash holdings.
Yerevan-based Editor and writer focusing on topics about politics and international relations. Having completed his Bachelors and Masters degrees from Delhi's Jawaharlal Nehru University, he currently works as a Projects Coordinator at Indo-Armenian Friendship NGO and the Indian Cultural Centre, Armenia. He regularly writes articles for Armenian media platforms and is the English language Editor of Keghart, a reputed Armenian Diaspora news platform based in Canada. As a young activist, he was awarded "The Best Active Youth International Award" by the Afghanistan Youth Parliament. He is also the Media in charge of the Youth Wing of Bright Armenia Party, the third-largest political party in the Armenian Parliament.
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