Michael Saylor, MicroStrategy’s CEO, has just revealed the reason why behind the acquisition of Bitcoin by the firm. He stated that they have acquired Bitcoin in order to use it as a hedge against economic uncertainty. He stated that a lot of people also use Gold for the same reason but now most people tend to trust Bitcoin and other virtual currencies instead of precious metals like Gold. He revealed this during an interview with Coindesk on Tuesday, i.e. November 10, 2020. MicroStrategy CEO Claims Value of His Cash Pile Was Decreasing According to MicroStrategy CEO, the cash pile of the companies reserve which was at $500 million was declining constantly. This was during the time when the government was printing more money to increase the supply in the market. Before the COVID-19 pandemic, the money supply was growing at a rate of 5.5% per year. This whole scenario changed during the pandemic as the whole money supply grew by 20%, due to which the value of the dollar decreased significantly. This was the reason why the $500 cash reserve of MicroStrategy also decreased to a great extent. Bitcoin Emerges as Asset That Preserves its Value Over Time MicroStrategy CEO has said that they were looking for an asset that can preserve its value by passing time. This is the reason why they chose to invest in Bitcoin but Gold was also on the list. However, he mentioned that it is not sure whether Gold will be able to preserve its value or not as it is not that scarce anymore. He mentioned: “Gold is the least abundant of the commodities, but you can still produce gold.” If this has to be compared to Bitcoin, then Bitcoin is having a fixed supply, unlike Gold. so, there are chances that Bitcoin will become more scarce than gold, and hence the value will increase significantly.
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