MicroStrategy (MSTR) approved on Monday 14 September a new policy to have Bitcoin serve as the primary treasury reserve asset on an ongoing basis.
The company clarified in a filing that the new policy splits the treasury reserve assets into cash and Bitcoin.
Cash assets are cash, cash equivalents, and short-term investments held by the company that exceed working capital needs, it clarified. It added that it will set aside other assets for Bitcoin.
This is subject to market conditions and anticipated needs of the business for cash assets, including future potential share repurchase activity.
Therefore, MicroStrategy expects its Bitcoin holdings to increase, exceeding the amount of $250 million as of 11 August 2020.
According to Seeking Alpha, MicroStrategy shares popped earlier after the announcement of spending half of its $500 million cash hoard to purchase Bitcoin.
Meanwhile, MicroStrategy’s CEO, Michael J. Saylor, said in the press release accompanying the company’s original acquisition of Bitcoin that the cryptocurrency is a dependable store of value, according to Cointelegraph.
“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”MicroStrategy CEO Michael J. Saylor
To clarify, the company’s first announcement of possessing Bitcoin assets caused smaller companies and others to follow MicroStrategy’s steps.
In 2019, the company sold a domain to Block.one for $30 million.
More about MicroStrategy
Michael J. Saylor and Sanju Bansal founded MicroStrategy in 1989. The company operates on transforming data into real-world intelligence and answers their toughest business questions. It provides business intelligence, mobile software, and cloud-based services.
Moreover, the company has a market capitalisation of $1.2 billion. Its shares are also traded on NASDAQ.