Business leaders and policymakers that still conflate Bitcoin with drug dealers and cybercriminals are like music executives that once thought streaming was only for pirates, in for a huge shock. In the years since the last great Bitcoin boom-and-bust cycle, the original cryptocurrency has significantly bolstered its financial ecosystem and evolved into a legitimate alternative investment for Wall Street asset managers.
My last article provided the economic rationale behind the increasing interest in Bitcoin by financial professionals and business leaders. The next day, MicroStrategy, which has become the bellwether for adding digital currency to corporate balance sheets, hosted a Bitcoin for Corporations event that will go down as a watershed event in the history of crypto assets and will unleash a flurry of activity by corporate boards and C-level executives discussing the feasibility of holding what some call “Gold 2.0.”
By bringing together Bitcoin investors, tax and legal professionals and the people responsible for developing and implementing its Bitcoin strategy (and sharing the documentation they developed) MicroStrategy eliminated the FUD and normalized the cryptocurrency. The impressive attendance at the event, which CEO Michael Saylor said included 6,000 people live-streaming his keynote and more than 40,000 downloads of day one sessions, illustrates the seriousness with which many organizations take Bitcoin as a financial holding and means of exchange.
Making the case for holding Bitcoin
Saylor began his keynote by describing how the 2020 pandemic unleashed what he terms a “virtual wave,” namely the migration of business processes and activities from the physical to the online worlds. He detailed how the forced adoption of online collaboration forums and videoconferences to replace in-person meetings and business travel evolved from being necessary inconveniences to foundational technologies that allowed MicroStrategy to create asynchronous follow-the-sun workflows that significantly reduced the time needed to resolve problems, make decisions and wasted in project meetings.
Saylor then pivoted to Bitcoin and how the monetary policy response I describe last time was the catalyst that got him searching for inflation resistant assets. As he pointed out in an interview last year, Saylor studied “every asset that you might purchase,” stocks, bonds, various currencies, precious metals, real estate, even art, before evaluating Bitcoin. He was impressed by Bitcoin’s technical resilience, security and maturity, but its selling point is inflation resistance via the hard cap on the number of coins. In sum, Bitcoin is a better gold than gold and the best store of value currently available.
To expound on the rationale for holding Bitcoin, Saylor enlisted Ross Stevens, Founder and CEO of Stone Ridge Capital, whose NYDIG subsidiary is one of the largest providers of Bitcoin services to corporations and investment professionals….