On the forefront of Bitcoin adoption - Microstrategy

In the past few months, one name has been unavoidable across nearly every Bitcoin and crypto news website: Microstrategy.

But why is a traditional Web2 company making waves in the crypto ecosystem? The answer is simple: they are massive Bitcoin HODLers and believers.

So who’s Microstrategy? Who had the idea of amassing big amounts of Bitcoin on the company’s portfolio and why?

Who’s Microstrategy?

Founded in the late 1980s, Microstrategy is a business intelligence company that provides AI-powered tools to help companies gather data for more informed decision-making. Their first big client was McDonald’s in the 90’s, and they continuously iterated on their software, generating significant revenue over the years.

What’s the connection between Microstrategy and Bitcoin?

The company began buying Bitcoin in late 2020, spurred by then-CEO Michael Saylor, who had started researching Bitcoin earlier that year. Saylor saw Bitcoin as a hedge against inflation, a more reliable store of value than the weakening dollar, and a means of self-custody for a substantial portion of the company’s assets. Additionally, holding Bitcoin allowed the company to secure better returns than it would have with cash.

Since their initial purchase, Microstrategy has purchased Bitcoin several dozens of times. Acquisitions ranged from the low millions to over a billion dollars at a time. As of now, the company is sitting on 250+M dollars worth of unrealised gains, at the time of writing.

This strategy seems to have the backing of the company’s shareholders, with the company’s stock surging just over 1000% in the past 5 years. A considerable portion of this growth occurred shortly after their first Bitcoin acquisition. Currently, their stock is trading near an all-time high. To put this into perspective, Microstrategy has outperformed every company in the S&P 500 during the same period.

Why’s this important?

For a long time, crypto has faced significant hurdles in achieving mainstream adoption. The masses never really understood it, and those who did often struggled with its steep learning curve and subpar user experience. While progress has been made in these areas, adoption has still lagged behind expectations. Now, traditional institutions are starting to embrace blockchain technology and discuss crypto more openly. The introduction of crypto ETFs, companies like Microstrategy making large Bitcoin purchases, and influential figures like Michael Saylor advocating for Bitcoin are all providing a huge boost for the space. This momentum is crucial as we push toward what many see as the “next frontier” for crypto: widespread adoption.

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