Why do Wall Street investors buy bitcoin?

Michael Saylor, 55-year-old experienced executive, CEO of MicroStrategy (stock ticker on NasdaqMSTR) shared his special vision of the fate of Bitcoin.

Sailor went through various corporatetests. MicroStrategy was at the center of a financial reporting scandal in late 2000, and the company was then closely scrutinized by the US Securities and Exchange Commission (SEC). Now there is almost no trace of this scandal, and the organization always formally coordinates its decisions on purchasing bitcoins with the SEC.

In 2004, the company faced the departure of a number oftop managers. At the moment, Saylor is not just the head of MicroStrategy, but also the owner of a controlling stake in the company: he owns 72% of the votes at general meetings of shareholders.

Buying bitcoins

Since August 2020, the basis of the corporatethe company's strategy became Bitcoin (BTC). Sailor admitted that he pondered a lot about the fall of the stock market in March this year, about the impact of COVID-19 on the American economy. Watching how the US Federal Reserve spins an unprecedented volume of emission of US dollars, trying to "flood" the falling economy with money, he came to the conclusion that the days of US dollars are numbered, and since April the world economy is plunging into a global crisis.

Sailor was always a supporter of new technologies.The phenomenon of bitcoin could not pass it.In his opinion, cryptocurrency number 1 is the most important and the only asset in the world that will surely overcomeall the consequences of the global crisis.for bitcoin.

#Gold delivers financial freedom via horse,buggy, & stagecoach. #Bitcoin is a crypto-powered warp drive. When the monetary mass transit system of the modern state breaks down, we might go back to an economy powered by horses, donkeys & mules, but I doubt it.

— Michael Saylor (@michael_saylor) November 24, 2020

As a result, the company began to buy bitcoins, first at a price of 11.2 thousand.$19.4 million ($50 million) then $19.4 million ($50 million).Finally, by borrowing $400 million on Wall Street, MicroStrategy will bring the ownership of bitcoins to at least 62,000.that at a rate of $18,000 would be worth $1.116 billion.In fact, the organization has already invested every dollar of its net cash flow (FCF) in bitcoins.

The volatility of the digital asset does not frighten Sylor: he personally owns, in addition to the funds invested by the company, bitcoins worth more than 100 million dollars, and intends to buy them more and more.Now he has about 18,000 in his personal digital wallet.Btc.

Trendsetter

Seloyr became a trendsetter:Many classic financial market players followed in his footsteps. This has become an additional incentive for those who have been working in the cryptosphere for a long time: they also began to buy more bitcoins, and a number of institutional players are preparing to follow the trend.

When people ask you why crypto is doing so well, just send them this.I mean, have yourself a month!

(From my Monthly Update letter that went out last night. Sign up for it here — https://t.co/AW8jM8MIv8) pic.twitter.com/kk1TUZZLHl

— Travis Kling (@Travis_Kling) December 2, 2020

With Sailor's position that Bitcoin is undeniably bettergold ”, not everyone can agree. In particular, Paul Tudor Jones, Stanley Druckenmiller and Ray Dalio have a different point of view, but thanks also to the example of the head of MicroStrategy, they changed their attitude towards the oldest digital asset from negative to positive.

Couldn't become a pilot

Sailor says his attitude to bitcoin was "the sum of everything he's learned in life, it's not some temporary fascination or some irrational financial speculation."

While studying at the Massachusetts Institute of Technology in 1987, SailorIt's no wonder he's talking about "bitcoin meansfor the future development of finance is exactly the same as aluminium meant to the flight industry."

He was preparing to become a pilot, but the endOf the Cold War between the USSR and the United States marked the fact that the American Air Force went down. As a result, Sailor ended up with large tuition bills and education, which was not fully useful to him. However, he still learned an important lesson that led him to bitcoin: technologies accompany the life of mankind, and you need to see which innovations are the most promising today.

"Easy solution" to buy bitcoin

Heading the company for 30 years, he admits that MicroStrategy has not always been able to produce successful products, but the focus on innovation has always been.And now Sailor is holding something up his sleeve.So, he believes that the bitcoin storage system, even when several employees havethe keys to the corporate digital wallet (multisig) is not the most effective.He does not tell how the bitcoins that MicroStrategy bought are stored, but givesunderstand that the company has its own know-how for this account.

Knowledge about bitcoin came to him for a reason.

After studying bitcoin, it was an "easy decision" for him to start investing hundreds of millions of dollars of MicroStrategy funds and significant personal financial resources in cryptocurrency No.1.He told the conversation that after the first purchase of bitcoins he came to "wealthy investors" who asked how it worksAs a result, Sailor saw that they began to invest even more in bitcoins than he and MicroStrategy, which allowtheir financial capacity.

Sailor believes that there is no need to contrast bitcoin and the classical financial system with its assets, which the digital asset beatsIn terms of profitability.He suggests that not to use the word "cryptocurrencies" but to use the term "crypto assets" more and more.He also hopes that digital assets will be less and less in the context of some illegal transactions, as such transactions spoilbitcoin's image, and institutional players want to invest heavily in thisdigital asset, and at the same time be in tune with regulators in all the countries where they operate.

Bitcoin is not a competitor to AliPay

Sailor says that bitcoin is primarily a technology:

"When the word "cryptocurrency" was attached to bitcoin, there was a feeling that it would beto compete, for example, with Apple Pay, Alipay, but this is the wrong way, because in fact bitcoin can'tcompete with how transactions are conducted through these financial systems."

The head of MicroStrategy also sees no sense in the Lightning Network and other "second layers" to the bitcoin blockchain, which "are trying to compete with Apple Pay and Alipay:

"Now the main source of support for this asset is Square Cash and PayPal, these two companies directly competewith the Lightning Network."

Indeed, these two payment providers not only allowed a number of users to buy-sell cryptocurrency, but are also ready to open, taking into account the conversion of digital assets into ordinary money (fiat), the ability to use them to various merchants.Of course, in countries where regulatory practice allows it.

The time for altcoins has not yet come

The main purpose of Bitcoin Sailorviditv is to be "a simple system that preservesValues this system can solve the problem of general inflation of money."He is also against bitcoins being traded with leverage.In general, Sailorkritically referred to crypto-exchanges, believing that the practice of margin trading with digital assets "discardsaccepting bitcoin as a technology for many years ago."

The head of MicroStrategy is also convinced that

"Owners of 99.9% of the world's money are not interested in altcoins to risk their financial resources - they need a toolsuch as bitcoin to save your money.more common, it may be about the flowering of altcoins and tokens, which will also come en masseinstitutional investors' money, but this is not the current day's situation."

Sailor is sure that any attempt in the world of altcoins to oppose bitcoin is harmful to the entire field of digital assets in general:

"Institutional investors need sustainability and reliability.without failures for three or five years, only then can you start to think that you can trust him."

The head of MicroStrategy believes that it is necessary to gradually integrate bitcoin into the modern financial world, when all the existing rules of the game are observed.He also reminds that in terms of its development, a well-known digital asset workson an update that only has a version of Bitcoin Core 0.2.Seylobonnako is confident that bitcoin will play an important role in the future, which is why he and his company continue toto buy up this digital asset.

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