Bitcoin Is Set To Absorb A Windfall Of $4 Trillion

After Microstrategy and Tesla, Microsoft may soon take the plunge by adopting Michael Saylor’s Bitcoin strategy.

The Bitcoin Strategy

MicroStrategy became in August 2020 the first multinational to make bitcoin its main cash asset. Its goal was to counter the ongoing devaluation of the dollar, which has effectively lost 20% of its purchasing power in the process.

Proving that this strategy works wonders, Microstrategy’s stock is appreciating faster than that of the giant NVIDIA. The former has gained 430% since January compared to “only” 190% for the latter.

Ladies and gentlefrens, I present you

MicroStrategy pic.twitter.com/grgxA1UqrS

— RunnerXBT (@RunnerXBT) November 19, 2024

Microstrategy feeds off the performance of bitcoin, which has soared 120% in the same period.
This correlation can be explained by the presence of 331,200 bitcoins in its treasury. In plain terms, its stock has become a bitcoin derivative. Obtained at an average price of $49,874 (~$16.5 billion), these BTC are now worth more than $30 billion.

The gap (430% > 120%) is due to the fact that Microstrategy is borrowing to buy bitcoins. In other words, investing in MSTR shares is equivalent to buying BTC with leverage without risking liquidation by volatility.

Other companies such as Block and Tesla are already following in Microstrategy’s footsteps. Semler Scientific, Solidion Technology, Thumzup Media, Genius Group, Cosmos Health, and BlockStream have recently adopted the same strategy as Microstrategy.

These are small-capitalization companies, but a heavyweight should soon join the dance: Microsoft.

Melting Ice Cube

Microsoft is not completely foreign to bitcoin. The tech giant has been accepting it as payment since 2014 on Windows and Xbox Stores.

The Mountain View firm hasn’t made it a cash asset, but MicroStrategy’s outrageous success could change the game. The bitcoin strategy will be on the agenda of the shareholders’ meeting in December.

Here is an excerpt from the document published by Microsoft in preparation for the shareholders’ vote:

Microstrategy – which, like Microsoft, is a technology company, but which, unlike Microsoft, holds bitcoins on its balance sheet – has seen its stock performance exceed that of Microsoft by 313% this year. And this despite the fact that it only represents a fraction of Microsoft’s activity. And they are not alone. The adoption of bitcoin by institutions and companies is becoming increasingly common. BlackRock, Microsoft’s second largest shareholder, offers its clients a Bitcoin ETF.

Shareholders have until December 10 to make their voices heard. Let’s bet that Michael Saylor‘s speech at the AGM will tip the scales.

A positive vote could trigger an avalanche, knowing that ten companies, including Apple, Google, and Microsoft, hold more than one-third of the $2.5 trillion held by the entire S&P 500 (U.S. stock market).

Microsoft holds $78 billion in cash, Apple $156 billion, Google $93 billion, Amazon $88 billion, etc. All this money is quickly eroded by inflation.

US companies have a cash pile of $4 000 billions. This will flow into Bitcoin. pic.twitter.com/NiBjY64eic

— Nicolas Teterel (@NTeterel) November 20, 2024

Bitcoin for Everyone

Governments are not to be outdone. Small countries like El Salvador and Bhutan have been accumulating bitcoins for several years. Not to mention those who prefer to remain discreet, especially in the Middle East, according to Mike Novogratz.

Countries are already buying bitcoins. I have a good friend in the Middle East who has never told me that he has never seen this. […] Leaders around the world heard Donald Trump say in Nashville that he would be a “Bitcoin President.

CEO of Galaxy Digital on Bloomberg

How could the rest of the world remain idle if the U.S. government creates a strategic reserve of bitcoins? Even the Governor of the Bank of France has come to terms with the fact, that’s saying something…

If Senator Cynthia Lummis achieves her goals, the United States will acquire one million bitcoins. In this scenario, the whole world will follow, including Europe. The Polish presidential candidate Sławomir Mentzen has well understood this:

Poland should create a strategic reserve of bitcoins. If I become President of Poland, our country will implement very favorable regulations and low taxes. Banks and regulators will need to provide their support. The bill is ready. Let’s stop waiting. Instead of adopting absurd bills on crypto-assets, let’s create a strategic reserve before it’s too late.

There is a very good chance that Donald Trump will take the Bitcoin plunge. With the recent appointment of Howard Lutnick as Secretary of Commerce, the Trump administration now counts nine bitcoin owners…