Michael Saylor says he sees an “avalanche” of companies moving their cash into Bitcoin over the next 12 months.
The chief executive officer of MicroStrategy Inc. and Bitcoin proselytizer made the projection at his company’s World Now global conference that featured breakout sessions on the future of Bitcoin and how corporations can best position themselves to capitalize on the digital token. According to Saylor, 1,400 firms signed up for the session on Bitcoin legal considerations.
Saylor is among the crypto proponents who have seized on a narrative — that Federal Reserve policies are equal to money printing — to promote the notion that Bitcoin is a store of wealth even though inflation remains mostly muted. In August, he had announced that MicroStrategy had begun buying Bitcoin.
“If your company has money on its balance sheets and it’s sitting in fiat currencies like euros and dollars, they are losing about 15% of their purchasing power each year,” he said at the virtual summit that attracted industry participants from at least 16 countries, including Isreal, Switzerland, Brazil, Iceland, Ireland, Italy and Portugal.
“The simple solution is to convert some of that cash into Bitcoin,” Saylor said during the two-day webcast Wednesday.
With rock-bottom interest rates and investors on a desperate hunt for meaningful yield, the notion that cryptocurrencies can be an alternative store of value has grown louder. Bitcoin surged 300% last year, and reached a record high of nearly $42,000 in January.
Ross Stevens, chief executive officer of Stone Ridge Asset Management and executive chairman of NYDIG, a Bitcoin financial services firm provider, who spoke during the Bitcoin Macro Strategy breakout session, warned executives not to miss out on the opportunity.
“Every CEO’s most important job: capital allocation, the decision of whether and how to adopt the Bitcoin standard,” Stevens said. “That will be the single most important decision every CEO makes in the next 10 years. Cash is now a liability.”
However, Bitcoin — the world’s largest digital asset — is still prone to volatile price moves, as seen this month, undermining the case for moving a company’s rainy day fund into an asset that has been known to witness single-session swings of more than 10% this year.
NYDIG’s institutional clients have grown to 280 from 25 about a year ago, Stevens said, adding that another 96 are in the process of joining. The firm has over $6 billion in Bitcoin between what’s in the door and what’s committed from institutions, he said. “We are ‘Vanguardizing’ this asset class.”
Stevens is confident that by the end of the year the firm will have exposure to over $25 billion of Bitcoin. “All kinds of institutions are adopting Bitcoin,” he said, including public companies, private companies, hedge funds, private equity funds, credit funds.
Bitcoin gained as much as 4.4% in New York Wednesday, trading at a high of $37,252. Shares of MicroStrategy jumped 7.8% to $741.