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According to MicroStrategy CEO Michael Saylor, holding cash reserves is the wrong strategy for any company due to the continued weakening of the dollar. He claims that some firms such as Warren Buffett’s Berkshire Hathaway have large cash reserves, which result in large annual losses.
According to him, he is willing to help those companies that hold large amounts of cash to stop their real capital losses. In that sense, he explained that an hour of conversation with Buffett would be enough to convince him to inject his reserves into Bitcoin. He adds that Cryptocurrency is an asset with qualities that allow it to preserve capital to a greater extent than gold.
During a mid-month interview, the executive offered some details about Berkshire’s alleged losses. The cash reserves of this institution are $325 billion. These generate a post-tax return of 3%. Meanwhile, the cost of capital they face is 15%, which works out to -12% per year.
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Thus, says Michael Saylor, Berkshire’s cash reserves translate into losses of $32 billion for shareholders annually. For Saylor, this is a huge cost for choosing the wrong booking strategy.
Michael Saylor is willing to help with Bitcoin strategy
During the aforementioned interview, Saylor ratified his permanent offer of availability to help companies preserve their capital. “I would be happy to visit anyone with $100 billion in cash who is sitting back and burning through $10 billion of shareholder value a year. “I will go visit him and give him all the information he needs to convince him that he should switch to the Bitcoin standard,” he said.
MicroStrategy, the firm led by Saylor, is currently the largest corporate holder of Bitcoin with 386,700 coins on its balance sheets. The company has plans to store huge amounts of bitcoins and would even try to reach the figure of 1 million tokens.
Other companies follow in MSTR’s footsteps and also exchange large amounts of raised cash for BTC. These companies include some related to cryptocurrencies, as well as other firms not native to the sector. Among the most particular cases are Marathon, Tesla, Block, Semler Scientific, Metaplanet and others.
This approach to BTC is only in its early stages. In the future, other large companies will enter and not all of them will have the possibility to reach the amount of BTC that MSTR aims for due to the scarcity of Bitcoin issuance. However, this is where the strength of the strategy lies, in a scarce and safe asset, capable of preserving capital for thousands of years.
MicroStrategy plans to inject $42 billion into BTC over the next 3 years.
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