Bitcoin Treasuries Shield Corporates from Inflation, Outperforming Traditional Strategies: Report

September 6, 2024
Bitcoin Treasuries Shield Corporates from Inflation, Outperforming Traditional Strategies: Report
  • A recent report suggests that companies could have shielded themselves from inflation since 2020 by maintaining a cash treasury supplemented with a 3% allocation to Bitcoin.

  • Traditional corporate treasury strategies typically depend on cash and short-term equivalents, which have failed to keep pace with inflation, leading to a decline in the value of reserves.

  • For instance, Apple has reportedly lost $15 billion in treasury holdings over the past decade due to these inflationary pressures.

  • This context highlights a growing trend toward Bitcoin adoption in corporate treasury strategies, notably championed by MicroStrategy's founder, Michael Saylor.

  • MicroStrategy recently completed an $800 million debt sale to acquire an additional 11,931 BTC, increasing its total holdings to 226,500 BTC valued at approximately $14.7 billion.

  • Since implementing its Bitcoin treasury strategy, MicroStrategy's stock has skyrocketed over 1,000%, significantly outperforming Berkshire Hathaway, which only saw a 104.75% increase during the same timeframe.

  • Saylor argues that Bitcoin provides 'economic immortality' for corporations, citing its capped supply and lack of counterparty risk compared to traditional assets.

  • Looking ahead, a report from River predicts that around 10% of US companies will convert about $10.35 billion, or 1.5% of their treasury reserves, into Bitcoin over the next 18 months.

  • In contrast, Warren Buffett has notably excluded Bitcoin from his investment strategy, advising against its use as a hedge against inflation.

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