MicroStrategy has now announced a $600 million bond issue to buy bitcoin. This should be the fourth time that this company has purchased a large amount of Bitcoin. The first two times were to buy bitcoin with the company's own funds. The most recent was a $650 million bond issue to buy Bitcoin. Now it has issued another $600 million in bonds to buy bitcoin. MicroStrategy thus became the most aggressive buyer of Bitcoin among US listed companies. I think the company's renewed debt to buy Bitcoin is the result of some recent factors encouraging it, and it is also the result of MicroStrategy CEO Michael Saylor's judgment on the development trend of the US dollar.
In terms of near-term factors, Tesla's $1.5 billion purchase of Bitcoin is clearly a very big incentive for MicroStrategy. Musk made this decision in connection with his communication with Michael Saylor. Apparently Michael Saylor didn't go to great lengths to convince Musk to make this decision. I believe Musk is very independent in his own judgment of the value of Bitcoin. He only strengthened his confidence in buying Bitcoin after further communication with Michael Saylor. Therefore, Musk made the decision to use $1.5 billion to buy Bitcoin in a very short period of time. I believe that Musk's large purchase has in turn further strengthened Michael Saylor's own judgment.
Another factor that influenced Michael Saylor's decision, I think, is his recent successful two-day online conference on introducing Bitcoin and how to buy it to US listed companies. The conference attracted 8,197 participants from 6,917 companies. I think the positive feedback from the audience on this session has further strengthened Michael Saylor's confidence in this regard. I think we will see more US public companies announcing their purchases of Bitcoin in the near term.
In terms of long-term factors, the reasons for investors to buy Bitcoin remain. The main reason for this is the substantial increase in the issuance of US dollars. In fact, starting from March 2020, the Federal Reserve’s measures to issue a large number of additional U.S. dollars to relieve the epidemic made the market see the inevitable depreciation of the U.S. dollar. Therefore, institutions are considering various measures to ensure the value of their assets. Among the various alternative investment varieties, due to its basic characteristics and its current status, some institutions have begun to invest in it as a value storage tool. Bitcoin has long been compared to digital gold by Bitcoin believers. Now such a concept is accepted by more and more users in the market. Bitcoin is actually a better fit than gold as a store of value. Therefore, more and more retail users and institutional users began to buy and hold Bitcoin. During 2020, the number of institutions holding Bitcoin in the US market has increased significantly. Prior to 2020, the number of U.S.-listed companies investing in Bitcoin was in the single digits. In 2020, this number will rise to 19. MicroStrategy is the most active buyer of Bitcoin among U.S.-listed companies. Although it started relatively late, it invested a lot of money when it first bought. Michael Saylor was thus jokingly called Rookie of the Year by Galaxy Digital CEO Michael Novogratz.
Since MicroStrategy announced the news of buying a large number of bitcoins, Michael Saylor immediately became the focus of industry and media attention. As a result, he participated in a large number of online interviews and various communications with organizations in the same industry. It was the enthusiasm in the market that drove him to dedicate a two-day Bitcoin conference aimed at institutional clients. I believe these communications and discussions in the same industry have strengthened his confidence in Bitcoin. In addition, in the U.S. market, the enthusiasm of institutional users for Bitcoin is already evident. The market’s expectations for the listing of Coinbase and the continuous increase in the valuation of Coinbase’s listing, the transaction premium of the Grayscale Bitcoin Trust Fund, the continuous applications for the establishment of Bitcoin ETFs in the market, and the growth of the stock prices of listed companies that provide Bitcoin-related services and other factors All show the market's recognition of the value of Bitcoin. I believe all of these factors strengthened MicroStrategy's confidence in its investment strategy, which is why it doubled down on Bitcoin.
(MicroStrategy has the potential to raise nearly $1 billion from the market, according to the latest reports)
