Cryptocurrency such as Bitcoin has become increasingly popular in the recent years and has been catching the eyes of corporate giants as well. The example of this is MicroStrategy, a business analytics software company, which is the largest corporate holder of Bitcoin in the world.

At present, the company owns more than 140,000 Bitcoin tokens and is valued at around $4 billion according to the current market price. It has about $2.2 million in debt and has already pledged 15000 of its Bitcoins to pay off its debt.

A recent research study conducted by the financial firm Bernstein stated that MicroStrategy’s Bitcoin holding will not create a concentration risk in the market even if the trading volume reduces in case of a bear market. This is because the company holds only 0.7% of the total Bitcoin tokens in circulation and about 20% of the average daily volume in the spot markets.

However, the sentiment in the market could be adversely affected due to the potential liquidation of MicroStrategy’s tokens during a bear market. This could create an “overhang” that could impact the prices of Bitcoin and other cryptocurrencies in the market negatively.

Considering the fact that the price of Bitcoin and other cryptocurrencies is highly volatile, the performance of these assets and the success of MicroStrategy are closely linked. High prices of Bitcoin will mean a stronger balance sheet and a higher stock price, thus making debt repayment without selling its Bitcoin holdings easier.

It is clear, therefore, that the performance of Bitcoin and other cryptocurrencies is a crucial factor influencing corporate decisions as well. With more corporations turning towards Bitcoin as a treasury asset in the upcoming years, it is indeed a critical aspect worth noting and keeping an eye on in the forthcoming times.



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