Why MicroStrategy’s announcement of their #Bitcoin holdings & subsequent increase in stock price will lead to #BTC going to $100,000 by end of 1Q2021

A THREAD

After MicroStrategy announced $250M #BTC holdings and got a 15-20% pop in share price, it would be irresponsible of every other CEO/board of publicly traded companies to not have a discussion about holding BTC on their balance sheet.

They have a responsibility to shareholders.

Irregardless of whether the CEOs or boards understand #Bitcoin , they must evaluate whether holding it as an asset would ultimately unlock value for their shareholders (hint: it would).

By holding BTC on their balance sheet, they would recognize the following benefits:

1. Reduce cash holdings to preserve the power of their capital

2. Attract new investors who would see exposure to BTC as a positive

3. Hedge against currency risk

4. Gain upside in asset value/book value due to #BTC price appreciation.

As of the end of 1Q2020, there are 4 companies with $100B+ cash on their balance sheet:

Microsoft ($137B)
Berkshire Hathaway ($128B)
Alphabet ($121B)
Apple ($106B)

Combined between these four companies alone, they have amassed nearly a half trillion dollars in cash.

After shareholders begin putting pressure on these companies to allocate a portion of their holdings in #BTC (because it’s the right thing to do to maximize shareholder value and minimize risk), these companies will be forced to follow in MicroStrategy’s footsteps.

Assuming that they choose to allocate 2% of their cash holdings to #BTC , these 4 companies alone would need to buy $10B worth (~800,000 BTC at current price).

In case you’ve been under a rock, post-halving production is only ~900 newly minted Bitcoin per day.

Do the math..

These four companies alone would swallow up the entire new supply of Bitcoin for nearly 3 years in order to meet their asset allocation goals. There simply isn’t enough Bitcoin available for even these four companies to acquire what they will need/want. So...what happens?

As private and public companies start scrambling in response to MicroStrategy’s groundbreaking decision, the demand for corporate Bitcoin buying will surge in the next 3-6 months (after meetings/decisions/votes/board approvals/etc). The large demand will drive pricing up

If price went to $100,000 per BTC...there would be $90M worth of new Bitcoin available on the market per day. Think $90M can’t get purchased daily? These top 4 companies would still need an entire quarter of buying every single newly minted BTC just to have a 2% allocation.

It is estimated that non-financial institutions have $4T+ in cash total. When the buying starts and execs start to realize that if they’re late to this party it is going get very expensive, it will create a domino effect of buyers. Just 1% of the $4T in corporate cash =$400B

I estimate that by end of 1Q2021, we will begin to see this trend come to fruition and MS will have paved the way for the future. I see a small percentage of companies being quick on the draw here, but even a small % of the corporate cash out there is measured with a $B.

This newfound source of demand, coupled with the recent halving limiting new supply, in conjunction with public global awareness and adoption of blockchain tech will provide the catalyst for #Bitcoin to reach an ATH easily in 2020 and hit $100K by end of 1Q2021.

#BuyBTC