Michael Saylor has been spilling a lot of ink lately and the phenomenon is not going to stop. In fact, the entrepreneur is now advising businesses to create a cash flow in Bitcoin. This advice could have many consequences.
Cash in Bitcoin; yes but not for all companies
There is a lot of talk about Michael Saylor. After leaving his position as CEO of MicroStrategy, the entrepreneur has announced that he wants to devote himself entirely to Bitcoin. In fact, he will still be on the company’s board of directors and will handle the most executive part of the company.
To explain his choices, Saylor did not hesitate to give numerous interviews. He also spoke to CNBC to break the silence about his decision. Between two questions, the former CEO even advised companies looking to expand their cash flow to create a reserve of Bitcoin.
Unfortunately, despite the entrepreneur’s enthusiasm, this advice is not to be taken lightly. Primarily due to the risks associated with investing in Bitcoin.
The small orange coin is strong but remains subject to very high volatility. The latter has recently been accompanied by a strong correlation with traditional markets. In other words, a company building a reserve of BTC while cash could see it decline overnight. It would take a new economic crisis or an accident in the cryptocurrency industry to lose everything.
The easiest way for a company interested in cryptocurrencies is to create a reserve of Bitcoin that remains a minority of the proportion of traditional cash. Furthermore, contrary to what Michael Saylor seems to suggest, BTC is not suitable for all companies. Your investment requires education and a solid strategy. Businesses should also choose their preferred cryptocurrency based on their needs and, perhaps, bet on multiple different currencies to protect themselves from a possible price drop.
The former CEO would not be an example for the cryptocurrency sphere
If the entrepreneur is the unconditional supporter of BTC and suggests that the latter is an accessible asset, we must not forget that it has caused significant losses for MicroStrategy. According to Fortune, the company lost $ 2 million due to miscalculations by its CEO. It even appears that it was this incident that pushed Michael Saylor out, although similar comments were heavily criticized by the crypto community on Twitter.
According to Mr. Saylor, having said that, this ugly patch would remain anecdotal. And the former CEO goes even further: investing in Bitcoin would be almost risk-free for him. In April, he said the digital asset was safer than traditional bonds. Words that could, however, mislead companies that are too greedy or profane.
Finally, it is clear that the advice given by the entrepreneur can have disastrous consequences for the entire crypto sector. Investing in business blocks could drive Bitcoin’s price up at lightning speed. If so, both Michael Saylor and MicroStrategy could get rich. However, the phenomenon may not last.
BTC would encounter another period of stagnation once all businesses are equipped, although it is more likely to be buying and selling steadily. We were therefore able to witness the explosion of a new bubble. Damaged companies would run out of cash and resell their coins in a panic. A cryptographic winter worse than the last would then befall the industry and its origin would lie in the slightly too enthusiastic words of one and only one man.
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