MicroStrategy's bitcoin bet is creating a buzz that could help the business
MicroStrategy just turned in one of its strongest quarters in the last decade, according to CEO Michael Saylor - and part of that has to do with its bitcoin strategy.
During the software firm's Q3 earnings call, Saylor devoted much of his floor time to extolling the virtues of bitcoin. The company has made the cryptocurrency its primary treasury reserve asset in recent months.
MicroStrategy turned in its highest Q3 total revenue since 2016, which is a 6% increase from last year. Profit reached $19.8 million, increasing from last year's reported $11.6 million.
What's changed is its bitcoin play. After the July announcement of its intention to transfer its reserves towards bitcoin, the firm purchased $425 million or 38,250 BTC at $11,111 a coin this quarter. This, said President and CFO Phong Li, has boosted MicroStrategy's reputation and brought in more prospective customers.
"Our investment in Bitcoin has also allowed MicroStrategy to tap into the passion of the broader crypto market in a smart sophisticated technologies to advocate for the independent and open markets, whether for a financial assets or digital ones," said Li. "We've seen a notable and unexpected benefit from our investment in Bitcoin in elevating the profile of a company in the broader market."
With that in mind, Li said MicroStrategy will be purchasing more bitcoin.
Connecting the bitcoin buzz to stronger metrics, Li said MicroStrategy's bitcoin play has driven increased traffic to its website and driven more engagement with new types of customers. There's been increased activity up front, but because the onboarding process takes time, the firm has yet to see "material revenue as a result of the increased activity."
MicroStrategy isn't the first to include Bitcoin on the balance sheet. Square included $50 million, or 4,709 BTC to its balance sheet earlier this month. Saylor said Square's push further into bitcoin has been a huge confidence booster.
Indeed, much of Saylor's address to his shareholders revolved around making a case for where he sees bitcoin is headed, in addition to MicroStrategy's use of the crypto as its reserve. Saylor argued for the asset to be viewed as programmable gold, and likened coming bitcoin adoption to that of the social network revolution.
"I think in time people will start to understand the power of collecting the monetary energy of a billion individuals or thousands of corporations or banks or billionaires or high net worth individuals or governments. If we can collect that monetary energy onto a software network and store it and channel it. It becomes something altogether more exciting than just the bar of gold or a virtual bar gold or a digital-only bar of gold it becomes a monetary network. And it's a monetary network, a digital monitoring network that doesn't bleed monetary energy," said Saylor.
Preserving and capitalizing on this "monetary energy," according to Saylor, is at the core of the firm's decision to adopt bitcoin for its treasury reserve.
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