MicroStrategy Buying Bitcoin Shows Institutional Investors Seek to De-Risk

Bitcoin adoption by big-money players is once again on the agenda following the recent $250 million BTC purchase by MicroStrategy.

Even when Bitcoin dipped to $3,800 during the "Black Thursday" market crash, exchanges reported an uptick in retail BTC buying.

The move saw MicroStrategy swapping cash for BTC as its treasury reserve asset in what industry commentators say could be a watershed event for Bitcoin institutional adoption.

Billionaire hedge fund investor Paul Tudor Jones revealed back in May that 1% of his total assets in BTC are a hedge against inflation, tipping Bitcoin to become the de-facto leader in the emerging global financial landscape.

The Bitcoin purchase announcement also had a positive impact on MicroStrategy stock, as it surged by 12%.Bitcoin as a treasury assetBack in June 2020, crypto research firm Messari estimated that institutional investors allocating 1% of their capital in Bitcoin could drive the BTC spot price to $50,000.

A publicly-listed company like MicroStrategy holding Bitcoin as a marketable investment on its corporate balance sheet certainly falls into that same category of institutional investment.

More institutional involvement in Bitcoin will likely enhance the maturity of the asset and improve its overall appeal even further.

Potential for huge upsideAnother interesting aspect of MicroStrategy's Bitcoin purchase is that it constitutes a direct exposure to the asset, as Saylor believes Bitcoin has "More long-term appreciation potential than cash." Usually, institutional interest in BTC involves indirect investment via shares in hedge funds or derivative contracts, so holding Bitcoin either via self-custody or through third-party custodians has not been popular.

Most seemingly agree that the influx of institutional money into Bitcoin will cause the spot price to climb further.

In a note to Cointelegraph, Nisa Amoils, managing partner at crypto hedge fund Frontier Capital, summed up the investment thesis of BTC:."People are looking for a way to protect their wealth or that of their shareholders. Bitcoin has always served as a great tool for that purpose. It is sound money built for a digital world. The provable scarcity of Bitcoin will lead to a higher US dollar value as demand for the artificially capped supply sees material increases in demand."