MicroStrategy's CEO, Michael Saylor, made an announcement on September 20 regarding the company's recent acquisition of 7,420 bitcoins, amounting to around $489 million. With this purchase, MicroStrategy's total Bitcoin holdings now exceed 252,000 coins, acquired at a cost of $9.9 billion.
Bitcoin-Focused Corporate Strategy
Since 2020, MicroStrategy has strategically shifted towards a Bitcoin-centric approach, recognizing the cryptocurrency's potential as an effective hedge against inflation and a reliable store of value. The accumulation of over 252,000 bitcoins, valued at more than $15 billion, has significantly enhanced the company's overall shareholder value.
Utilizing Convertible Senior Notes for Funding
To finance its ongoing Bitcoin acquisitions, MicroStrategy has opted to borrow funds by issuing convertible senior notes. In a recent move, the company successfully raised over $1 billion through note offerings, a portion of which was earmarked for expanding its Bitcoin portfolio. This financing strategy has been adopted by various other publicly traded firms looking to capitalize on Bitcoin's growth trajectory.
Speculative Attack on Fiat Currencies
MicroStrategy's continuous accumulation of Bitcoin can be likened to a large-scale "speculative attack" on traditional fiat currencies. By converting fiat currency into the limited and valuable bitcoin asset during periods of undervaluation, the company stands to benefit significantly if Bitcoin maintains its upward trajectory as a prominent global digital store of value.
Leading the Way for Corporate Bitcoin Adoption
Through its bold move to integrate Bitcoin into its treasury reserves, MicroStrategy is spearheading a monumental shift in the corporate landscape. By embracing Bitcoin treasury strategies and incorporating Bitcoin exposure on their balance sheets, other public companies are following in MicroStrategy's footsteps, recognizing the potential benefits of aligning with the world's most resilient digital asset.
Frequently Asked Questions
Can the government seize your gold?
You own your gold and therefore the government cannot seize it. You earned it through hard work. It belongs to you. This rule could be broken by exceptions. For example, if you were convicted of a crime involving fraud against the federal government, you can lose your gold. Also, if you owe taxes to the IRS, you can lose your precious metals. You can keep your gold even if your taxes are not paid.
Should You Buy Gold?
Gold was considered a safety net for investors during times of economic turmoil in the past. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
The gold price has been in an upward trend for the past few years, but it remains relatively low compared with other commodities like silver or oil.
Experts think this could change quickly. Experts predict that gold prices will rise sharply in the wake of another global financial collapse.
They also noted that gold is growing in popularity because of its perceived value as well as potential return.
Here are some things to consider if you're considering investing in gold.
- Consider first whether you will need the money to save for retirement. You can save for retirement and not invest your savings in gold. However, when you retire at age 65, gold can provide additional protection.
- Second, be sure to understand your obligations before you purchase gold. Each type offers varying levels and levels of security.
- Remember that gold is not as safe as a bank account. Losing your gold coins could result in you never being able to retrieve them.
So, if you're thinking about buying gold, make sure you do your research first. And if you already own gold, ensure you're doing everything possible to protect it.
What are the pros and disadvantages of a gold IRA
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on interest earned. This makes an IRA great for people who want to save money but don't want to pay tax on the interest they earn. However, there are disadvantages to this type investment.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. The IRS may prohibit you from withdrawing funds from your IRA before you are 59 1/2 years of age. If you do withdraw funds, you'll need to pay a penalty.
Another problem is the cost of managing your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. In order to make a claim, most insurers will require that you have a minimum amount in gold. Some insurers may require you to have insurance that covers losses up $500,000.
If you choose to have a gold IRA you will need to establish how much gold to use. Some providers limit the number of ounces of gold that you can own. Others allow you to pick your weight.
You will also have to decide whether to purchase futures or physical gold. Gold futures contracts are more expensive than physical gold. Futures contracts offer flexibility for buying gold. You can set up futures contracts with a fixed expiration date.
You'll also need to decide what kind of insurance coverage you want. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. It does provide coverage for damage from natural disasters, however. Additional coverage may be necessary if you reside in high-risk areas.
Insurance is not enough. You also need to think about the cost of gold storage. Insurance won't cover storage costs. For safekeeping, banks typically charge $25-40 per month.
If you decide to open a gold IRA, you must first contact a qualified custodian. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians don't have the right to sell assets. Instead, they must hold them as long as you request.
After you've determined which type of IRA is best for you, fill out the paperwork indicating your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. Your monthly investment goal should be stated.
You will need to fill out the forms and send them to your chosen provider together with a check for small deposits. The company will then review your application and mail you a letter of confirmation.
When opening a gold IRA, you should consider using a financial planner. Financial planners are experts at investing and can help you determine which type of IRA is best for you. They can help you find cheaper insurance options to lower your costs.
Statistics
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
External Links
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads, Example, and Risk Metrics
irs.gov
finance.yahoo.com
cftc.gov
How To
Investing gold vs. stocks
Gold investing as an investment vehicle can seem extremely risky these days. This is because many people believe gold is no longer financially profitable. This belief is based on the fact that gold prices are being driven down by global economic conditions. People believe that investing in gold would result in them losing money. In reality, however, there are still significant benefits that you can get when investing in gold. Below we'll look at some of them.
One of the oldest currencies known to man is gold. There are records of its use going back thousands of years. It was used all around the world as a reserve of value. Even today, countries such as South Africa continue to rely heavily on it as a form of payment for their citizens.
It is important to determine the price per Gram that you will pay for gold when making a decision about whether or not to invest. You must determine how much gold bullion you can afford per gram before you consider buying it. If you don’t know the current market rate for gold bullion, you can always consult a local jeweler to get their opinion.
Noting that gold prices have fallen in recent years, it is worth noting that the cost to produce gold has gone up. Although the price of gold has dropped, production costs have not.
The amount of gold that you are planning to purchase is another important consideration when deciding whether or not gold should be bought. It makes sense to save any gold you don't need to purchase if your goal is to use it for wedding rings. This is not a wise decision if you're looking to invest in long-term assets. You can profit if you sell your gold at a higher price than you bought it.
We hope this article helped you to gain a better appreciation of gold as a tool for investment. We strongly recommend that you research all available options before making any decisions. Only then will you be able to make an informed decision.
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By: Vivek Sen
Title: MicroStrategy Expands Bitcoin Holdings with $489 Million Purchase
Sourced From: bitcoinmagazine.com/business/microstrategy-buys-additional-489-billion-worth-of-bitcoin
Published Date: Fri, 20 Sep 2024 14:52:09 GMT
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