MicroStrategy Incorporated (NASDAQ: MSTR), in a filing with the United States Securities and Exchange Commission on Monday, disclosed that it would adopt a new Treasury Reserve Policy with renewed treasury management and capital allocation strategy.
The policy indicates that the company is bullish on Bitcoin and that the open-sourced digital asset would be treated as an important component of the treasury reserve assets.
What Happened: In its updated policy, the Virginia-based business intelligence company declared that it would treat Bitcoin as the primary treasury reserve asset on an ongoing basis.
This would in turn lead to a higher Bitcoin exposure that is more than the $250 million investment the company reported in an earlier filing in August. Cash, Cash equivalents, and short-term investments above the working capital threshold will also be categorized as a treasury reserve asset.
Why Does It Matter: According to a Coindesk report last month, the company expressed its belief that the virtual currency powered by a public blockchain is superior to cash over the long term, claiming it to be a “reasonable hedge against inflation.” At the time, MicroStrategy committed to investing up to $250 million in Bitcoin and gold.
MicroStrategy CEO Michael J. Saylor also remarked that the cryptocurrency “is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
Price Movement: After a 1.06% price rise during trading hours on Monday, MSTR stock closed at $142.62.
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.