The B Word event was held recently with the likes of Elon Musk, Jack Dorsey and Cathie Wood as key speakers. The forum was put together to provide more information for institutions to be able to gain greater clarity on how to embrace a bitcoin strategy. That strategy might be accepting btc as a payment method for goods and services or it might be a strategy to strengthen their balance sheet by converting cash reserves to bitcoin as a number of companies start to follow MicroStrategy’s lead. MicroStragey have converted close to $3B in cash reserves and capital raising to Bitcoin which now sits as an asset on their balance sheet. MicroStrategy’s CEO Michael Saylor embarked on this process as he witnessed his companies cash reserves slowly losing purchasing power over the years due to reckless monetary policy. The cash reserves that his company were building were becoming worth less and less in real terms each year. After thousands of hours of research into where he should invest the companies cash reserves, whether it be bitcoin, real estate, equities or other hard asset, he chose to invest in bitcoin. A further result of the reckless monetary policy that has seen an unprecedented increase in global money supply, we are now starting to see negative interest rates. A crazy situation where the bank charges you interest to keep your savings in the bank. It’s a trickle down effect to retail consumers from central banks charging commercial banks interest on their cash reserves held with them. Central or nation state banks do this in an attempt to encourage banks and therefore retail customers to spend rather than save or hoard cash in an attempt to stimulate the economy in times of low economic activity. Elon mentions in the clip below from the B word event that Tesla cash reserves in Europe are now experiencing negative interest rates. As he eludes to, a clear alternative is converting the cash reserves to bitcoin to preserve wealth as a store of value.
Elon on negative interest rates
