MicroStrategy(MSTR, Financial) Chairman Michael Saylor continues to make a strong case for companies to adopt Bitcoin as he claims that overall adoption of it, especially by leading companies such as Microsoft (MSFT, Financial), could generate a $5 trillion market cap. In a 3-minute pitch to Microsoft’s board, Saylor described Bitcoin as the “highest performing uncorrelated asset” that a corporation can own, providing correlation statistics between Bitcoin and MSFT shares for the trailing four years. Saylor said Bitcoin has a much higher yield than Microsoft stock by at least 10x annually, and Bitcoin should be a genuine interest for any corporation that wants to hedge it.
Saylor further emphasizes that Bitcoin is now experiencing a rise in political approval, especially from the Trump administration and Wall Street, along with other large fund managers. The recent approval of Bitcoin-based spot exchange-traded funds (ETFs) has also brought Bitcoin into the traditional financial market. Bullish factors are yet to be exhausted, and this one could fast-track the uptake of Bitcoin by giant institutional investors, thus the overall growth story.
While the markets have shown the unpredictability of Bitcoin’s performance and regulation remains an issue, Saylor’s pitch conforms to the increasing corporate attraction to digital assets occasioned by favorable market conditions. This is especially the case with Microsoft because full adoption of Bitcoin technology can potentially distort its strategic long-term financial plan regarding growth and uncorrelated return activity.
Still, many businesses see the decision to use Bitcoin as a form of payment as a conservative measure, although the growing trend and an enabling legal framework may compel many companies to adopt it.
This article first appeared on GuruFocus.