‘Why the huge spike in bitcoin?’

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(Art by Jason Benjamin)

Beyond the Rhetoric

By Harry C. Alford III

That’s what a friend asked me as Bitcoin reached $28k for the first time. Below is how I replied.

In 2017, the speculative frenzy was largely driven by retail investors. This year is different because institutions and corporations are adopting Bitcoin. Institutions see Bitcoin’s potential as a global store of value and a hedge against inflation. We are witnessing historic monetary inflation. Twenty-four percent of all existing dollars were printed in the last 12 months.

The risk/reward profile is attractive to investment heavyweights like Paul Tudor Jones, Stanley Druckenmiller, and corporations like Microstrategy, Square, and MassMutual purchasing and transforming their cash reserves into Bitcoin.

“The Company continues to operate in accordance with its Treasury Reserve Policy and currently holds approximately 70,470 bitcoins,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “The acquisition of additional bitcoins announced today reaffirms our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value. We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the Company, have been significant factors in the recent appreciation in our stock price.”

There have been many Bitcoin imitators like Bitcoin Cash, Bitcoin SV, and Bitcoin Gold. But none can duplicate the monetary energy that flows into the Bitcoin network. Bitcoin is decentralized and hard-capped, with only 21 million that will ever be mined.

Bitcoin can do several beneficial things to a portfolio. Companies like Microstrategy continue “to believe bitcoin will provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash,” said Phong Le, President & CFO, MicroStrategy Incorporated.

As more institutions invest, the price will rise, and so will the demand. The year 2021 is shaping up to be a big breakout year for Bitcoin.

Harry Alford III

Harry Alford is co-founder of humble ventures, a venture development firm accelerating tech startups in partnership with large organizations and investors.

Whether in venture capital, education, or sports, Harry’s career has always centered around inclusion. Harry Alford is co-founder of venture development firm, humble ventures, where he accelerates the growth of startups in partnership with large enterprises and investors. In addition to being a Techstars mentor and a member of the Board of Advisors for the Dingman Center, Harry is the Interim Director of the University of Maryland’s Southern Management Leadership Program where he supports and develops students who have an interest in entrepreneurship and an enthusiasm for starting a business venture, leading a company, or changing the world.  Harry, a two-time All-American, ACC Tournament MVP, and ACC All-Tournament Team as a goalie on the Maryland Lacrosse team (2003-2007), holds a BA from the University of Maryland, an MA in Sports Industry Management from Georgetown University, and an MBA from Babson College. Harry also has experience playing professionally in Major League Lacrosse. Harry lives in Washington, DC with his wife and two sons and down the street from his parents and identical twin.

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