MicroStrategy's Ripple Effect: DeFi Technologies Announces Bitcoin Treasury Strategy

Michael Saylor's MicroStrategy appears to have influenced another company to implement a Bitcoin strategy to help grow the business as publicly-traded DeFi Technologies announced Monday it has adopted the world's largest cryptocurrency by market cap as its primary treasury reserve asset.

To kick off the said strategy, DeFi Technologies purchased 110 Bitcoins worth around $7.4 million based on current prices. "DeFi Technologies believes it [Bitcoin] has unique characteristics as a scarce and finite asset, making it a reasonable hedge against inflation and a safe haven from monetary debasement," the company said in a press release.

DeFi Technologies further added that it believes Bitcoin is a "preferable alternative" as opposed to traditional assets due to its resilience in both digital and architectural aspects. Also, the massive value gap between the digital asset and other traditional assets makes BTC potentially able to generate outsized returns as more people use the cryptocurrency.

DeFi Technologies CEO Olivier Roussy Newton noted that Bitcoin has been the best-performing asset over the last 10 years and the company's adoption of a BTC strategy for its treasury reserve reflects its confidence in the token as an inflation hedge.

News of the latest company to join the growing list of firms adopting a Bitcoin strategy comes more than a week after non-crypto firm Semler Scientific revealed that it purchased BTC to help drive its business.

In particular, the healthtech firm said it sees Bitcoin as a "safe haven amid global instability" due to its increasing use by consumers around the world. The growing consumer embrace of the digital asset was demonstrated further after the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs in January, Semler Scientific pointed out.

On the same day, Japanese Web3 infrastructure company Metaplanet said it purchased $1.6 million worth of BTC, on top of its previous Bitcoin buys. It is worth noting that Metaplanet was a real estate-focused company before it branched out to providing Web3 consulting services among others.

Metaplanet, which said it "unequivocally prioritizes a Bitcoin-first, Bitcoin-only approach," has implemented a strategy that's more in line with Bitcoin maximalist MicroStrategy.

Before companies started snapping up Bitcoins as part of efforts to build their business treasuries, MicroStrategy led the way in amassing as many BTC as it can. The Saylor-founded tech firm has been purchasing the asset regardless of market sentiment and price action for years.

As of April 26, 2024, MicroStrategy has purchased 214,400 BTC. It describes itself as the world's largest known corporate holder of Bitcoin.