For years, Bitcoin (BTC) has slowly gained popularity among traditional executives and investors. Now, this popularity is reaching a new peak, as more CEOs hope that Bitcoin investments will boost their companies’ appeal to traders. At least some of them are buying Bitcoin with debt.
On Wednesday, February 19, 2025, Bitcoin stopped its three-day decline, reaching $96,200. This development comes on the news that more slow-growing companies are jumping on the Bitcoin bandwagon.
According to recent reports from Bloomberg, multiple companies are copying Michael Saylor’s company Strategy and loading Bitcoin on their balance sheets. This includes companies whose core business has nothing to do with crypto. For instance, Goodfood Market Corp, a struggling meal delivery service, is using its cash reserves to buy Bitcoin.
Similarly, Japan’s Metaplanet converted most of its hotels to Bitcoin holdings. The Trump Media & Technology Group Corp also joined in, allocating a portion of its treasury to crypto investments.
CEOs Copy Saylor’s “Infinite Money Glitch”
Companies like Goodfood Market Corp and Metaplanet are copying Michael Saylor’s strategy. The firm, previously known as MicroStrategy, was an early adopter in this field. CEO Michael Saylor saw that his company’s core business, while profitable, was growing too slowly to justify major investments.
Saylor instead turned to his company’s ample cash reserves. Rather than pay out dividends, he loaded up on Bitcoin. As BTC was growing rapidly, so was the interest in MicroStrategy. Saylor soon began purchasing Bitcoin with debt by offering convertible bonds to investors.
Most recently, Saylor revealed plans to issue another $2 billion in bonds to buy Bitcoin. As of February 18, the company owns 478,740 Bitcoin or 2.25% of all the coins in existence. Furthermore, these investments were profitable at an average price of $65,033 per coin.
Described by some as an infinite money glitch, Saylor’s major purchases of Bitcoin also boost Bitcoin’s price. This helps boost their valuation, allowing them to buy even more Bitcoin, pushing its price further. With more and more companies starting this practice, a bidding war may start, pushing Bitcoin’s price even higher.
Risks of Buying Bitcoin on Debt
Buying Bitcoin on debt is a good idea as long as the price keeps going up. Still, there are some concerns about the practice. For one, even with Saylor’s purchases, Bitcoin is very volatile. If the price declines rapidly, companies buying Bitcoin on debt may be in financial trouble.
Additionally, if more companies start implementing the strategy, the effect on the price of their shares will likely wear off. This could result in a massive sell-off of Bitcoin reserves, creating a negative chain reaction.
This means that the recent wave of corporate adoption is a boost for Bitcoin in the short term. However, in the long run, it creates a risk of major corrections.
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