The number of public companies with core exposure to bitcoin is growing. Today bitcoin miner Cipher Mining Technologies said it would merge with a SPAC called Good Works. The big one, Coinbase, is planning to go public soon. And then there is Microstrategy, a publicly traded data analytics software firm that has basically mortgaged its future on bitcoin. Microstrategy’s bet shows starkly how zero-rate financing and bitcoin mania are combining to produce what can only be described as risky bets.
Microstrategy, which a year ago was worth $1.3 billion, in the past few months has poured most of its cash plus an additional $1.6 billion raised in convertible note offerings into bitcoin. Just today, CEO Michael Saylor announced the company had bought an additional $10 million worth of the cryptocurrency. Microstrategy isn’t the only tech company to invest in the cryptocurrency—Square and Tesla come to mind. But for those companies, the bitcoin purchases were relatively small side bets to their main business. In contrast, Microstrategy’s $2.2 billion bitcoin investment is now by far its biggest asset.