Earlier this year, business intelligence giant MicroStrategy put $425 million of its treasury funds into Bitcoin (BTC). The move was largely seen as a big step in the right direction for mainstream Bitcoin adoption. MicroStrategy, with its CEO and founder Michael Saylor — a Bitcoin skeptic-turned bull — may not usher in massive corporate adoption for crypto's pioneering asset, however, according to former hedge funder Raoul Pal.
"I don't think Michael is going to drive corporate adoption in the space because he's really speaking the language of Bitcoin and not the language of corporate treasurers, and that has to happen," Pal told podcaster Peter McCormack on an episode of the What Bitcoin Did podcast, published today.
"We're very bad in this space speaking the language of the others that we actually want to encourage into the system in the end."
MicroStrategy publicized its purchase of $250 million worth of BTC back in August. The firm picked up an additional $175 million in September. Once a major skeptic of the asset, Saylor has turned full bull on Bitcoin, posting about the coin frequently on Twitter. He also said he bought 17,732 BTC for his personal holdings prior to his company's purchase.
"Forget the amount of money it is, it was a large part of the cash reserves," Pal said of MicroStrategy's BTC pickup. "Now, most companies won't do that, but Michael's a true believer," Pal explained, leading into his quote about Saylor not speaking the right language for adoption growth.
"I've mentioned this numerous times: You're not going to get the pension system and the asset allocations until you start talking in terms of bearer asset allocation models," Pal said. "None of us know what those are because nobody uses them except that industry."
Pal himself admittedly did not know the exact asset allocation strategies various sectors employ, but he did describe their widespread prevalence. Essentially, each sector has a common set of its own native specific goals, terminology and strategies.
"It's based on the asset allocation models that the entire pension fund industry uses and that consultants use and that actuaries use and all this stuff," he explained.
"To talk about the 100-year value of money to the treasurer of Microsoft who might be in his job for 10 years before he moves on somewhere else is irrelevant. It doesn't matter. Show him portfolio diversification effects versus cash that he holds across credit commercial, paper, treasuries, different currencies and say, 'Well, if you put this in, this is what it does to your portfolio.' Then he's going to go, 'Yeah, I get it. I'm going to do something like that.'"
A number of other mainstream players have entered large Bitcoin positions in 2020, such as billionaire Paul Tudor Jones. The corporate trend into the asset is still very much in its infancy, however.