Communication is fundamental, especially when it comes to explaining Bitcoin to conventional corporate entities.
Earlier this year, business intelligence giant MicroStrategy invested $425 million of its cash funds in Bitcoin (BTC). The move was widely seen as a major step in the right direction for mainstream adoption of Bitcoin. However, MicroStrategy, with its CEO and founder Michael Saylor, a Bitcoin skeptical hype, may not begin a massive adoption of the pioneering asset cryptomorphism, according to former hedge fund manager Raoul Pal.
„I don’t think Michael will drive corporate adoption in space because he’s actually speaking the language of Bitcoin and not the language of corporate treasurers, and that has to happen,“ Pal told podcaster Peter McCormack for an episode of What Bitcoin Did Podcast, published this Tuesday.
„We are very bad at this space in speaking the language of others that we really want to encourage to enter the system at the end of the day“.
MicroStrategy announced its purchase of $250 million of BTC in August. The company purchased an additional $175 million in September. Once a major asset skeptic, Saylor turned to Bitcoin, often posting about the currency on Twitter. He also said he bought 17,732 BTC for his personal possessions before buying his company.
„Forget how much money it is, it was a big part of the cash reserves,“ said Pal about buying BTC from MicroStrategy. „Now, most companies won’t do that, but Michael really believes,“ Pal explained, leading to his talk about Saylor not speaking the right language for adoption growth.
„I’ve mentioned it countless times – you’re not going to get the pension system and asset allocations until you start talking in terms of bearer asset allocation models,“ Pal said. „None of us know what they are because no one uses them except that industry.
Pal himself admittedly did not know the exact asset allocation strategies that various sectors employ, but he described their widespread prevalence. Essentially, each sector has a common set of its own native objectives, terminology, and specific strategies.
„It is based on the asset allocation models that the entire pension fund industry uses, which consultants use and which actuaries use and all that,“ he explained.
„Talking about the value of 100 years‘ money to Microsoft’s treasurer, who may be at his job for 10 years before moving elsewhere, is irrelevant. It doesn’t matter. Show him the effects of portfolio diversification versus the money he keeps on trade credit, paper, treasury bonds, different currencies and say, ‚Well, if you add that, that’s what you do to your portfolio,‘ then he’ll say, ‚Yes, I get it, I’ll do something like that.“
A number of other major players entered Bitcoin’s big positions in 2020, like billionaire Paul Tudor Jones. The corporate trend for the asset is still in its infancy, however.