Michael Dell, the founder and CEO of Dell Technologies, has caused a stir by hinting at the possibility of his company considering Bitcoin (BTC) as an investment option.
On June 21, Dell took to Twitter to share the message “Scarcity creates value,” a phrase often linked to Bitcoin due to its capped supply of 21 million tokens amid increasing demand. His tweet quickly caught the attention of Michael Saylor, a well-known advocate for Bitcoin as a corporate treasury asset.
Dell’s subsequent repost of Saylor’s reply, along with an image of Cookie Monster consuming Bitcoin, has left the market buzzing with anticipation of a potential future investment in the cryptocurrency, either from his personal portfolio or through his company.
Dell’s interest in Bitcoin comes after his recent $2.1 billion cashout. His recent financial moves provide a strong foundation for the potential investment in Bitcoin. For example, Dell Technologies’ stock has soared nearly fivefold since its return to the public market in December 2018. In the past 18 months, the company’s Class C common stock has surged from $40 to $145 per share, quadrupling Dell’s net worth to around $120 billion, making him the 14th richest person globally.
In 2024, Dell has cashed out $2.1 billion while retaining 58% of the company’s ownership, leaving him with excess capital to potentially invest in the Bitcoin market, especially as the U.S. dollar’s value may be negatively impacted in the future due to rising U.S. debt.
Analysts believe that Bitcoin can benefit from corporations like Dell Technologies, given their potential to generate excess cash due to cost-cutting artificial intelligence technologies.
For corporates, holding even a small percentage of the balance sheet in Bitcoin, such as 1%, could give them a significant edge over competitors. If Dell Technologies allocated 1% of its $5.83 billion cash reserves to Bitcoin, amounting to $58.3 million, it could potentially see this investment grow to $118.7 million in just one year, based on Bitcoin’s historical annualized returns of approximately 103.5% over the past decade. Historical data suggests that corporations can greatly benefit from Bitcoin investment.
At the same time, major investors like Warren Buffett have refrained from buying Bitcoin. Hypothetically, Buffett would have increased his company Berkshire Hathaway’s returns from 214% to 240% over five years if he had allocated even 1% of its net portfolio to Bitcoin.
“Bitcoin is the single best asset to position yourself in for outsized risk-adjusted returns over any multi-year timeframe,” noted analysts. It is important to note that this article does not contain investment advice or recommendations, and readers should conduct their own research before making any investment or trading decision.