Michael Dell, the CEO and founder of Dell Technologies, has sparked interest with a cryptic message hinting at the possibility of his company delving into Bitcoin (
BTC
) as a potential investment opportunity.
In a tweet on June 21, Dell wrote, “Scarcity creates value,” a phrase often linked to Bitcoin due to its limited supply of 21 million tokens in the face of growing demand. This tweet quickly caught the attention of Michael Saylor, a prominent advocate for Bitcoin as a corporate treasury asset.
Dell’s subsequent resharing of Saylor’s response, along with an image of Cookie Monster feasting on Bitcoin, has left the market buzzing with speculation about a potential future investment in the cryptocurrency, either from his personal portfolio or through his company.
Dell’s foray into the world of Bitcoin comes on the heels of his $2.1 billion cashout, setting the stage for this potential investment. For instance, since returning to the public market in December 2018, Dell Technologies’ stock has increased nearly fivefold. In the past 18 months alone, 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.
So far in 2024, Dell has cashed out $2.1 billion while retaining 58% of the company’s ownership. This means he has ample capital to invest in the Bitcoin market, especially in light of rising U.S. debt, which could potentially impact the value of the U.S. dollar in the future.
According to Joe Consorti, an analyst at the Bitcoin Layer, Bitcoin can be advantageous for corporations like Dell Technologies, who stand to gain from the excess cash generated by cost-cutting artificial intelligence technologies. He believes that holding even a small percentage of the balance sheet in Bitcoin could give companies a significant edge over competitors.
For example, if Dell Technologies allocates 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 indicates that corporations can greatly benefit from investing in Bitcoin. MicroStrategy, led by Saylor, has seen substantial profits from its strategic BTC acquisitions in recent years.
Meanwhile, notable investors like Warren Buffett have refrained from entering the Bitcoin market. Hypothetically, Buffett would have increased his company Berkshire Hathaway’s returns from 214% to 240% over five years if he had allocated just 1% of its net portfolio to Bitcoin.
“Bitcoin is the single best asset to position yourself for significant risk-adjusted returns over any multi-year timeframe,” noted Consorti, though this article does not offer investment advice or recommendations. As always, every investment and trading move comes with risk, and readers should conduct their own research before making a decision.