No fewer than 47 companies have used the term “inflationIn their revenue calls for the first quarter of 2021.
According to a report According to data from financial market data provider FactSet on Monday, that is the highest number of companies to have done so in the past decade.
In early April, the United States Bureau of Labor Statistics released it is “Producer price indexThe report shows a 4.2% year-over-year increase in PPI, the highest since September 2011.
While Federal Reserve Chairman Jerome Powell further argues that current inflation and consumer price index numbers are temporary, there is a counter-argument that companies will try to pass the burden of higher production costs on to their consumers.
In the meantime, companies may also be looking for ways to protect their cash reserves from a depreciation of the US dollar after nearly $ 6 trillion in stimulus money poured into the US economy in the wake of the ongoing coronavirus pandemic.
Business intelligence company MicroStrategy made headlines back in August 2020 when it announced its first Bitcoin (BTC) purchase. Michael SaylorThe company now holds over 90,000 BTC, valued at more than $ 5 billion, with the asset increasing nearly fivefold since August 2020.
On Monday, Tesla announced in the company’s Q1 financial report the sale of $ 272 million worth of Bitcoin – roughly 10% of its BTC holdings. According to Tesla’s earnings call for the first quarter of 2021, the electric vehicle maker made a net profit of $ 101 million on the sale.
Tesla announced its BTC stake back in February and announced that it had bought around $ 1.5 billion worth of Bitcoin.
With inflation likely to continue its upward trend, at least in the short term, more US companies could convert some of their cash reserves into Bitcoin. This probability is despite arguments to the contrary from treasury experts in February.
Already in March Dawn FitzpatrickSoros Fund Management’s chief investment officer said that due to the depreciation of the US dollar, BTC was no longer a marginal asset.