MicroStrategy purchases 11,931 Bitcoin for $786 million, increasing its holdings to 226,331 Bitcoin and bringing its 2024 total to $2.4 billion.
TakeAway Points:
- MicroStrategy bought 11,931 Bitcoin for $786 million, bringing its total holdings to 226,331 Bitcoin, which is worth $14.9 billion.
- Since 2020, the corporation has invested $8.3 billion in Bitcoin, generating an 80% paper gain as the value of the cryptocurrency increased.
- Since MicroStrategy started purchasing Bitcoin as an inflation hedge and cash substitute, the company’s stock has increased by more than 1,000%.
MicroStrategy’s newest Bitcoin Purchase
Executive Chairman Michael Saylor of MicroStrategy Inc. (NASDAQ: MSTR) announced the purchase of 11,931 Bitcoin for approximately $786 million, as per a filing with the US Securities and Exchange Commission on Thursday.
This acquisition, which took place between April 27 and June 19, marks MicroStrategy’s third-largest Bitcoin purchase to date. The company previously acquired 12,000 Bitcoin for $821 million on March 11.
The funds for this latest purchase were raised through the sale of convertible notes, a strategy MicroStrategy has employed multiple times this year. In 2024 alone, the company will have spent over $2.4 billion on Bitcoin, significantly increasing its holdings. As of June 20, 2024, MicroStrategy holds a total of 226,331 Bitcoin, valued at approximately $14.9 billion based on the current Bitcoin price of around $66,000.
Dynamic Financial Actions
MicroStrategy’s aggressive Bitcoin acquisition strategy is backed by substantial financial maneuvers. The company recently completed an $800 million offering of 2.25 percent convertible senior notes, initially planned for $500 million but later increased due to high demand. This follows a similar debt issuance in March, where the company raised funds to purchase 9,245 Bitcoin for $623 million.
Michael Saylor, who began accumulating Bitcoin in 2020, views the cryptocurrency as an inflation hedge and an alternative to holding cash. Since Saylor’s initial purchase, Bitcoin has surged by approximately 600%, and MicroStrategy’s stock has skyrocketed by more than 1,000%.
The company’s average purchase price for Bitcoin stands at $36,798 per token, totaling around $8.33 billion spent. This strategic investment has resulted in an 80% paper gain, with the current value of their holdings at $14.9 billion.
Market Effects
MicroStrategy’s continuous Bitcoin purchases have had a notable impact on the market. Despite recent price drops, the company’s acquisitions have strengthened Bitcoin’s fundamentals.
The supply of Bitcoin on cryptocurrency exchanges has been steadily decreasing, driven by institutional investors seeking a hedge against high inflation in fiat currencies. This has helped sustain Bitcoin’s price above $65,000.
The latest acquisition by MicroStrategy outstrips the $152 million net cash outflows from US-based spot Bitcoin ETFs on Wednesday, further solidifying the company’s influence on the market. If Bitcoin’s price maintains its bullish sentiment, it could reclaim the $67,000 support level and potentially rally towards its all-time high.
About MicroStrategy
American business MicroStrategy Incorporated offers cloud-based services, mobile software, and business intelligence (BI). Michael J. Saylor, Sanju Bansal, and Thomas Spahr founded the company in 1989.
It creates mobile apps and software for analysing internal and external data to support business choices. Located in Tysons Corner, Virginia, which is part of the Washington metropolitan area, the corporation is publicly traded.
The BI Platform from Oracle Corporation, IBM Cognos, and SAP AG Business Objects are its main rivals in the business analytics market. Saylor served as CEO from 1989 to 2022 in addition to his role as Executive Chairman. Thanks to its substantial bitcoin holdings, it is commonly regarded as a bitcoin proxy.
