MicroStrategy, a large business intelligence and software company, has made another big move in the world of Bitcoin. Between August 6 and September 12, 2024, the company bought around 18,300 Bitcoin (BTC), increasing its already large Bitcoin holdings. This purchase was funded by selling over 8 million shares of the company.
MicroStrategy’s $1.11 Billion Bitcoin Purchase
MicroStrategy’s latest Bitcoin purchase cost a total of $1.11 billion. According to a filing with the United States Securities and Exchange Commission (SEC), the company paid an average of $60,408 for each Bitcoin, including fees and expenses. This brings the company’s total Bitcoin holdings to around 244,800 BTC, which is currently worth about $14.14 billion.
The purchase is part of MicroStrategy’s ongoing strategy to invest heavily in Bitcoin. The company, led by CEO Michael Saylor, made its first Bitcoin purchase in August 2020. Since then, they have steadily increased their holdings and continue to show confidence in the cryptocurrency market.
The Growth of MicroStrategy’s Bitcoin Holdings
MicroStrategy’s first purchase of Bitcoin was back on August 11, 2020, when Bitcoin was trading at much lower prices. Over the years, the company has continued to buy more Bitcoin, taking advantage of price dips and maintaining a long-term strategy. The latest purchase has boosted MicroStrategy’s holdings to 244,800 BTC, making them one of the largest holders of Bitcoin among public companies.
The average price that MicroStrategy has paid for all its Bitcoin purchases since 2020 is around $38,585 per BTC. This means the company has spent about $9.45 billion to acquire its Bitcoin holdings, and now those holdings are worth $14.14 billion. Many financial analysts have debated whether this strategy is too risky, but so far, it has been profitable for MicroStrategy.
How MicroStrategy Funds Its Bitcoin Purchases
One of the most interesting aspects of MicroStrategy’s Bitcoin buying strategy is how they fund these massive purchases. The recent $1.11 billion purchase was made possible by selling 8,048,449 company shares. This was done through a sales agreement with several financial institutions, allowing MicroStrategy to raise the funds needed to buy more Bitcoin.
This type of funding strategy has been used before by the company and allows them to expand their Bitcoin portfolio without dipping into cash reserves or taking on large amounts of debt. The ability to raise funds by selling shares gives the company flexibility and shows how serious they are about holding Bitcoin for the long term.
MicroStrategy’s Stock and Bitcoin Investment Success
MicroStrategy’s strategy of buying Bitcoin has not only grown its cryptocurrency holdings but has also had a major impact on the company’s stock. Since the company started investing in Bitcoin, its stock price has skyrocketed, rising by around 1,000% since August 2020.
At that time, the price of Bitcoin was around $37,000 per coin, and MicroStrategy’s holdings were worth about $13.77 billion. As Bitcoin’s value has gone up, so has the value of MicroStrategy’s stock. Financial analysts have noted that the company has outperformed the S&P 500 index by over 16.25 times, making its stock one of the top performers in the market.
The Debate Over MicroStrategy’s Bitcoin Strategy
MicroStrategy’s approach to buying Bitcoin has sparked a lot of discussion in the financial world. Some analysts believe the company is taking on too much risk by investing so heavily in a volatile asset like Bitcoin. Others, however, praise the strategy as forward-thinking, especially as Bitcoin continues to gain mainstream adoption.
CEO Michael Saylor has been one of the most vocal advocates for Bitcoin, regularly defending the company’s decisions and speaking about the long-term benefits of holding Bitcoin. Saylor believes that Bitcoin will continue to rise in value, and he has publicly stated that he sees it as a superior asset to traditional investments like gold or bonds.
Marathon Digital Adds 5,000 Bitcoin
MicroStrategy isn’t the only company making headlines with its Bitcoin purchases. Marathon Digital Holdings (MARA), a major player in the Bitcoin mining industry, has also been busy buying Bitcoin. In the last month, Marathon added over 5,000 BTC to its reserves, bringing its total holdings to 26,200 BTC, which is worth around $1.5 billion.
Marathon follows a similar strategy to MicroStrategy by holding on to its Bitcoin (a strategy known as “HODL”). Marathon’s Bitcoin holdings now account for approximately 0.12% of the total Bitcoin supply, and the company is the second-largest public holder of Bitcoin, right behind MicroStrategy.
Marathon Digital’s aggressive buying spree shows that public companies are becoming more and more involved in the cryptocurrency space, not just as a technology but also as a store of value and investment.
Bitcoin Holdings by Public Companies Grow
In 2024, public companies have continued to increase their Bitcoin holdings. At the beginning of the year, public companies held around 272,770 BTC, but by now, that number has grown to 333,329 BTC. This trend is not limited to companies like MicroStrategy and Marathon Digital but extends to ETFs (Exchange-Traded Funds) and other investment funds as well.
ETFs and funds that hold Bitcoin have increased their holdings from 771,000 BTC to over 1 million BTC this year, showing that institutional investors are also getting more involved in Bitcoin. This is seen as a sign that Bitcoin is maturing as an asset class, and more traditional investors are beginning to take it seriously.
MicroStrategy’s Future with Bitcoin
As MicroStrategy continues to buy more Bitcoin, the company has made it clear that it sees cryptocurrency as a core part of its business strategy. CEO Michael Saylor has said that the company plans to hold Bitcoin for the long term and may even continue to buy more as opportunities arise.
The company’s success in growing both its Bitcoin holdings and its stock price has been remarkable. However, with the volatile nature of the cryptocurrency market, it remains to be seen whether this strategy will continue to pay off in the future.
In the meantime, MicroStrategy has positioned itself as a leader in the world of Bitcoin, and other companies are taking note. As more public companies and institutions continue to buy Bitcoin, the future of the cryptocurrency looks bright, and MicroStrategy is likely to remain at the forefront of this trend.
The Impact of Bitcoin on MicroStrategy’s Stock Price
Bitcoin has played a big role in boosting MicroStrategy’s stock price. When the company first began buying Bitcoin, many investors were unsure whether the move would pay off. But with the rise in Bitcoin’s price over the past few years, MicroStrategy’s stock has soared.
At the same time, the company’s commitment to Bitcoin has given it a unique position in the market. While many other companies have been hesitant to invest heavily in cryptocurrency, MicroStrategy has gone all-in. This has made it an attractive option for investors who believe in the future of Bitcoin.
Financial analysts have pointed out that the company’s stock has benefited from both the rise in Bitcoin’s value and the overall growth of the cryptocurrency market. As more companies and investors buy into the idea of Bitcoin as a store of value, MicroStrategy’s stock is likely to remain strong.
MicroStrategy’s decision to buy 18,300 more Bitcoin and bring its total holdings to 244,800 BTC is a bold move that reflects the company’s confidence in the future of cryptocurrency. With its stock price soaring and its Bitcoin holdings continuing to grow, MicroStrategy is well-positioned to benefit from the ongoing rise of Bitcoin. As other companies like Marathon Digital also continue to add to their Bitcoin reserves, it’s clear that public companies see value in holding and investing in this digital asset.
