MicroStrategy, led by Michael Saylor, has continued its Bitcoin acquisition strategy, purchasing 21,550 BTC for $2.1 billion between Dec. 2 and 8, 2024. The company now holds 423,650 Bitcoin, valued at approximately $41.5 billion. This recent purchase, made at an average price of $98,783 per Bitcoin, was funded through the issuance of 5,418,449 shares.
MicroStrategy’s Bitcoin holdings, which account for over 2% of the total Bitcoin supply, have cost the company around $25.6 billion. The firm has been acquiring Bitcoin steadily over the last five weeks, purchasing 171,430 BTC during that period. MicroStrategy’s stock has benefitted from the rising value of Bitcoin, with its shares up by more than 480% this year.
The company’s approach has been closely tied to Bitcoin’s price movements. Despite Microstrategy’s strong stock performance, some investors have raised concerns about the risks involved if Bitcoin’s price were to fall sharply.
MicroStrategy has financed its Bitcoin purchases through a combination of debt and the sale of shares, including using proceeds from its $21 billion at-the-market share sale program. The most recent acquisition was funded by net proceeds of $2.13 billion from the sale of shares.
Bitcoin’s value has been increasing, recently surpassing $100,000, with predictions suggesting it could rise further. Derive, a DeFi derivatives platform, estimates a 6% probability of Bitcoin exceeding $150,000 by January. Over the past few months, Bitcoin’s price has increased by nearly 40%, contributing to a significant rise in the value of MicroStrategy’s Bitcoin holdings. Despite the success, the company’s stock is heavily influenced by Bitcoin’s volatile nature, and this dependence on cryptocurrency has led to mixed opinions from financial analysts.
MicroStrategy’s ongoing Bitcoin purchases have positioned it as one of the largest corporate holders of Bitcoin. The company’s strategy has been watched closely by other publicly traded firms, and its Bitcoin-heavy portfolio has inspired others in the space, including Bitcoin miner Riot Platforms. Riot announced a $500 million convertible note offering to acquire more Bitcoin, following in the footsteps of MicroStrategy’s Bitcoin-focused approach.
While MicroStrategy’s Bitcoin holdings continue to grow, its stock price is closely linked to Bitcoin’s performance, and the company’s strategy has raised questions about the risks of relying heavily on a volatile asset like Bitcoin for its business strategy.
