MicroStrategy is the largest Bitcoin holding public company that has adopted Bitcoin as its primary treasury reserve asset.
MicroStrategy is a popular name in the cryptocurrency world, not mainly because of its core business intelligence services but for its significant Bitcoin holding. The company has made several headlines on Bitcoin accumulation and hence, becoming one of the top Bitcoin holders. The company is considered a leader in digital asset space as well as enterprise analytics.
Michael Saylor, executive chairman and co-founder of MicroStrategy, envisions MicroStrategy as a leading Bitcoin bank focusing on creating Bitcoin-based financial products. It is the world’s largest corporate holder of Bitcoin with just more than 2% of the Bitcoin outstanding. The stake is now worth about $42 Billion.
In this article, we’ll have a closer look at what makes MicroStrategy (MSTR) a “crypto whale,” why MSTR invests in Bitcoin, buying strategies- its impact and risk, and Saylor’s BTC price prediction.
MicroStrategy
MicroStrategy was founded by Michael Saylor and Sanju Bansal in 1989. It is a prominent player in business intelligence wherein the company provides solutions that assist organisations in making data-driven decisions and establishing a trusted reputation across industries.
However, MicroStrategy’s shift to Bitcoin in 2020 significantly transformed its public image. The company evolved from a software company to a major Bitcoin player, adopting cryptocurrency as its principal asset. This move makes MicroStrategy a leader in corporate Bitcoin adoption.
MicroStrategy’s Bitcoin Accumulation
MicroStrategy’s Bitcoin journey began in August 2020. It was the beginning of an aggressive acquisition campaign. Here’s a timeline of MicroStrategy’s key Bitcoin purchases:
2020 Buy
MicroStrategy entered the Bitcoin market in 2020 with its first purchase of 21,454 BTC for $250 Million, placing Bitcoin as a hedge against inflation. By December, the company expanded its holdings by acquiring an additional 48,016 BTC for $875 Million, bringing its total holdings to 70,470 BTC by the year-end.
2021 Buy
In 2021, MicroStrategy aggressively expanded its Bitcoin holdings. Key purchases included 19,452 BTC in February for $1.026 Billion and 13,005 BTC in June for $489 Million. By December, the company had added a total of 42,848 BTC, bringing its cumulative holdings to 124,391 BTC, further solidifying its position in the cryptocurrency market.
2022 Buy
Despite market volatility, MicroStrategy acquired 7,853 BTC throughout 2022 for a total of $262.65 Million. In December, the company sold 704 BTC for $11.8 Million as a strategic adjustment. The company later revealed that the step was taken for tax purposes. However, it rebounded with a purchase of 810 BTC, reinforcing its long-term Bitcoin strategy.
2023 Buy
MicroStrategy’s one of the biggest acquisitions was seen in 2023, with 25,900 BTC purchased for approximately $693 Million. Major purchases included 12,333 BTC between April and June for $347 Million and 6,455 BTC in March for $150 Million, showcasing its unwavering commitment to increasing its Bitcoin reserve.
2024 Buy
MicroStrategy set a record with a total purchase of 90,079 BTC for over $6 Billion in the year. Noteworthy acquisitions comprised 27,200 BTC in November for $2 Billion and 18,300 BTC in September for $1.11 Billion. By December, the company had established itself as a front-runner in Bitcoin accumulation.
How Many Bitcoin Microstrategy Holds?
According to data from BitBo’s Bitcoin Treasuries, MicroStrategy currently holds 446,400 Bitcoin as of 31st December 2024 – purchased for $27.9 Billion at an average price of $62,428 per BTC.
With Bitcoin already surpassing the $100,000 price, the company’s assets stand at around $42 Billion. This investment signifies more than 2% of Bitcoin’s entire supply, indicating MicroStrategy’s substantial influence on the crypto market.
Also Read: MicroStrategy Plans to Raise $2B for Bitcoin Investments
Why is MicroStrategy Buying Bitcoin?
Michael Saylor believes that Bitcoin is the company’s prime asset for maintaining wealth. Below are the main reasons for constantly focusing on acquiring Bitcoin.
Hedge Against Inflation
Traditional currencies face inflation risks as central banks continue to generate currency. Saylor believes that the firm’s Bitcoin storage of 21 Million coins makes it a superior store of wealth, similar to digital gold.
Long-Term Asset Appreciation
Bitcoin’s historical growth rate has surpassed traditional asset classes such as stocks and real estate. MicroStrategy aims to gain from Bitcoin’s long-term development.
Financial Resilience
By converting cash reserves into Bitcoin, MicroStrategy diversifies its assets, ensuring liquidity along with getting protection against depreciation of fiat currencies.
Corporate Leadership
Through the adoption of Bitcoin, MicroStrategy has established itself as an innovative leader. This approach has sparked interest among investors and corporations and encourages them to take similar measures.
How MicroStrategy Buys Bitcoin?
MicroStrategy’s ability to fund its Bitcoin acquisitions has been as bold as its buying strategy. Here’s how the company continued adding BTC to its holdings:
Equity Offerings
The company issued shares to raise funds solely for Bitcoin purchases. In late 2024, MicroStrategy raised $42 Billion in equity and debt issues, purchasing $10.2 Billion Bitcoin.
Convertible Debt
MicroStrategy raised funding through convertible bonds. In 2024, the company issued its fifth convertible bond, and ended up raising $3 Billion at zero-interest rate. This type of borrowing enables MicroStrategy to raise funds while deferring repayments.
Direct Purchases
MicroStrategy frequently announces direct Bitcoin purchases. In November 2024, it made headlines by acquiring 55,500 BTC for $5.4 Billion, marking it the biggest single purchase. Through these funding mechanisms, MicroStrategy has cemented its position as one of Bitcoin’s main holders.
Bitcoin Price Prediction by Michael Saylor
According to Michael Saylor prediction, Bitcoin will reach $13 Million per coin by 2045, presenting an outstanding 29% annualised return. The anticipation is driven by increasing institutional acceptance, as more businesses and investors embrace Bitcoin as a reserve asset.
He also mentioned increased regulatory clarity with governments supporting crypto-friendly policies, which further legitimises cryptocurrency, especially Bitcoin. Moreover, developments in Bitcoin technology, such as increased scalability and security, are projected to encourage widespread adoption.
MicroStrategy’s Bitcoin Strategy: Impact and Risk
MicroStrategy’s Bitcoin purchases influence the market significantly. The company’s purchases often boost Bitcoin’s price and investor confidence as seen in February 2021, a 20% surge following the $1 Billion purchase. This has also inspired other corporations to explore the crypto world.
However, MicroStrategy’s effective Bitcoin strategy carries risks like Bitcoin’s volatility and the company’s heavy reliance on debt, which could lead to financial challenges if prices fall or interest rates rise.
Conclusion
MicroStrategy’s Bitcoin journey highlights the company’s role in Bitcoin adoption and transforming institutional strategies. The approach integrates traditional banking and the decentralised system that stimulates global crypto adoption.
Though long-term sustainability of MicroStrategy’s stake is uncertain, its impact on the Bitcoin market is remarkable. The company’s strategy has certainly assisted in Bitcoin evolution.
On January 3, MicroStrategy possessed 446,400 BTC with a value equivalent to about $43.7 Billion. The company aims to raise up to $2 Billion by perpetual preferred stock offering to invest in Bitcoin, part of its 21/21 plan. The new capital raise is a sign of the company’s confidence in its long-term Bitcoin strategy.
