MicroStrategy is adding to its stash of Bitcoins again as part of its strategy to become one of the largest corporate holders of cryptocurrencies. Microstrategy will acquire an extra 18,300 Bitcoins, worth $1.1 billion in total, in addition to the current reserve of about 244,800 BTC.
The news came through social media from Michael Saylor, Executive Chairman and very much the public face for the company’s Bitcoin strategy. He underlined the fact that the average price for the new Bitcoins was $60,408 per coin. This is, of course, not a one-off purchase; Saylor has made it very clear that he regards Bitcoin as a main asset for the company in much the same way that gold has traditionally been used.
MicroStrategy has acquired 18,300 BTC for ~$1.11 billion at ~$60,408 per #bitcoin and has achieved BTC Yield of 4.4% QTD and 17.0% YTD. As of 9/12/2024, we hodl 244,800 $BTC acquired for ~$9.45 billion at ~$38,585 per bitcoin. $MSTR https://t.co/WBBRSKxA1U
— Michael Saylor⚡️ (@saylor) September 13, 2024
MicroStrategy’s Ever-Lasting Love Affair with Bitcoin
The summer of 2020, when MicroStrategy began its frenzied purchasing of lots of Bitcoin, brought a burst of various reactions. Already at that moment, it was too rare for companies to hold the cryptocurrency on their books, and such a scale of investment raised some eyebrows. Fast-forward to today, those same company Bitcoin holdings are now valued at roughly $14 billion, due in large part to a steady increase in Bitcoin’s price from the average per-coin purchase price of $38,585.
Michael Saylor remained sure-footed through his belief that Bitcoin was the best hedge against occurrence of inflation and an unfavourable economic climate. He further said that the supply cap and, more importantly, due to the decentralized nature of the cryptocurrency, it was way more reliable than any fiat currency, whose supplies governments could inflate the way they liked. For him, Bitcoin is ‘digital gold’-as he says in just about every interview.
A Bold Yet Rewarding Strategy
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MicroStrategy’s bold move has been a risk, no doubt about it. The thing is, this bitcoin is a very volatile currency. Critics certainly have not held back when it comes to pointing out the possible downside of that strategy. A sudden plunge in Bitcoin’s price—for example—could seriously hurt the company’s balance sheet, if only in terms of billions of dollars in investments. Thus far, it seems like Saylor’s gamble pays off.
Not only has the value of its hoard of Bitcoin appreciated, but so has the stock of MicroStrategy benefited. MicroStrategy’s stock is up 91% so far this year as prices in Bitcoin rise. The company just so happened to be one of the biggest corporate holders of cryptocurrency. These days, to many investors, the stock of MicroStrategy is a proxy for owning Bitcoin.
The Bigger Picture
The greater context of this is that MicroStrategy has continued with the purchase of Bitcoin against a period when institutional interest in the cryptocurrency is on the rise. Companies like Tesla and Square have also been in the news for investing in the digital asset, but not quite like MicroStrategy. That has put them in a leading role within the corporate world with regard to digital assets.
Meanwhile, Michael Saylor has also leveraged his influence in the larger business community. The CEO became a vocal Bitcoin evangelist, hosting conferences and convincing other CEOs to take a page from MicroStrategy’s move. From industry events down to media appearances, whenever he gets the chance, Saylor never misses telling everyone that, yes, Bitcoin is indeed the future.
What’s Next?
While MicroStrategy has absolutely zero signs of slowing down upon its Bitcoin strategy, everyone is looking to see what is next. Is it going to be more Bitcoin purchases or diversifying into other digital assets such as Ethereum? The one thing that is for certain: while Michael Saylor is running the show, Bitcoin will surely be the main basis of this company’s strategy.
As of now, it still remains really clear as to what the focus of MicroStrategy really is. Establishment of steadily growing Bitcoin reserves sets the company for a leading position in the digital assets world. Whether the long-term payoff will ever come remains to be seen, but Saylor is betting big that the long-term value of Bitcoin will far outweigh both of the short-term risks.
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