MicroStrategy – the business intelligence company co-founded by Michael Saylor – has purchased bitcoin each quarter since August 2020.
The company is the largest corporate holder of the primary cryptocurrency, owning 140,000 BTC. It accumulated its stash at an average price of $29,803, meaning it currently sits on a minor unrealized loss.
Adding More BTC During Every Quarter
Despite the volatile nature of bitcoin and the 2022 bear market that disrupted the cryptocurrency industry, MicroStrategy seems determined to only keep strengthening its BTC position.
The firm jumped on the bandwagon in August 2020 by purchasing over 21,000 BTC and embracing a strategy focused on the leading digital asset.
“Our investment in bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders.
This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” MicroStrategy’s Executive Chairman – Michael Saylor – said at the time.
The company stayed loyal to Saylor’s words and continued increasing its possessions in the following years. In fact, it purchased certain amounts of BTC during each quarter up until now. The firm’s most substantial purchases came at the start of its strategy when it accumulated over 38,000 BTC in Q3 2020 and then took that amount to more than 70,000 BTC by the end of the year.
The organization kept its pace throughout the entire 2021, spending notable sums each quarter. Due to bitcoin’s price records in that year, the firm’s investment turned highly successful, and at one point in November 2021, it was sitting on nearly $3.5 billion in unrealized profits.
While the crypto winter in 2022 halted the bitcoin forays of multiple entities, this was not the case with MicroStrategy. It bought over 8,200 BTC throughout last year, increasing its holdings even during the second quarter (which saw the LUNA/UST crash) and Q4 (when the collapse of FTX took place). Due to bitcoin’s declined price, MicroStrategy was sitting on a whopping $1.8 billion of unrealized loss by the end of 2022.
The trends changed with the start of 2023 as the crypto market showed some signs of recovery. Last month, the company’s BTC bet went in the green for the first time since June 2022 after the leading digital asset soared above $30K.
MicroStrategy acquired additional 7,500 BTC since the beginning of the year, rounding up the total holdings to 140,000 BTC.
The Positive Start of the Year
The increase of bitcoin’s value over the past several months has financially benefited MicroStrategy, allowing it to turn a profit during Q1. It registered a net income of $461 million, whereas the software business revenue exceeded the estimations. The development is partly due to tax benefits resulting from the firm’s BTC holdings.
The company also used bitcoin’s price surge to repay its $205 million loan to the failed Silvergate Bank at a 22% discount.
MicroStrategy, which is a publicly-listed firm – saw its shares rise during the first months of the year. MSTR stocks were worth approximately $145 on January 1, while currently, they hover around $318 (a 120% surge).
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MicroStrategy, a US-based software company, has been making headlines for its bullish Bitcoin investments for the past 11 consecutive quarters.
Since its first investment in August of 2020, the Nasdaq-listed firm has increased its Bitcoin holdings, purchasing a total of over 90,000 Bitcoin with a total value of over $3 billion. In a recent press release, MicroStrategy stated that it “plans to hold the cryptocurrency as a primary treasury reserve asset.”
The company’s bold foray into the world of cryptocurrencies has elicited both praise and criticism. Many supporters of cryptocurrency have lauded the move, citing it as an example of how institutional investors are gaining confidence in the digital asset. Meanwhile, some traditional investors are concerned that the company is exposing itself to too much risk by investing in a volatile asset.
Notwithstanding, MicroStrategy has seen its stock price more than quadruple since it started buying Bitcoin. With its latest announcement, the company made it clear that its primary goal is to maximize shareholder value and that it sees Bitcoin as a more attractive investment with more upside potential than holding cash.
Indeed, the firm’s interests appear to be aligned with that of the cryptocurrency market, at least for the foreseeable future. MicroStrategy has already announced plans to buy even more Bitcoin in the coming months, and with its commitment to cryptocurrency, it looks like the company has cemented its status as a major player in the digital currency world.