MicroStrategy Adds 15,350 BTC As Holdings Hits 439,000 BTC

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As a seasoned investor with over two decades of experience in the stock market, I find MicroStrategy’s Bitcoin strategy fascinating and bold. Having witnessed the dot-com bubble, the 2008 financial crisis, and the rise of cryptocurrencies, I have learned to appreciate companies that think outside the box and are not afraid to take calculated risks.

Once more, MicroStrategy Inc., an American business intelligence and software company listed on NASDAQ (MSTR), is drawing attention due to its substantial Bitcoin (BTC) investments. Lately, the firm has added 15,350 more BTC to its holdings at approximately $1.54 billion, setting a new peak in its acquisition series.

This transaction solidified their status as one of the top corporate entities with significant Bitcoin holdings. This acquisition is part of a string of substantial Bitcoin investments, showcasing the company’s steadfast dedication to its long-term strategic plans.

MicroStrategy on A Mission to Expand its Bitcoin Hoard

MicroStrategy recently finalized a deal to acquire Bitcoins, with the transaction taking place between December 9th and 15th. The average price they paid per Bitcoin was approximately $100,386.

Acquiring more Bitcoin has boosted the company’s Bitcoin reserves to a massive 439,000 coins, worth over $45 billion in today’s market. The total expense for these Bitcoins amounts to approximately $27.1 billion, with each Bitcoin being purchased at an average price of about $61,725.

As an analyst, I’m sharing an update on MicroStrategy’s Bitcoin holdings. We recently purchased 15,350 Bitcoins for approximately $1.5 billion, which equates to around $100,386 per Bitcoin. This acquisition has boosted our Quarter-to-Date (QTD) Bitcoin Yield to 46.4% and Year-to-Date (YTD) yield to 72.4%.

— Michael Saylor⚡️ (@saylor) December 16, 2024

What sets this purchase apart is not just its size. It hinges on the fact that the company has now made six consecutive weeks of Bitcoin acquisitions. This is considered a positive bet, with the price of Bitcoin recently reaching an all-time high of $106,352.

As an analyst, I find it noteworthy that MicroStrategy’s Bitcoin holdings currently account for approximately 2.1% of the total 21 million Bitcoin supply. Through strategic use of both stocks and debt, MicroStrategy has been accumulating these digital assets over time.

The business frequently acquires capital by offering and selling its stocks, as well as convertible senior notes in a private transaction. As of December 15, it had approximately $7.65 billion worth of shares remaining for sale, which is part of an ambitious strategy to raise a total of $42 billion. This method is one of MicroStrategy’s strategies to continue expanding its Bitcoin portfolio.

Despite investor concerns regarding MicroStrategy’s use of debt and stock sales for Bitcoin purchases, analysts at Bernstein remain confident in the firm’s capacity to maintain its aggressive acquisition strategy.

It appears that their perspective indicates a balance for MicroStrategy’s worth as Bitcoin’s price rises. Adopting this approach could help the company effectively handle its debt and potentially secure additional funds.

The Market’s Reaction

It appears that MicroStrategy’s approach has been well-received by the market, as evident by the significant surge in its stock price – a staggering 490% increase since 2024. The main driving force behind this impressive growth is MicroStrategy’s Bitcoin strategy. Furthermore, MicroStrategy’s inclusion in the Nasdaq-100 index has further fueled this positive momentum. Consequently, there is a higher likelihood that more institutional investors will purchase shares of MicroStrategy.

Analysts believe the company might draw in at least $2.1 billion from exchange-traded funds (ETFs) that follow the index, suggesting active buying interest. This could potentially pave the way for MicroStrategy to become part of the S&P 500 Index in the future. If successful, it may enhance its standing in the market.

Despite the fact that the company’s software division isn’t consistently turning a profit at present, this presents a significant hurdle. On the other hand, altering the valuation method of Bitcoin by 2025 could potentially boost the company’s financial health and make it a candidate for inclusion in the S&P 500.

MicroStrategy’s strategic Bitcoin purchases are geared towards long-term growth rather than short-term gains. The firm anticipates that Bitcoin could surpass the value of conventional assets such as gold, potentially reaching a value of over $1 million per coin.

Despite some investors expressing reservations about this daring strategy, MicroStrategy’s management remains resolute in their decision to continue holding onto Bitcoin until they achieve their objective.

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2024-12-16 18:39