July 23, 2024

MicroStrategy Expands Bitcoin Holdings, Now Owning $11 Billion Worth of BTC

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MicroStrategy, a business intelligence firm turned Bitcoin advocate, has once again increased its Bitcoin holdings by acquiring an additional 3,000 bitcoins for $155 million between February 15 and February 25. This move brings the total Bitcoin ownership of MicroStrategy and its subsidiaries to approximately 193,000 bitcoins, with a market value of $11 billion.

Michael Saylor, the chairman and former CEO of MicroStrategy, celebrated the latest purchase on social media, highlighting the company’s average purchase price over time at $31,544. Despite the recent dip in Bitcoin’s price, currently trading just under $57,000, MicroStrategy’s bullish stance on the cryptocurrency seems unwavering.

The news of the acquisition propelled MicroStrategy’s shares, witnessing a 16% surge on Monday and an additional 10% increase on Tuesday, closing at $871.80. Although the company initially established itself in enterprise software and cloud-based services, its recent focus on Bitcoin has made it a unique investment opportunity in the eyes of many investors.

MicroStrategy’s commitment to Bitcoin became evident during its latest earnings call on February 7, where CFO Andrew King emphasized the company’s status as the “largest corporate holder of bitcoin in the world.” This strategic decision has turned MicroStrategy into a de facto proxy for Bitcoin, aligning its shareholder value closely with the cryptocurrency’s market performance.

Bitcoin’s resurgence, up about 35% this year, has been attributed to factors such as renewed investor interest following the SEC’s approval of multiple spot Bitcoin exchange-traded funds (ETFs) last month. The upcoming “halving” event in April, where Bitcoin’s production gets cut in half every four years, is also contributing to positive sentiment among traders.

MicroStrategy’s unique value proposition, according to Benchmark analysts, lies in its ability to acquire Bitcoin using proceeds from debt and equity issuances. Despite the availability of ETFs providing alternative ways for investors to access Bitcoin, MicroStrategy’s stock continues to stand out, offering investors a distinctive avenue to capitalize on the cryptocurrency market.

MicroStrategy, which announced its entry into Bitcoin investments in mid-2020, has seen a 33% increase in its stock value this year, pushing its market cap to nearly $15 billion.

Digital Assets Desk

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