In a bold move highlighting its confidence in the future of cryptocurrency, MicroStrategy has once again increased its Bitcoin holdings, acquiring an additional 12,000 tokens for a staggering $821 million. With this latest purchase, the technology company’s total balance of Bitcoin now stands at an impressive 205,000 BTC.
The announcement, made by MicroStrategy’s founder and executive chairman Michael Saylor, underscores the company’s commitment to Bitcoin as a long-term investment strategy. This move comes shortly after the disclosure of their intention to invest $600 million, sourced from the sale of convertible notes, into acquiring more Bitcoin.
For those unfamiliar with convertible notes, these financial instruments serve as a means for companies to raise funds by offering convertible debt that can be converted into company stock at a later date.
The recent acquisition of Bitcoin took place between February 26 and March 10, 2024, with a substantial cash outlay of $821.7 million. A significant portion of the funding for this purchase, totaling $781.1 million, was derived from a private offering of convertible senior notes. Additionally, MicroStrategy utilized $40.6 million from its excess cash reserves to bolster its Bitcoin holdings.
MicroStrategy’s strategic accumulation of Bitcoin positions the company as a major player in the cryptocurrency space. With a total of 205,000 BTC now in its possession, MicroStrategy is on the brink of holding 1% of the total Bitcoin supply, with only 5,000 BTC needed to achieve this milestone. Remarkably, the company has acquired its substantial Bitcoin holdings at an average price of approximately $33,706 per Bitcoin, amounting to a total investment of $6.91 billion.
The current value of MicroStrategy’s Bitcoin holdings stands at an impressive $14.6 billion, marking an unrealized profit of $7.69 billion. Notably, this latest buying spree commenced on the same day MicroStrategy announced its previous purchase, underscoring the company’s confidence in Bitcoin’s long-term value proposition.
In an interview with CNBC, Michael Saylor expressed his belief that Bitcoin is poised to “eat” gold, citing its superior attributes compared to the traditional precious metal. According to Saylor, Bitcoin possesses all the positive aspects of gold while mitigating its downsides. He further argued that Bitcoin would attract capital away from other risk assets and traditional risk ETFs, potentially finding its way into multiple funds such as the BlackRock Global Opportunities Fund.
Saylor also highlighted the upcoming halving event, scheduled for next month, emphasizing the supply-demand imbalance that is expected to drive Bitcoin’s price higher. In his view, Bitcoin’s price will need to adjust upwards to accommodate the surging demand and limited supply, further solidifying its position as a lucrative investment opportunity in the eyes of institutional investors and corporations alike.