By
Bena Ilyas
June 27th, 2024
MicroStrategy’s latest Bitcoin purchase of 11,931 BTC signifies its unwavering commitment to Bitcoin as a primary asset.
In a significant move, Nasdaq-listed software firm MicroStrategy (MSTR), the largest corporate holder of Bitcoin (BTC), has announced the acquisition of an additional 11,931 BTC for $786 million, according to the press release on June 20, 2024.
Executive Chairman Michael Saylor has led MicroStrategy’s Bitcoin strategy since 2020. By the end of April, the company had 214,400 Bitcoins. With the new purchase, they now hold 226,331 Bitcoins, worth nearly $15 billion at Bitcoin’s current price of $66,000. On average, MicroStrategy bought these Bitcoins at $36,798 each, spending about $8.33 billion in total.
The company funded this purchase by offering institutional investors an $800 million convertible note. Initially, they planned to raise $500 million, then increased it to $700 million, and finally closed at $800 million. This mirrored their strategy in March when they added 9,245 BTC for $623 million after another debt issuance.
MicroStrategy’s Bold Bitcoin Strategy
Michael Saylor and MicroStrategy have been leading the charge to adopt Bitcoin as a reserve asset since 2020. This approach aims to encourage other corporate treasuries to follow suit. While several companies have incorporated Bitcoin into their balance sheets, MicroStrategy’s holdings and strategy are unparalleled.
One notable company emulating MicroStrategy’s approach is U.S.-listed Semler Scientific (SMLR). Over the past three weeks, Semler has not only added Bitcoin as a significant treasury asset but also pursued capital markets to acquire Bitcoin in amounts larger than its current market cap might suggest.
MicroStrategy’s shares have surged approximately tenfold since the firm began purchasing Bitcoin four years ago. In comparison, Semler’s shares have increased by more than 60% since it first disclosed its Bitcoin acquisitions in late May.
Market Reactions and Analyst Insights
Last week, brokerage firm Bernstein initiated coverage of MicroStrategy with an “outperform” rating and set a price target of $2,890 for the company’s shares. Currently, MicroStrategy shares are up 2% in premarket trading, priced at $1,507.
The implications of MicroStrategy’s strategy extend beyond the company itself. Their aggressive accumulation of Bitcoin has sparked discussions on the viability and risks of adopting cryptocurrency as a corporate reserve asset. Analysts continue to monitor how these decisions will impact the broader financial landscape and other companies’ approaches to cryptocurrency investment.
MicroStrategy’s latest Bitcoin purchase signifies its unwavering commitment to Bitcoin as a primary asset. The company’s bold strategy and substantial investments highlight a growing confidence in the long-term value and stability of Bitcoin, setting a precedent for other corporations to consider similar approaches in their financial strategies.