Under the leadership of its founder and former CEO, Michael Saylor, U.S. business intelligence and software company MicroStrategy has made headlines in the financial world with its bold and consistent investment in Bitcoin. The firm’s strategy has been to channel significant portions of its cash flow into acquiring Bitcoin. This strategy has been particularly bold, given the volatile nature of the crypto market. But it seems to pay off!
The Largest Corporate Bitcoin Holder
MicroStrategy is the largest corporate holder of Bitcoins. As of November 29, 2023, the company had amassed a staggering total of 174,530 Bitcoins, acquired for approximately $5.28 billion at an average price of $30,252 per Bitcoin. This acquisition included an additional 16,130 BTC, purchased for around $593.3 million at an average price of $36,785 per Bitcoin. This aggressive Bitcoin acquisition strategy has paid off for the company, as MicroStrategy‘s Bitcoin investment, initially valued at $3.16 billion, surged in value to $6.7 billion, making it the largest Bitcoin holder among all public companies.
Despite facing criticism from various analysts, especially after the collapse of FTX and the subsequent downturn in the crypto market, Saylor’s strategy appears to be vindicated by the recent rebound in crypto prices. The concept of a ‘crypto winter,’ characterized by prolonged periods of stagnant or falling prices in the cryptocurrency market, has not deterred Saylor’s commitment to Bitcoin. His firm’s continued investment and the recent uptick in Bitcoin’s price suggest a potential payoff for this high-risk strategy.
Impressive MicroStrategy Numbers
Since Microstrategy adopted its bitcoin strategy in Aug 2020, its stock has surged by 321%. In the same period, Bitcoin rose by 221%, the S&P 500 experienced a 36% increase, and the Nasdaq Composite index saw a 30% rise. Meanwhile, gold declined by 2%, silver fell by 16%, and bonds dropped by 22%.
Moreover, the anticipated ‘halving’ event in the Bitcoin blockchain, typically occurring every four years, could further validate MicroStrategy‘s strategy. Halving refers to the reduction in the number of Bitcoins awarded to miners for verifying transactions, which historically has led to an increase in Bitcoin’s price due to the reduced rate of new Bitcoin creation and, hence, a lower supply in the market.
As the fourth Bitcoin halving quickly approaches and the first spot Bitcoin ETF approval by the SEC seems imminent, the bold Bitcoin investment strategy may prove to be prescient despite facing skepticism during market downturns.
