MicroStrategy has substantially increased its Bitcoin reserves. Following the completion of its senior convertible notes offering, the company announced the acquisition of an additional 9,245 Bitcoin (BTC).
This purchase propelled MicroStrategy’s total holdings to a staggering 214,246 BTC, valued at $7.53 billion. It marks a significant milestone, positioning the firm as a dominant player with over 1% of the finite 21 million Bitcoin supply.
SponsoredMicroStrategy Among Biggest Bitcoin Holders
Michael Saylor, the founder and executive chairman of MicroStrategy, highlighted the firm’s relentless pursuit of Bitcoin accumulation. The latest acquisition, costing $623 million, showcases the company’s strategic investment at an average price of $67,382 per BTC.
This move follows the successful $603 million offering of senior convertible notes due 2031, aimed at bolstering Bitcoin reserves. The net proceeds from this sale were approximately $592.3 million, factoring in discounts, commissions, and estimated offering expenses.
Prior to this, MicroStrategy’s Bitcoin portfolio stood at 205,000 BTC. The company’s aggressive investment strategy briefly positioned it ahead of BlackRock’s spot Bitcoin exchange-traded fund (ETF), IBIT, in terms of holdings, overtaking even the asset management titan.
Despite the significant Bitcoin purchase, MicroStrategy’s shares dipped by 5.7% on March 19 amidst a broader decline in the cryptocurrency market. This pullback follows an 18% price correction in Bitcoin, which dropped from $74,000 to $60,800.
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Despite the decrease in Bitcoin’s value, analysts remain optimistic about its long-term potential, though concerns about MicroStrategy’s debt-funded approach have been raised. Analysts from JPMorgan caution against the risks of leveraging in the crypto rally, suggesting that it could exacerbate potential downturns.
“We believe debt-funded Bitcoin purchases by MicroStrategy add leverage and froth to the current crypto rally and raise the risk of more severe deleveraging in a potential downturn in the future,” analysts led by Nikolaos Panigirtzoglou wrote
Nonetheless, MicroStrategy’s strategy, led by Saylor’s vision, remains unwavering. The firm aims to leverage cheap capital to maximize its Bitcoin acquisitions, viewing the digital asset as the ultimate investment.
