- MicroStrategy announced on Monday that it had added an additional $155 million worth of Bitcoin to its balance sheet.
- Shares in the company, which serves as an alternative investment vehicle to Bitcoin, soared 10% on Tuesday after rising further the previous day.
- MicroStrategy's Bitcoin holdings are currently worth $11 billion.
MicroStrategy CEO Michael Saylor speaks at the Bitcoin 2021 Convention, a cryptocurrency conference, held at the Mana Convention Center in Wynwood, Miami, Florida on June 4, 2021.
Joe Radle | Getty Images
MicroStrategy's HODL strategy continues to deliver returns for investors.
The company announced on Monday that it acquired an additional 3,000 Bitcoins between February 15th and February 25th for a total of $155 million. MicroStrategy, along with its subsidiaries, currently holds approximately 193,000 Bitcoins worth $11 billion.
Michael Saylor, the company's chairman and former CEO, and one of the leading evangelists of cryptocurrencies, said: was popular The most recent purchase on the X post states that MicroStrategy's long-term average purchase price is $31,544. As of Tuesday, Bitcoin was trading at just under $57,000.
MicroStrategy stock rose 16% on Monday and another 10% on Tuesday, closing at $871.80.
Founded in 1989, MicroStategy operates in enterprise software and cloud-based services, but its shareholder value is tied almost entirely to its ownership of Bitcoin, effectively making the company a leader in the world's largest cryptocurrency. It is an agency.
In MicroStrategy's latest earnings call on February 7, Chief Financial Officer (CFO) Andrew King said that the company is “the world's largest Bitcoin holding company, and we have the highest conviction to acquire Bitcoin.” “We continue to work on our strategy.”
Bitcoin has risen about 35% this year, hitting its highest level since December 2021. Ether, the next largest cryptocurrency, has risen 42% in 2024, reaching about $3,250 on Tuesday.
Investors are becoming increasingly bullish on Bitcoin trading after the SEC approved several spot Bitcoin exchange-traded funds last month. Bitcoin is up 24% since the new ETFs began trading on January 11, and these funds have brought in billions of dollars in inflows.
“The demand that ETFs are driving into the Bitcoin spot market significantly exceeds the amount of new supply created each day,” said Ryan Rasmussen, an analyst at Bitwise Asset Management. “Institutional investors have not caught up with Bitcoin ETFs yet. We expect much more demand is still under the surface and not yet seen.”
Also boosting trader sentiment is the “halving” event, which is held every four years, with the next scheduled for April. At that point, Bitcoin production will be cut in half. This is a process aimed at reducing the rate at which new coins enter the network.
The first three halvings (2012, 2016, and 2020) were all tied to a bull market in Bitcoin prices. Research firm Benchmark said in a note on Tuesday that the most recent halving in May 2020 “occurred before Bitcoin’s dramatic rise in 2021 from $8,572 to an all-time high of $67,566.”
MicroStrategy announced plans to invest in Bitcoin in mid-2020, saying in an earnings call that it would invest $200 million in the next 12 months in “one or more alternative assets,” which could include digital currencies like Bitcoin. He announced that he would invest $50 million. The company's market capitalization at the time was approximately $1.1 billion.
In the fourth quarter of 2023, the company's Bitcoin holdings recorded the largest single quarterly increase since the end of 2020. Meanwhile, the company's software and services business generated approximately $124.5 million in revenue in the fourth quarter.
The company is up 33% since the beginning of the year, pushing its market cap to nearly $15 billion.
Benchmark wrote in its report that even though ETFs provide investors with access to Bitcoin, MicroStrategy's stock “continues to offer investors a unique value proposition.” ing. For example, MicroStrategy has the ability to acquire Bitcoin using proceeds from bond and stock issuances, the company said.
Analysts at TD Cowen wrote in a note Tuesday that they expect bitcoin trading “to prove beneficial to shareholders over time.”
“MicroStrategy represents a new breed of companies that generate dollar-based cash flows from enterprise software and cloud services while converting that excess cash flow into Bitcoin on an effective leveraged basis,” TD Cowen analysts said. writing. “What began as a defensive strategy to protect the value of accumulated assets has become an opportunistic strategy aimed at accelerating shareholder value creation.”
— CNBC's Dylan Butts and Ari Levy contributed to this report.
