MicroStrategy, a leading business intelligence firm, has once again made waves with its significant Bitcoin acquisition. Between August 6 and September 12, the company purchased around 18,300 Bitcoin, bringing its total holdings to approximately 244,800 BTC. This move reinforces MicroStrategy’s status as a major corporate Bitcoin holder, continuing its strategy from 2020.
$1.11 Billion Bitcoin Purchase Funded by Share Sale
The acquisition, valued at $1.11 billion, was made at an average price of $60,408 per Bitcoin, including all associated fees. To fund this latest purchase, MicroStrategy sold over eight million company shares through a sales agreement finalized on August 1. By September 12, the company had raised the necessary $1.11 billion, according to a filing with the U.S. Securities and Exchange Commission (SEC). The capital was immediately funnelled into increasing its Bitcoin portfolio.
MicroStrategy’s Growing BTC Holdings
This latest purchase boosts MicroStrategy’s total Bitcoin holdings to around $14.14 billion, up from $13.77 billion in early August. The company’s average purchase price since it began acquiring Bitcoin in 2020 stands at $38,585 per BTC, with a total investment of approximately $9.45 billion. Under the leadership of Michael Saylor, MicroStrategy first ventured into Bitcoin in August 2020 and has aggressively expanded its holdings since then.
MicroStrategy’s Bitcoin strategy has sparked mixed reactions, with analysts divided into its risks and rewards. Despite the controversy, the firm has continued to buy, demonstrating confidence in the long-term potential of the digital asset.
Beating the S&P 500 and Warren Buffet’s Warnings
By August 10, 2024, MicroStrategy held 226,500 BTC in reserves, which at the time was worth $13.77 billion. The company’s average acquisition price stood at $37,000 per Bitcoin, yielding over $5.39 billion in unrealized profits. Notably, the company has outperformed the S&P 500 (SPX) index since its initial Bitcoin purchase, with its stock price skyrocketing by 1,000%. This performance has also beaten the returns of the SPX over the same period by a factor of 16.25.
While Warren Buffet once warned against Bitcoin, labelling it as a speculative asset, MicroStrategy’s significant unrealized gains appear to challenge that outlook. The firm’s strategy has proven profitable thus far, and it shows no signs of slowing down as it continues to bet heavily on Bitcoin’s future.