MicroStrategy’s Major Bitcoin Acquisition
MicroStrategy has made headlines once again by acquiring a substantial amount of Bitcoin (BTC). According to a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on December 2, the business intelligence company purchased 15,400 BTC for approximately $1.5 billion in cash. The average price paid per Bitcoin amounted to $95,976, which includes all associated fees and expenses.
This latest acquisition significantly boosts MicroStrategy’s return on Bitcoin investments, now standing at 38.7% for the quarter and 63.3% year-to-date. As of December 2, 2024, Michael Saylor, the company’s CEO, announced on Twitter that MicroStrategy now holds a total of 402,100 BTC, acquired at an aggregate cost of around $23.4 billion, resulting in an adjusted average price of $58,263 per Bitcoin.
Funding the Bitcoin Purchase
The recent Bitcoin purchase was financed through the sale of approximately 3.7 million Class A common shares, completed under a previously established sales agreement. Between November 25 and December 1, these share sales generated net proceeds of around $1.48 billion after accounting for sales commissions. This move is part of a larger strategy that allows MicroStrategy to issue and sell shares worth up to $21 billion in total.
The sales agreement, initiated on October 30 with TD Securities (USA) LLC and other financial agents, not only facilitated the current sale but also leaves MicroStrategy with around $11.3 billion in shares available for future transactions. This strategic funding approach highlights the company’s commitment to expanding its Bitcoin holdings while navigating potential market volatility.
MicroStrategy’s Vision for the Future
MicroStrategy’s determination to accumulate Bitcoin is evident as the company continues to utilize share sales to bolster its cryptocurrency investments. CEO Michael Saylor has been an outspoken advocate for Bitcoin, reinforcing MicroStrategy’s reputation as a key institutional holder in the cryptocurrency world. In a recent presentation, the firm described Bitcoin as “the highest performing uncorrelated asset that a corporation can hold on its balance sheet,” underscoring its commitment to this asset class.
Looking ahead, MicroStrategy envisions 2025 as the “year of the crypto renaissance.” This optimistic outlook is fueled by anticipated events such as the expected endorsement of Bitcoin exchange-traded funds (ETFs) by Wall Street, broader acceptance of fair value accounting for digital assets, and potential pro-Bitcoin positions from the next U.S. presidential administration. The company expects growing congressional support for cryptocurrencies, the establishment of a “Bitcoin Strategic Reserve,” and a clearer regulatory framework governing digital assets in the U.S.
The Stock Performance of MicroStrategy
MicroStrategy’s stock (MSTR) is intricately linked to the performance of Bitcoin, often experiencing more volatile fluctuations. This year, while Bitcoin prices have surged 150%, MSTR saw an impressive rise of 513%. The heightened volatility was especially pronounced in November, where MSTR gained 58%, outpacing Bitcoin’s own 37% increase for that month. As December unfolds, investors are eager to see how the quarter—and the year—will conclude for both Bitcoin and MicroStrategy.
Broader Adoption of Bitcoin by Companies
MicroStrategy’s bold moves are part of a larger trend, as an increasing number of companies are now turning to Bitcoin as a hedge against inflation. For instance, artificial intelligence firm Genius Group made headlines by purchasing 110 Bitcoin for $10 million on November 18, announcing plans to hold up to 90% of its reserves in Bitcoin moving forward.
Similarly, tech solution provider Semler Scientific ramped up its Bitcoin holdings to 1,570 BTC by acquiring 297 coins for $29.1 million between November 18 and 22, with an average purchase price of $75,039 per coin. Adding to this burgeoning trend, Japanese investment firm Metaplanet plans to raise over $62 million through a stock acquisition plan to expand its Bitcoin holdings, currently standing at 1,142 BTC.
As MicroStrategy and other companies continue to embrace Bitcoin, the landscape for institutional investment in cryptocurrencies is evolving, setting the stage for the anticipated crypto renaissance in the coming years.