MicroStrategy sets new record with another $5.4B Bitcoin purchase

MicroStrategy is now sitting on 55,000 more Bitcoin after spending an additional $5.4 billion on the cryptocurrency. With the purchase, the company’s Bitcoin reserves total 386,700 BTC.

According to a filing released on November 25, Bitcoin was trading at an average price of $97,862 between November 18 and 24, and the acquisition was conducted during that period.

Year to date, $MSTR‘s treasury operations delivered a BTC Yield of 59.3%, providing a net benefit of ~112,125 BTC to our shareholders, or ~341 BTC per day. At $100K per BTC, that would equate to $11.2 billion for the year so far, or $34.1 million per day.

— Michael Saylor (@saylor) November 25, 2024

MicroStrategy used proceeds from recent equity and debt offerings to finance this large purchase. These consist of a private offering of 0% convertible senior notes due in 2029 and an ongoing at-the-market (ATM) equity program.

The offering of notes closed on November 21 and raised $2.97 billion. Moreover, using its ATM program, the company generated net funds from sales of 5,597,849 shares totaling $2.46 billion.

The overall Bitcoin purchases made by MicroStrategy come to $21.9B

With an average price of $56,761 for each BTC, this latest buy increases MicroStrategy’s cumulative Bitcoin purchase to $21.9 billion. Its build-up of Bitcoin close to its peak price points to great faith in the future worth of the asset.

In its Form 8-K disclosure, MicroStrategy presented a proprietary metric known as “Bitcoin Yield.” This performance indicator is calculated as the percent change in ounces of Bitcoin held to the assumed number of diluted outstanding shares. From 35.2%, the corporation claims its Bitcoin Yield is currently 59.3%.

Likewise, between November 18 and 22 Semler Scientific, a U.S. healthcare corporation, bought 297 Bitcoin (BTC) for $29.1 million. Semler now owns 1,570 Bitcoin overall after making this purchase at an average price of $75,039 per coin.

Semler Scientific also expanded its ATM equity program by an additional $50 million, more than doubling its offering capacity to $100 million. Gross proceeds from the program have already raised $50 million for the firm. According to Semler, the Bitcoin Yield stands at 58.4% as a result of the company’s strategy of deploying Bitcoin as a main treasury asset.

Ownership of a huge supply of Bitcoin may compromise its decentralized nature

Bitcoin is fundamentally decentralized. This core aspect, however, is challenged when there are large holders like MicroStrategy end up owning such a high percentage of the supply. Such a significant concentration makes one feel that the Bitcoin works are becoming centralized. As the supply becomes concentrated in the hands of one entity, it brings imbalances in the market and increases the chance of manipulation.

The extent of such accumulation at current prices is reason to seriously start considering the direction Bitcoin prices might take into the future. Are we almost at a peak and going to start declining, or is there room for it to climb higher?