Nasdaq-listed business intelligence company MicroStrategy has witnessed a remarkable surge in the value of its substantial Bitcoin holdings in the current year, accumulating over $500 million in unrealized gains on the cryptocurrency.
The company’s strategic investment in Bitcoin has established it as the world’s largest corporate holder of digital assets, with a total of 189,150 BTC now valued at approximately $8.55 billion.
MicroStrategy’s profitable Bitcoin strategy
MicroStrategy’s journey into Bitcoin investment began in August 2020 when the cryptocurrency was trading slightly above the $10,000 mark. At that time, the company made its initial purchase of 21,454 BTC, marking the commencement of its crypto treasury.
Since then, MicroStrategy has continued to accumulate Bitcoin, resulting in an average investment cost per BTC of approximately $31,165.
Recently, the company added an additional 14,620 BTC to its impressive stash, spending around $615.7 million at an average price of $42,110 per coin.
This significant investment now accounts for about 0.9% of the total supply of Bitcoin.
Michael Saylor’s Personal Bitcoin Holdings
Michael Saylor, the CEO of MicroStrategy, has also been an active participant in the Bitcoin market, personally owning more than 17,000 BTC. Following a recent sale of his company options for $216 million, Saylor has announced his plans to further increase his Bitcoin holdings, highlighting his unwavering confidence in the cryptocurrency’s future.
Saylor has been a prominent advocate for Bitcoin and has even broken down the recent digital currency rally in an interview on CNBC’s “Closing Bell: Overtime.” He attributes Bitcoin’s recent surge to the digital transformation of capital, emphasizing its growing acceptance as a store of value and a hedge against inflation.
MicroStrategy’s financing approach
MicroStrategy’s approach to financing its Bitcoin purchases has attracted attention as well. The company has been generating capital for its cryptocurrency acquisitions by issuing new shares in the market, diluting existing shareholders’ ownership, and utilizing the funds raised to acquire more Bitcoin.
According to Adam Back, the founder and CEO of Blockstream, MicroStrategy’s BTC per share ratio has increased, resulting in an “anti-dilutive” effect for shareholders, with an approximate 1.4% improvement in Bitcoin per share.
The company initially purchased 174,530 BTC with a shareholder base of 15.64 million shares to break it down further. Subsequently, MicroStrategy issued an additional 1.077 million new shares, generating $610 million in proceeds, which were used to acquire $617 million worth of Bitcoin.
This strategic move raised the company’s BTC per share from 0.011159 BTC to 0.011313 BTC per share.