important point
- MicroStrategy acquired an additional 301 Bitcoins at a purchase price of approximately $6 million, bringing its total holdings to approximately 130,000 Bitcoins.
- The latest purchase is significantly smaller than MicroStrategy’s previous Bitcoin bets.
- Macroeconomic conditions and concerns over Bitcoin’s underwater position may explain why MicroStrategy chose to buy relatively small amounts.
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The MicroStrategy co-founder announced today that the company has purchased an additional 301 bitcoins for around $6 million.
MicroStrategy Buys More Bitcoin
Michael Thaler is accumulating more of his favorite digital assets, but his latest investment has fallen short of his previous purchases.
Co-Founder of MicroStrategy gave to twitter On Tuesday, the company announced that it had purchased an additional 301 bitcoins for around $6 million. The average cost is $19,851 per coin. The latest purchase brings MicroStrategy’s total crypto holdings to approximately 130,000 bitcoins, worth approximately $4 billion.
Since August 2020, MicroStrategy has been an active investor in Bitcoin under the oversight of then-CEO Michael Saylor. After initially buying $250 million worth of Bitcoin, the company multiplied its investment several times as the top cryptocurrency hit new highs throughout 2021. Despite buying top cryptocurrencies at varying prices, the company is now under water. with that bitcoin. MicroStrategy’s current average purchase price is $30,639 per coin, while Bitcoin is trading at around $19,121 at the time of writing.
MicroStrategy started out as a business intelligence and mobile software company, but has become known for its bullish outlook on digital assets, especially Bitcoin. As such, many investors view the company’s stock as an easy-to-tradable proxy for cryptocurrencies.
MicroStrategy’s recent purchase shows that the company is still interested in getting more Bitcoin at a price below its cost base. However, there are some indications that Bitcoin bulls may be losing their appetite for top digital assets in the current economic climate.
Why is the company delaying purchases?
Today’s purchase is significantly less than Michael Saylor’s previous Bitcoin purchase for MicroStrategy. From February 15th to April 5th, the company bought over 4,000 of his Bitcoins for his $190 million. MicroStrategy also spent an additional $25 million in January 2021 and an additional $94.2 million in December 2021 on top cryptocurrencies. It is trading significantly higher.
A recent disclosure from MicroStrategy also suggests the company isn’t short on cash. Earlier this month, MicroStrategy filed with the SEC Selling up to $500 million in MSTR shares to fund “general corporate purposes, including the acquisition of Bitcoin.” Additional funds raised through a public offering may not have been credited to the company’s accounts. But given Thaler’s previously enthusiastic attitude toward buying Bitcoin, it’s likely that he’ll only be making a modest amount rather than waiting to reveal a larger purchase, as he did from February to April. It is rare to announce that you have purchased a
More sailor’s relegation His position as CEO of MicroStrategy may indicate an inside attitude towards his Bitcoin acquisition strategy. In August, Fong Lee, the former president of MicroStrategy, who successfully ran his business for the company’s software, stepped from Thaler to become his CEO.
The move to replace Thaler with someone more focused on MicroStrategy’s original mission could be a hedge against Bitcoin betting failing. Thaler still spearheads the company’s bitcoin acquisitions as chairman, but recent smaller acquisitions could be all the company wants him to allocate in the current economic climate. It’s also worth noting that the company posted a record loss of $1.5 billion in Bitcoin holdings. Whether or not Bitcoin will eventually outpace MicroStrategy’s cost base, the pressure to drown in such a big bet will undoubtedly be cause for concern among the company’s top brass.
It remains to be seen if MicroStrategy’s recent $6 million Bitcoin purchase is all the company wants to allocate or if there are more significant purchases in the pipeline. Still, with the global macroeconomic backdrop showing little near-term improvement, Thaler may have plenty of time to continue buying his favorite assets at lower prices.
Disclosure: At the time of writing this article, the author owned ETH, BTC, and several other cryptocurrencies.
