MicroStrategy continues to establish itself as a key player in the Bitcoin market, reinforcing its accumulation strategy despite the volatility of cryptocurrencies.
MicroStrategy was up to its old tricks again. The firm executed a major Bitcoin acquisition, consolidating its position as one of the largest institutional players in the cryptocurrency market. Despite the volatility that cryptocurrencies face due to macroeconomic factors and expectations surrounding the next monetary policy decision of the US Federal Reserve (FED), the company led by Michael Saylor took the opportunity to increase its BTC reserves.
On this occasion, MicroStrategy added 18,300 bitcoins to its balance sheet, a purchase valued at $1.1 billion, according to a report filed with the US Securities and Exchange Commission. A period spanning from August 6 to September 12.
Founded in 1989 as an enterprise software and cloud services company, MicroStrategy has made a strategic pivot towards Bitcoin since 2020. In that year, the company began investing aggressively in the cryptocurrency, moving away from cash as a store of value. This has transformed its financial profile, with shareholder value increasingly tied to Bitcoin’s performance, which has also positioned the company as a key player in the cryptocurrency network.
Bitcoin: MicroStrategy’s holding
With this latest purchase, MicroStrategy now has a total of 244,800 bitcoins, acquired at an average price of $38,585 per unit, representing a total expenditure of $9.45 billion. The company’s paper earnings currently exceed $4.7 billion, thanks to the appreciation of Bitcoin. According to MicroStrategy’s report, these recent purchases were funded with proceeds from the issuance and sale of shares.
The company has frequently turned to financing mechanisms such as the sale of shares and convertible notes to continue accumulating more Bitcoin. Earlier this year, it executed a sale of senior convertible notes worth $700 million to fund future acquisitions of the cryptocurrency.
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In terms of financial performance, the Bitcoin investment strategy has generated a return of 4.4% in the last quarter and 17% so far in 2024. MicroStrategy (MSTR) shares have seen a 90% increase over the same period, closing Thursday at $130.7 according to data from Google.
With Bitcoin trading around $58,000, MicroStrategy’s stash, which includes more than 244,000 bitcoins, is currently valued at more than $14 billion.
Meanwhile, the cryptocurrency market has been fluctuating in recent weeks, affected by expectations of a US interest rate cut and the recent monetary policy tightening by the European Central Bank, which briefly boosted the price of Bitcoin. Analysts predict further volatility for the cryptocurrency as the FED decision approaches, with bullish expectations for the end of 2024.
Source: Ambito
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