MicroStrategy has proved it is not slowing down anytime soon when it comes to buying bitcoin. Not long after news broke that the firm had taken a $200 million loan to purchase bitcoin, it has made its first announcement that it has purchased BTC presumably using the loan it had secured earlier. This latest purchase is one in a long line of purchases that have been going on for more than a year, putting the company firmly in the lead with its BTC holdings.
MicroStrategy Buys 4,167 BTC
In a recent tweet, CEO of MicroStrategy Michael Saylor made the company’s bitcoin purchase public. The tweet explained that the purchase had been made as of Sunday, 4th, April, and had added another 4,167 BTC to its holdings. In total, MicroStrategy had purchased approximately $190.5 million worth of BTC at the time, coming out to an average of $45,714 for each BTC.
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This purchase had bumped up the holdings of the firm once more. Already the publicly traded company with the largest bitcoin holdings, MicroStrategy now holds about 129,218 BTC in total. These BTC have been purchased for around $3.97 billion, putting the average price of each bitcoin at $30,700 apiece. This means that the company remains firmly in profit from its bitcoin holdings making this a good play for MicroStrategy over time.
MacroStrategy has purchased an additional 4,167 bitcoins for ~$190.5 million at an average price of ~$45,714 per #bitcoin. As of 4/4/22 MicroStrategy #hodls ~129,218 bitcoins acquired for ~$3.97 billion at an average price of ~$30,700 per bitcoin. $MSTRhttps://t.co/Z45OuJU5KI
— Michael Saylor
(@saylor) April 5, 2022
At current prices, the total value of the MicroStrategy BTC holdings stands at a little over $5.8 billion. This puts the firm in profit to the tune of about $2 billion total. Additionally, the company now holds 0.615% of the total BTC supply.
Why Hold Bitcoin?
MicroStrategy’s Bitcoin strategy has been a winning strategy for the company. Putting bitcoin on its balance sheet has been profitable so far even through the dips. It has far outperformed leading stocks in the finance market, returning gains at an accelerated rate.
BTC falls to $44,000 | Source: BTCUSD on TradingView.com
For MicroStrategy, its decision to purchase bitcoin has been no doubt good for its stock. Since the company holds a large amount of debt-financed BTC, it has made its share price closely correlated with the digital asset’s price. This means that with BTC in profit, the MicroStrategy stock tends to do well.
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MicroStrategy is not the only publicly-traded company to own bitcoin though. Others like Tesla, Square Inc, and Galaxy Digital all own bitcoin. It is fast becoming an asset that companies want to put on their balance sheets.
Featured image from CryptoSlate, chart from TradingView.com