- MicroStrategy purchased 21,550 BTC for $2.1 billion, raising its total holdings to nearly $42 billion.
- The company’s average Bitcoin acquisition cost is $60,324, with a trading price of $98,258.
- Analysts highlight risks tied to heavy reliance on Bitcoin’s price appreciation.
MicroStrategy, a Virginia-based business intelligence firm and the largest corporate holder of Bitcoin has significantly deepened its bets on cryptos. In a Monday’s filing, the company revealed that it bought 21,550 BTC for 100,550 bitcoin at around $2.1 billion. This indicates that it has been purchasing Bitcoin for five consecutive weeks, establishing its assertive up-taking strategy.
The purchase brings MicroStrategy’s overall Bitcoin consolidated worth to around $41.7 billion, which is roughly 2% of the entire BTC circulating supply. Other expenses recorded include the cost of purchases, which for the period under review has averaged $60,324 per coin. The announcement of this purchase comes immediately after a $1.5 billion purchase made on December 2nd, showing constant investment in the cryptocurrency market.
Near Completion of Capital-Raising Goals
MicroStrategy’s ongoing Bitcoin acquisition aligns with its capital-raising initiatives. According to Vetle Lunde, head of research at K33 Research, the company has raised $11.09 billion through at-the-market (ATM) equity offerings, inching closer to its 2026 target of $12 billion.
This financial strategy has put the company at the forefront of corporate Bitcoin investments, with the CEO, Michael Saylor, advocating for increased use of Bitcoin. Saylor last suggested that the U.S. government must consider swapping fiat gold with bitcoins due to its long-term position.
Although these purchases increase MicroStrategy’s overall ownership of Bitcoins, they also make the company sensitive to market fluctuations. According to CoinGecko, Bitcoin is currently trading at $98,258, from which analysts derive information about the firm’s solvency.
Market Reaction and Analyst Concerns
Despite the ambitious purchases, MicroStrategy’s strategy has raised concerns among financial analysts. Min Jung, an analyst at Presto Research, noted that the company’s heavy reliance on Bitcoin price appreciation could pose risks if the cryptocurrency’s value declined significantly.
The market has responded differently to MicroStrategy’s latest acquisition. These sentiments have been evidenced by its shares, which fell 2.18% in pre-market trading. This dip highlights the delicate balance between the company’s aggressive investment strategy and market confidence.
MicroStrategy’s commitment to Bitcoin remains a defining feature of its business model. With substantial holdings and consistent acquisitions, the firm continues influencing corporate perspectives on cryptocurrency as a strategic asset. However, the volatility inherent to digital currencies underscores the challenges tied to such an aggressive approach.
