- MicroStrategy announced a change in its business strategy.
- Michael Saylor stated the company will become more BTC-friendly.
- MicroStrategy is up billions on its BTC buys.
Shockwaves rippled through the TradFi world in the summer of 2020 when Michael Saylor announced MicroStrategy had bought Bitcoin as an inflationary hedge and alternative to holding cash. Since then, MicroStrategy has made multiple large Bitcoin purchases to accumulate approximately $10 billion worth of coins, making the company the largest publicly listed holder of BTC.
Although MicroStrategy had built its reputation by providing analytics, mobility, and security software to corporations and government agencies over three decades, it recently announced a momentous pivot by rebranding to a Bitcoin development company. This change in focus has led to many questions, including whether the company intends to ditch its software business entirely.
MicroStrategy Steps Up Bitcoin Strategy
Saylor told Fox Business recently that the software business arm of MicroStrategy is “very healthy,” but the rationale behind the pivot to Bitcoin development was to utilize its sizeable BTC holdings and company resources to better “tap the capital markets” and acquire even more Bitcoin.
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“We can leverage our market cap in order to issue equity, issue debt, buy back our debt, we can restructure our capital structure so that our shareholders get more Bitcoin,” stated Saylor.
The MicroStrategy executive chair likened this strategy to developing real estate, saying the company is issuing securities to buy more Bitcoin. Saylor added that this pivot is also “to promote the Bitcoin network, lock up the Bitcoin forever, and build the entire ecosystem.”
BTC Strategy Pays Off
MicroStrategy has made 35 bulk Bitcoin purchases since first acquiring BTC in August 2020, accumulating 190,000 BTC valued at $9.9 billion at the current price.
Per the Michael Saylor Portfolio Tracker website, MicroStrategy’s average buy price is $31,465 per coin. With Bitcoin’s price around $52,100 at the time of writing, this translates to an unrealized profit of $20,635 per coin and over $3.92 billion in total unrealized gains.
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The company often purchased BTC following sharp price declines. While some critics argued that this investment strategy needlessly exposed shareholders to excessive volatility, X influencer “Johnny” noted that Saylor’s calls have paid off nicely as the market recovers from the drawn-out bear phase.
On the Flipside
- MicroStrategy‘s 190,000 BTC holdings dwarf the next biggest public company holder, Marathon Digital, which holds 15,741 BTC.
- MicroStrategy was already “tapping capital markets” before rebranding to a Bitcoin development company, such as borrowing from banks to fund its BTC purchases.
- MicroStrategy‘s (MSTR) share price grew 151% over the past year.
Why This Matters
MicroStrategy’s further embrace of Bitcoin signals a monumental bet on the future of digital currency. It is clear that Saylor sees no other path but to put it all on BTC. Developing the BTC network, by promoting it and building out the ecosystem, is a logical way to boost the company’s odds of success.
Read about Michael Saylor growing his personal Bitcoin stash here:
Michael Saylor Offloads MicroStrategy Shares to Buy Bitcoin
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