MicroStrategy buys $95 million of bitcoin during price pullback

abdelaziz Fathi

MicroStrategy has purchased another $95 million of Bitcoin, adding to its massive cryptocurrency holdings during a sharp drop in the price.

MicroStrategy

According to an SEC filing, the Virginia-based business intelligence firm had added another 1,914 bitcoins to its strategic reserves between December 9 and December 29.

The latest purchase was made for around $94.2 million in cash at an average price of $49,229 per coin, inclusive of fees and expenses. It was financed with the proceeds generated from a sale of 167,759 MicroStrategy’s common stocks at an average price of $565.78 per share.

The analytics software maker, run by bitcoin bull Michael Saylor, has taken advantage of any price drop in Bitcoin to continue beefing up its investment in the world’s most-traded cryptocurrency.

With its most recent purchase, MicroStrategy holds an aggregate of 124,391 bitcoins, which were acquired at a total cost of around $3.7 billion and an average purchase price of approximately $30,159 apiece.

At the current price, Microstrategy’s bitcoins are worth more than $5.9 billion. For reference, MicroStrategy’s market cap stands at $6.1 billion as of Thursday, meaning the company places most of its net value in Bitcoin.

Saylor expects bitcoin price to reach $6 million

Microstrategy CEO highlighted the latest purchase of bitcoin a week after he outlined that the company is looking into opportunities to generate yield off of its enormous holdings. The potential options for such a strategy include opportunities to mortgage the cryptocurrency trove and generate long-term debt.

Saylor, who expects the price of bitcoin to hit $6 million, went on to say that Microstrategy could lend Bitcoin to a trusted counterparty and generate even more yield in the process. The executive also revealed that he personally owns 17,732 bitcoins, noting that the primary cryptocurrency is “unstoppable” and will replace gold. MicroStrategy CEO Saylor was said to be the one who convinced Elon Musk to move $1.5 billion dollars of Tesla’s funds into bitcoin.

As of the end of 2021’s third quarter, the world’s biggest corporate holder of bitcoin witnessed paper losses from holding digital assets on its books. However, this loss is something that has not yet been realized as it just reflects a depreciation in fair market value in excess of the book value.

Overall, the Virginia-based corporation reported a net loss of $36.1 million in Q3 2021, or $3.61 per share, compared to a $14.2  million loss a year earlier.

 

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