In summary
- MicroStrategy purchased 5,200 BTC for $561 million, bringing its holdings to 444,262 BTC.
- The company debuted on the Nasdaq-100 index on the same day as the acquisition.
- Its shares fell 6% after Bitcoin fell to $93,700.
MicroStrategy revealed a $561 million Bitcoin purchase on Monday, replenishing its corporate coffers using proceeds from stock sales as the company’s stock debuted on the Nasdaq 100 index.
After selling 1.3 million shares over the past week, MicroStrategy reported that it used the proceeds to expand its Bitcoin holdings by 5,200 BTC, according to a filing with the U.S. Securities and Exchange Commission (SEC).
The company, which calls itself a Bitcoin development company, now owns 444,262 BTC, valued at $42 billion at the time of writing. Since the Tyson, Virginia-based firm began accumulating Bitcoin in 2020, it has become the largest corporate holder of the asset and established a model that many other companies have begun to follow.
MicroStrategy’s latest acquisition represented the seventh consecutive Monday that the firm indicated it had purchased Bitcoin, totaling 192,000 BTC since Nov. 11, according to Saylor Tracker. That sum was valued at approximately $18 billion at the time of this writing.
While MicroStrategy has been acquiring Bitcoin for quite some time, Monday’s announcement came at a historic moment for the company, founded in 1985. Spanning the top 100 non-financial companies listed on the Nasdaq stock index, such as Apple and Nvidia, MicroStrategy was added to the Nasdaq-100 index earlier this month.
MicroStrategy shares officially began trading as part of the index on Monday.
Michael Saylor, co-founder and CEO of MicroStrategy, wrote on X (formerly known as Twitter) on Monday that the firm’s latest purchase was made at an average cost of approximately $106,600 per Bitcoin. When the firm embarked on its Bitcoin buying spree after Election Day, it started by paying around $74,400 per Bitcoin.
MicroStrategy’s inclusion in the benchmark index was widely praised by Bitcoin enthusiasts, but Bloomberg ETF analyst James Seyffart previously said the stock’s inclusion could have significant implications. Earlier this month, he wrote in a research note that the change could result in the net purchase of at least “$2.1 billion in shares by ETFs.”
Juan Leon, senior investment strategist at Bitwise, told Decrypt that flows from passive and active managers could boost MicroStrategy’s trading volume, causing it to trade 20% to 40% higher on any given day.
“That would have a substantial impact on the price,” he said, positing that the stock could have 50% or more upside potential on days with positive flows, now that it is included in the Nasdaq-100 benchmark index.
The price of Bitcoin hit an all-time high of $108,000 last week, but has since fallen to $93,700 following restrictive comments from the Federal Reserve. The US central bank, taking a cautious tone on inflation, said it would reduce interest rates at a slower pace next year.
When Bitcoin was hovering around its record price, Saylor compared Bitcoin to Manhattan real estate, adding that the company “will continue to buy at highs forever.”
Using convertible notes, the company has been able to effectively purchase Bitcoin with leverage. However, analysts have noted that MicroStrategy’s strategy is not without risk, focusing on the considerable premium at which MicroStrategy shares trade compared to its Bitcoin holdings.
As Bitcoin has fallen below the $100,000 mark, MicroStrategy’s stock price has also fallen. Shortly after Monday’s opening bell, MicroStrategy shares were trading down 6% at $342, marking a 17% drop over the past week.
Edited by Andrew Hayward
Editor’s note: This story was updated after publication to include an analyst comment.
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