MicroStrategy Bolsters Bitcoin Holdings with 786 Million Purchase, Totalling Nearly 15 Billion

2024-07-03, 02:52

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## [TL; DR]
Between 27 April and 19 June MicroStrategy acquired 11,931 BTC to increase its holdings to 226,331.

Semler Scientific, Tesla and <a href="/price/tether-usdt" target="_blank" class="blog_inner_link">Tether</a> are examples of other corporate organizations that have added <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> to their financial reserves.

The U.S’ approval of spot bitcoin ETFs has influenced corporate organizations to buy and hold BTC.

## Introduction
The adoption of cryptocurrencies is set to increase as more companies and other [organizations are investing in digital assets](https://www.gate.io/blog_detail/1685/how-are-institutional-investors-participating-in-crypto "organizations are investing in digital assets"). Already, some private firms have acquired  cryptocurrencies which are becoming components of their reserves. MicroStrategy, Tesla and Tether are examples of firms that have added bitcoin to their reserves. Today, we focus on [MicroStrategy’s bitcoin acquisition strategy](https://www.gate.io/blog_detail/1595/microstrategy-btc "MicroStrategy’s bitcoin acquisition strategy") adopted in 2020.

## MicroStrategy's Bitcoin Acquisition: 11,931 BTC for $786 Million
On 20 June, MicroStrategy announced that it had acquired 11,931 bitcoins valued at around $786 million between 27 April and 19 June. The firm used funds raised through its Offering and Excess Cash to buy the cryptocurrency at an average price of $65,883, fees and related expenses included.
![](https://gimg2.gateimg.com/image/article/17199749081.jpg)
Source: x.com

By 20 June, MicroStrategy had purchased about 226,331 bitcoins at a total cost of approximately $8.33 billion and at an average price of $36,798 per coin. At the end of April, the company had a total bitcoin holdings of 226,331 worth around under $15 billion if priced at $66,000 each. The latest acquisition, masterminded by MicroStrategy's CEO, Michael Saylor, shows the company’s commitment to treating bitcoin as a reserve asset.

As expected, MicroStrategy’s shares (MSTR) responded positively to the news of its recent bitcoin acquisition. Thus, its value rose by 2% to $1,507. Historically, from the time the company first invested in bitcoin, about 4 years ago, its stock has been performing well. For example, since August 2020 the stock (MSTR) has had a 1,089% cumulative return. Thus, it has outperformed other leading stocks that include Nasdaq 100 (QQQ) and S&P 500 (SPY). Only NVDA, the AI favorite, has been outshining MSTR as its value has increased by 1,114% within the same period.

## MicroStrategy's Bitcoin Investment Strategy since 2020
In 2020, MicroStrategy made bitcoin investments one of its top priorities. Thus, it adopted the cryptocurrency as a reserve asset for its corporate treasury bitcoin. As of now, several firms have committed to investing in bitcoin. U.S.-listed Semler Scientific (SMLR), Tether Labs, and Tesla are examples of institutional investors in cryptocurrency with large corporate bitcoin holdings.

## MicroStrategy's fundraising efforts for Bitcoin Purchases
Now, let’s focus on how MicroStrategy sourced funds for its recent bitcoin acquisition. The company used the $800 million it raised through its convertible note offering to firms and other institutional investors. Although the offering's original value was $500 million, it was raised to $700 million before being closed at $800 million. In March, the firm also purchased 9,245 BTC after raising the required $623 million through debt issuance.

Through a press release MicroStrategy explained the terms and conditions of its recent debt issuance. [It stated](https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_06-14-2024 "It stated"): “MicroStrategy Incorporated today announced the pricing of its offering of $700 million aggregate principal amount of 2.25% convertible senior notes due 2032. The notes will be sold privately to persons reasonably believed to be qualified institutional buyers.”

It added, “The offering was upsized from the previously announced offering of $500 million aggregate principal amount of notes. The offering is expected to close on June 17, 2024, subject to satisfaction of customary closing conditions…The notes will mature on June 15, 2032, unless earlier repurchased, redeemed or converted in accordance with their terms.”

## The Crypto Market Analysis: BTC Market Impact of MicroStrategy Acquisition 
MicroStrategy’s [cryptocurrency investment strategy](https://www.gate.io/learn/articles/cryptocurrency-investment-guide-in-the-bear-market/1549 "cryptocurrency investment strategy") has a great BTC market impact. Its accumulation affects bitcoin’s price dynamics as it signals the rise in institutional adoption of the digital asset and other cryptocurrencies. MicroStrategy’s bitcoin adoption may lead to a rise in institutional investors in cryptocurrency which may lead to an increase in crypto adoption.

Read also: [8 Best Tips for Short term crypto Investment ](https://www.gate.io/blog_detail/1697 "8 Best Tips for Short term crypto Investment ")

However, some critics have raised concern due to crypto volatility risk which may affect MicroStrategy’s financial stability in the future if the value of bitcoin falls. Despite such fears other companies believe that it is worthwhile to invest in bitcoin. For example, Eric Semler, Semler Scientific’s chairman, who initiated his company’s bitcoin acquisition, has unwavering belief in the asset.  In a recent [press release he said](https://ir.semlerscientific.com/news-releases/news-release-details/semler-scientificr-announces-bitcoin-treasury-strategy#:~:text=%22Our%20bitcoin%20treasury%20strategy%20and,%241%20trillion%20of%20market%20value. "press release he said"), "Our bitcoin treasury strategy and purchase of bitcoin underscore our belief that bitcoin is a reliable store of value and a compelling investment.”

He added, “Bitcoin is now a major asset class with more than $1 trillion of market value. We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability.

“We also believe its digital, architectural resilience makes it preferable to gold, which has a market value of approximately 10 times that of bitcoin. Given the gap in value between gold and bitcoin, we believe that bitcoin has the potential to generate outsize returns as it gains increasing acceptance as digital gold.”

Many corporate organizations are willing to invest in bitcoin due to the United States SEC’s [approval of spot bitcoin ETFs](https://www.gate.io/blog_detail/3434/btc-etf-approval-catalysts "approval of spot bitcoin ETFs") in January. The approval of the ETFs acted as a seal of confidence in Bitcoin in particular and cryptocurrency in general. [Semler said](https://ir.semlerscientific.com/news-releases/news-release-details/semler-scientificr-announces-bitcoin-treasury-strategy#:~:text=%22Our%20bitcoin%20treasury%20strategy%20and,%241%20trillion%20of%20market%20value. "Semler said"), "Furthermore, we are energized by the growing global acceptance and 'institutionalization' of bitcoin -- reflected most recently by the Securities and Exchange Commission's [January 2024 approval of 11 bitcoin exchange-traded funds](https://www.gate.io/blog_detail/3707/bitcoin-etf-approval-analysts-weigh-in-on-implications "January 2024 approval of 11 bitcoin exchange-traded funds").”

## Conclusion
Between 27 April and 19 June MicroStrategy acquired 11,931 bitcoins valued at around $786.0 million. After that acquisition the company has over 226,331 BTC valued at around $15 billion. Semler Scientific, Tesla and Tether are other companies that have acquired much bitcoin. The U.S’ approval of spot bitcoin ETFs has motivated many corporate organizations to invest in bitcoin.

## FAQs about MicroStrategy Bitcoin
### How much did MicroStrategy lose on Bitcoin?
As of 1 May 2024 MicroStrategy had an impairment loss of $53 million. By that time it had 214,278 BTC. The company's loss at any time depends on the present value of bitcoin.
### Who owns the most bitcoin MicroStrategy?
In general terms, Satoshi Nakamoto owns the highest quantity of bitcoins since he/she holds 1.1 million BTC. However, among all public companies MicroStrategy owns the most bitcoin as it has 226,331 BTC.
### What did MicroStrategy do before bitcoin?
Before it ventured into Bitcoin MicroStrategy, it used to produce software for business intelligence and data mining. However, it has [diversified into bitcoin investment](https://www.gate.io/learn/articles/mitigating-risk-and-enhancing-returns-with-bitcoin/2438 "diversified into bitcoin investment") to preserve the value of its earnings.

<div class="blog-details-info">
<div>Author:* Mashell C.*, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>