MicroStrategy is unrelenting with its Bitcoin purchases as it recently spend more than $29 million on over 1,000 BTC.
MicroStrategy (NASDAQ: MSTR) has continued amassing more Bitcoin and has purchased an additional 1,045 BTC. The business intelligence firm announced it spent $29.3 million on the recent purchase, at an average of $28,016 per Bitcoin. According to a tweet from co-founder and executive chairman Michael Saylor, MicroStrategy’s portfolio now has 140,000 Bitcoins. The company spent a total of $4.17 billion at an average of $29,803 per coin.
The American intelligence company has been buying Bitcoin for a few years. Its first purchase was in August 2020, when it spent about $250 million on 21,000 Bitcoins. At the time, Microstrategy made headlines as one of the first public companies to keep crypto as a store of value after transferring funds from its treasury.
MicroStrategy Bought More Bitcoin Last Week, Paid Off Silvergate Loan
In March, MicroStrategy announced that it bought 6,455 Bitcoins, spending $150 million on the transaction. The company said it bought the Bitcoins at an average of $23,238 per coin over five weeks. At the time, the company had a total portfolio of nearly 139,000 Bitcoins.
In addition to buying more Bitcoin, MicroStrategy announced that it prepaid the loan from the collapsed crypto-focused Silvergate Bank. According to an SEC filing, the company paid a total of $161 million of the $205 million loan. After the payment, MicroStrategy received 34,619 Bitcoins held as collateral for the transaction initiated in March last year. The intelligence firm confirmed it paid the loan after raising $339.4 million from selling MSTR shares.
MicroStrategy decided to repay the loan even though payment was not due until Q1 2025. According to the company, no BTC was custodied with Silvergate, even though the loan used Bitcoin as collateral. This assured MicroStrategy shareholders that even through Silvergate’s bankruptcy, MicroStrategy’s Bitcoin collateral was safe. The firm also allayed fears in a March tweet, saying that apart from the loan, both companies have “no other financial relationship”.
MicroStrategy and Bitcoin
MicroStrategy has been bullish about Bitcoin for a long time. The company has continued purchasing the king coin even during biting bear markets. However, MicroStrategy recently suffered a slight loss after selling some of its Bitcoin.
In December, MSTR hit its lowest level since August 2020 after a Bitcoin sale. This first-ever sale saw MicroStrategy offload 704 Bitcoins for about $11.8 million. The company said it sold the Bitcoin for tax reasons and confirmed it bought another 810 Bitcoins two days after. However, MSTR fell 1.1% and hit $136.63 following the announcement. At the time, the stock was at a 75% year-to-date (YTD) plunge.
MicroStrategy’s continuous Bitcoin purchases have worried several investors. According to Matt Maley, the chief market strategist at Miller Tabak + Co, some investors are jittery. Maley said investors had hoped MicroStrategy would “scale back their holdings” following Salor’s decision to leave the CEO position.
According to a Jefferies analyst, Brent Thill, MicroStrategy may face some problems soon. Thill has said that the company could soon struggle with liquidity because its current position has too much leverage for Bitcoin.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.