MicroStrategy Expands Bitcoin Holdings with $1.1 Billion Purchase, Now Owns Over 1% of Total Supply
MicroStrategy, the business intelligence firm known for its aggressive Bitcoin acquisition strategy, has made its largest cryptocurrency purchase since 2021. The company announced on Friday that it had acquired approximately 18,300 Bitcoin (BTC) between August 6 and September 12, 2024, for a total of $1.11 billion.
This latest acquisition brings MicroStrategy’s total Bitcoin holdings to 244,800 BTC, valued at approximately $14.14 billion at current market prices. The company now controls over 1% of Bitcoin’s fixed supply of 21 million coins, cementing its position as the largest corporate holder of the cryptocurrency.
Michael Saylor, MicroStrategy’s founder and executive chairman, revealed that the average purchase price for this recent acquisition was $60,408 per Bitcoin, including fees and expenses. Despite the purchase price being slightly higher than the current market value, MicroStrategy’s overall Bitcoin investment remains profitable. The company’s cumulative Bitcoin holdings were acquired at an average price of $38,585 per coin, representing a total investment of around $9.45 billion.
The funds for this substantial purchase were raised through the sale of company shares. MicroStrategy sold an aggregate of 8,048,449 shares under a sales agreement established on August 1, generating approximately $1.11 billion. This move aligns with the company’s strategy of using share sales to finance its ongoing Bitcoin acquisitions.
MicroStrategy’s Bitcoin-centric approach, initiated in August 2020, has proven beneficial for the company’s shareholders. Since embarking on this strategy, MicroStrategy’s stock price has surged by over 800%. The firm’s shares jumped more than 8% following the announcement of the latest Bitcoin purchase, closing at $141.47 on Friday.
Saylor introduced a new metric called “BTC yield” to measure the strategy’s success. According to his statement, MicroStrategy has achieved a BTC yield of 4.4% so far this quarter and 17% year-to-date. This metric aims to describe the percentage change over a given period in the ratio between the company’s Bitcoin holdings and its assumed diluted shares outstanding.
While MicroStrategy’s primary business remains enterprise software and cloud-based services, its value is now intricately tied to its Bitcoin holdings. Saylor views the company as an institutional bridge between traditional investors and Bitcoin, offering various types of exposure to the cryptocurrency.
The company’s continued accumulation of Bitcoin comes amid growing institutional interest in cryptocurrencies. With this latest purchase, MicroStrategy further distances itself from other corporate Bitcoin holders, such as Marathon Digital Holdings and Riot Platforms, which hold significantly smaller amounts of the digital asset.
