MicroStrategy Continues Bitcoin Buying Spree with $2.1 Billion Purchase
MicroStrategy Inc., the Virginia-based software firm, has once again made headlines by acquiring an additional $2.1 billion worth of Bitcoin. This latest purchase marks the company’s fifth consecutive weekly buy, further cementing its status as a major player in the cryptocurrency market.
The acquisition, which took place between December 2 and December 8, 2024, saw MicroStrategy add 21,550 Bitcoin tokens to its holdings. The average purchase price per token was approximately $98,783, according to a filing with the U.S. Securities and Exchange Commission. This brings the company’s total Bitcoin holdings to 423,650 tokens, valued at roughly $41 billion.
MicroStrategy’s aggressive Bitcoin strategy, spearheaded by co-founder and Chairman Michael Saylor, has been a significant shift for the company. Initially a small enterprise software maker, MicroStrategy has transformed itself into a “Bitcoin Treasury,” using a combination of equity and fixed-income securities sales to finance its rapidly increasing Bitcoin acquisitions. The company plans to raise $42 billion over the next three years through a mix of at-the-market stock sales and convertible debt offerings.
The firm’s Bitcoin holdings are now worth more than the cash holdings of Nvidia Corp. and all but six of the non-financial companies listed on the S&P 500 Index. This substantial investment has drawn both praise and scrutiny, as the company’s reliance on Bitcoin to meet its financial needs could prove risky.
Despite the potential risks, MicroStrategy’s stock has seen a significant surge this year, with a nearly 500% increase in share value. This has fueled demand from investors and attracted hedge funds, which have been snapping up the notes used in market-neutral arbitrage bets. However, the company’s stock experienced a 7.5% drop on Monday, closing at $365.34.
MicroStrategy’s latest Bitcoin purchase was funded by selling an aggregate of 5,418,449 shares, generating net proceeds of approximately $2.13 billion. The company still has $9.19 billion remaining from its previously existing $21 billion at-the-market share sales facility.
The broader market has also seen increased interest in Bitcoin, with U.S. spot Bitcoin ETFs raking in $2.73 billion in fresh funds last week. Other companies, such as Bitcoin miner Riot Platforms, have followed MicroStrategy’s lead, announcing a $500 million convertible note offering to purchase more Bitcoin.
As MicroStrategy continues to bet big on Bitcoin, the company’s fortunes remain closely tied to the cryptocurrency’s performance. While the strategy has paid off so far, with Bitcoin surging more than 130% since last December, the potential for a market reversal could have severe consequences for the company and its investors.
