MicroStrategy Additional Big Bets: $1.5 Billion Bitcoin Purchase Last Week
In This Article:
MicroStrategy (NASDAQ:MSTR) just made another massive splash in the crypto world, snapping up 15,350 bitcoins (BTC-USD) for a jaw-dropping $1.5 billion. This latest purchase, completed between December 9 and December 15, pushes the companys total Bitcoin stash to a staggering 439,000 BTCvalued at $42.2 billion at todays prices. Whats more, this is the first time MicroStrategy has shelled out an average price north of $100,000 per Bitcoin, signaling its unwavering confidence in the long-term value of the digital asset. Funded by selling nearly 3.88 million Class A shares, the company is leaning hard into its Bitcoin as treasury strategy, with an eye-catching $27.1 billion now invested.
The timing couldnt be better. MicroStrategys inclusion in the Nasdaq 100 index boosted its stock over 5% in premarket trading, while Bitcoin itself hit a record-breaking over $106,000. To measure how these bold moves stack up for shareholders, the company uses a unique metric called Bitcoin Yield (BTC Yield), which reflects the growth of its Bitcoin holdings relative to its diluted shares. Year-to-date, BTC Yield has surged over 72%, showcasing MicroStrategys ability to use equity sales to supercharge its Bitcoin portfolio. While skeptics like economist Peter Schiff warn of potential downside risks, MicroStrategys aggressive strategy is being closely watched as a bellwether for corporate Bitcoin adoption.
Adding even more fuel to the fire, new fair value accounting rules for digital assets kick in next year, allowing companies to record gains when Bitcoin prices rise. This could cement Bitcoins place as a legitimate corporate asset and vindicate MicroStrategys high-stakes play. Executive Chairman Michael Saylor has long championed Bitcoin as the ultimate hedge against inflation and fiat devaluation, and his companys moves underscore that conviction. Love it or hate it, MicroStrategys Bitcoin binge isnt just a strategyits a statement about where the future of finance might be headed.
This article first appeared on GuruFocus.