“As of 4/5/2021, we #hodl ~91,579 bitcoins acquired for ~$2.226 billion at an average price of ~$24,311 per bitcoin,” Saylor said in the tweet.
MicroStrategy was the first corporation to directly purchase bitcoin, and made its last purchase on March 12.
Saylor has long been an advocate of digital currencies, especially bitcoin, and has been vocal about his stance. The bitcoin evangelist in February this year said 2021 is the “year of institutional investment” in cryptocurrency.
MicroStrategy first made a $250 million bitcoin purchase in August of 2020 and announced that it was using existing cash on its balance sheet to acquire more of the digital currency.
Bitcoin this year been embraced by major institutions including Goldman Sachs, BNY Mellon, Tesla, PayPal, and Visa.
The world’s most popular cryptocurrency is trading lower on Monday by 0.258%, to $58,049 after flirting with the $60,000 last week. The digital asset has a market capitalization of around $1.1 trillion.
Late last year, in response to a tweet from Musk with a lewd meme about bitcoin, Saylor said he should do Tesla’s shareholders a “$100 billion favor” by converting the company’s balance sheet from dollars to bitcoin. “Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor,” he said.
Musk asked whether such large transactions were possible. Saylor replied that they were and that he was willing to share his playbook with the Tesla boss.
A little over a month later, Tesla revealed its biggest bitcoin endorsement to date. It announced that it would invest $1.5 billion in the world’s most popular cryptocurrency and soon accept crypto payments for its products. The automaker used the crypto exchange Coinbase to make its bitcoin purchase, according to The Block.
Saylor called Tesla’s move an “inflection point,” adding that the narrative about belief in bitcoin quickly changed from skepticism to growing acceptance. He said that while it wasn’t “appropriate business decorum” to comment on conversations with a CEO of another public company, their Twitter exchange likely affected Tesla’s decision.
Saylor pushed back on the idea of bitcoin as an example of irrational investor exuberance, involving enthusiasm about news of price increases.
“If you’re looking for an example of real speculation, it would be people speculating upon whether they can squeeze others in a short squeeze and a small stock, like GameStop,” he said. “Bitcoin is not speculation, OK? Bitcoin is a unique new technology, it’s like the Facebook of money or the Google of money. And it grew from nothing to a trillion dollars in monetary value in 12 years.”
Bitcoin traded flat at $57,380 in early European trading on Monday. It’s up about 95% year-to-date and more than 885% in the past 12 months.
The firm’s bitcoin holdings were worth roughly $5.26 billion as of March 11’s price per coin. Saylor’s firm acquired its bitcoin for some $2.211 billion at an average price of around $24,214 per bitcoin.
Michael Saylor has long been an advocate of digital currencies, and particularly bitcoin. The CEO even held a conference called “bitcoin for corporations” on February 4 to attract more institutional investment. Saylor said he held the conference by “popular demand” after getting so many questions from fellow CEO’s about his company’s bitcoin purchases.
MicroStrategy first bought into bitcoin with a $250 million purchase back in August of 2020.
Since then, Saylor changed MicroStrategy’s treasury reserve policy in order to make bitcoin the company’s treasury reserve asset and then continued his entry into the digital currency market.
Saylor purchased $50 million of bitcoin on December 4, then quickly followed with a December 8 $400 million bitcoin buy.
When MicroStrategy ran out of funds to buy bitcoin, Saylor turned to debt offerings to feed the habit. On February 17, MicroStrategy’s convertible debt offering hit $900 million and the firm used the proceeds to buy more bitcoin.
Since then, MicroStrategy has used bitcoin sell-offs as buying opportunities, and now the company’s digital asset holdings are nearing 100,000 bitcoin.
MicroStrategy’s business plan and operations have taken a back seat to its bitcoin purchases lately. The company boasts a market cap of roughly $7.71 billion as of March 12, but turned in revenues of just $480 million in 2020 while posting a net loss of roughly $7.5 million, according to SEC filings.
MicroStrategy traded down 4.70%, at $770 per share, as of 9:38 a.m. ET on Friday.
MicroStrategy CEO Michael Saylor said the company is considering issuing more debt in order to buy addtional bitcoin.
“We’ve been pretty clear that we’ll consider equity and debt financings,” Saylor said, speaking as part of a panel for the Bloomberg Crypto Summit Thursday. “It makes sense to buy as much of that asset class as we can,” he said.
The software technology company was the first corporation to directly purchase bitcoin, driven by Saylor’s view of the digital asset as a hedge against a potential devaluation of the US dollar.
Saylor on February 24 announced on Twitter that his company purchased an additional 19,452 bitcoins for an estimated $1.026 billion in cash at an average price of $52,765 per bitcoin.
MicroStrategy owns 90,531 bitcoins as of February 24, investing at roughly $2.2 billion in total since it started purchasing the digital asset in August. Thus far, the company has issued two rounds of convertible bonds to purchase more of the coins.
Saylor also pointed to the cryptocurrency’s finite number as one of the factors that make bitcoin valuable. There are only 21 million bitcoins, and 18 million have been mined so far.
“If you want to preserve shareholder value, you have to hold scarce assets,” he said. “Bitcoin is the most liquid, scarce, uncorrelated asset you can buy.”
Bitcoin’s pullback slashed as much as 23% from shares of crypto bull Michael Saylor’s MicroStrategy on Wednesday.
Although MicroStrategy doesn’t mine bitcoin itself, the business intelligence firms is one of only a few companies to buy into bitcoin in a big way. MicroStrategy owns 71,079 bitcoins, worth an estimated $3.21 billion at current prices.
For reference, the company’s market cap is $9.25 billion as of Wednesday, meaning MicroStrategy owns a third of its net value in Bitcoin.
MicroStrategy acquired the majority of its bitcoin in 2020 at prices well below current levels. In fact, according to a press release from the company, it owned 70,470 bitcoins as of Dec 21, which were acquired at an aggregate purchase price of approximately $1.125 billion or $15,964 per bitcoin.
Saylor’s business intelligence firm has seen a monumental 732% rise in share prices during the past six months as bitcoin climbed.
And when Tesla announced a $1.5 billion investment in the cryptocurrency on Monday, sparking newfound hope for institutional investment, a move to record highs of over $48,000 helped MicroStrategy break the $1000 per share mark.
Michael Saylor has been at the forefront of a move by institutions into Bitcoin for some time and that position was solidified after he held a “Bitcoin for Corporations” conference on February 3 and 4.
In an interview with Ran Neuner, former host of CNBC’s “Crypto Trader,” Saylor said 7,000 companies and around 8,500 people attended the event, exceeding his expectation of 2,000 attendees.
Saylor also noted he held the event “by popular demand” after he was asked for “thousands” of meetings from prospective institutional bitcoin buyers to discuss legal, logistical, and security details.
Tesla and Microstrategy may entice other corporate treasuries to hold bitcoin, but the move is risk. JPMorgan strategists led by Nikolaos Panigirtzoglou warned clients of the potential for increased volatility if companies start holding significant amounts of bitcoin.
“The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin. The addition of BTC would cause a big increase in the volatility of the overall portfolio of large companies. BTC allocation could mean the portfolio’s volatility rises to 8% due to Bitcoin’s 80% annualized volatility,” the research note states.
MicroStrategy traded down 22%, at $990.66, as of 3:53PM E.T. on Wednesday.