HSBC bans clients from buying shares of MicroStrategy, which has become known for its massive bitcoin purchases

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  • HSBC has instituted a new policy preventing clients from purchasing and moving shares of MicroStrategy into their account, according to Reuters.
  • The decision comes as HSBC broadly clamps down on cryptocurrency trading.
  • MicroStrategy has repeatedly made headlines in recent weeks by buying large amounts of bitcoin.
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HSBC has said it will prevent clients from purchasing and moving shares of MicroStrategy into their InvestDirect accounts, according to a March 29 message viewed by Reuters that referred to the stock as a “virtual currency product.”

The decision comes amid a broader move by HSBC to limit cryptocurrency trading.

“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” HSBC said in the same statement viewed by Reuters.

HSBC did not immediately respond to Insider for comment.

MicroStrategy last August became the first publicly listed company to buy bitcoin as part of its capital allocation strategy. It’s since bought billions worth of the coin on multiple occasions, and currently holds $5.4 billion, according to a regulatory filing. Further, Michael Saylor’s firm announced on Monday that it is paying non-employee board members entirely in bitcoin instead of cash.

HSBC’s move goes against the wave of institutions and major corporations adopting bitcoin. Heavyweights including Goldman Sachs, Bank of New York Mellon, Tesla, PayPal, and Visa have started facilitating transactions in the coin, or accepting it as payment.

Bitcoin, the world’s most popular cryptocurrency, rose as much as 2.6% to $61,229 on Monday ahead of Coinbase’s listing this week.

Cryptocurrencies as a whole hit a record high of market capitalization of $2 trillion early this month, having doubled in value in just three months.

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Michael Saylor’s MicroStrategy buys another $15 million of bitcoin, just three weeks after its latest purchase

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MicroStrategy CEO, Michael Saylor.

  • MicroStrategy bought another $15 million worth of bitcoin Monday, just three weeks after its last purchase.
  • The company now holds around $2.226 billion worth of bitcoin.
  • Saylor in a tweet said his firm owns 91,579 bitcoins acquired for $2.226 billion at an average price of $24,311 per coin.
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Michael Saylor’s MicroStrategy bought another $15 million worth of bitcoin on Monday, three weeks after its latest purchase in March.

The CEO on Twitter revealed that his business intelligence firm purchased an additional 253 bitcoin at an average price of around $59,339 according to a Securities and Exchange Commission filing dated Monday.

“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.

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Michael Saylor’s MicroStrategy says it bought another $15 million worth of bitcoin, bringing its total holdings to more than $5 billion

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MicroStrategy CEO, Michaely Saylor.

Michael Saylor’s business intelligence firm MicroStrategy bought another $15 million worth of bitcoin on Friday, bringing the company’s total holdings to 91,326 units.

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.

MSTR chart 2
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MicroStrategy reveals additional $10 million bitcoin bet, bringing its total holdings close to 100,000 bitcoins

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MicroStrategy has boosted its investment in bitcoin again and now owns almost 100,000 tokens. 

The publicly-traded business intelligence company revealed an additional $10 million bitcoin bet in a filing registered with the Securities and Exchange Commission on Friday.

The company said it bought about 205 bitcoins at an average price of $48,888 per coin, inclusive of fees and expenses.

As of March 5, MicroStrategy holds about 91,065 bitcoins that were purchased for $2.2 billion at an average price of $24,119 per coin. The total value of its bitcoin holding at the time of writing would equate to $4.4 billion.

The price of bitcoin hovered around $48,325 on Friday. Its price has fallen 8% in the past week, alongside rises in bond yields, but is still up 70% year-to-date. “Bitcoin remains highly correlated with bond prices,” said Edward Moya, a senior market analyst at OANDA. “The bond market selloff is showing some signs of stability and that could mean the bitcoin pullback is nearing its end.”

Shares in MicroStrategy are up 64% year-to-date.

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MicroStrategy CEO Michael Saylor says he’ll consider stock or debt financing in order to buy more bitcoin

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course’s graph

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.”

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