MicroStrategy Claims $615M Worth Of Bitcoins; What’s Cooking?
The world of cryptocurrency is buzzing again as MicroStrategy, a leading business intelligence firm, has acquired over 14,620 BTC in the past month, increasing its total holdings to 189,150 BTC. The company’s bullish stance on Bitcoin could inspire more institutional adoption and drive the price of BTC higher, especially if a spot Bitcoin ETF is approved in the US.
MicroStrategy’s Move In Crypto Universe
MicroStrategy, the software company has an old relationship with the crypto space, especially Bitcoin. Michael Saylor, the visionary president has been stacking Bitcoin since 2020, seeing it as a superior store of value and a hedge against inflation.
The company has announced its purchasing of another 14,620 BTC for $615.7 million in cash between Nov. 20, 2023, and Dec. 26, 2023, bringing its total Bitcoin holdings to 189,150 BTC. The average purchase price per BTC was $42,110, which is higher than the current market price of around $43,000.
To make the move, MicroStrategy used various sources, including issuing convertible notes, selling its shares, and using its operating cash flow. The company has spent about $5.9 billion to acquire its Bitcoin stash, which is now worth over $8 billion.
Is MicroStrategy A Bitcoin Catalyst?
MicroStrategy’s massive Bitcoin accumulation is not new to the market. The company’s stock (NASDAQ: MSTR) has soared by 316% since the beginning of 2023, outperforming Bitcoin’s 160% gain in the same period.
The company’s president, Michael Saylor, has also been a vocal advocate for Bitcoin, educating and influencing other institutional investors to follow his lead. Saylor has expressed his optimism about the potential approval of a spot Bitcoin ETF in the US, which he believes would be the “biggest development on Wall Street in 30 years”.
A spot Bitcoin ETF, if approved would inspire retail and institutional investors to buy and sell Bitcoin directly, without the need for intermediaries. This would increase the liquidity, accessibility, and legitimacy of Bitcoin, and potentially drive its price higher with more room to run.
As every coin has two phases, Bitcoin ETF also holds some risks. Some critics argue that such a product could pose risks to the security and decentralization of Bitcoin. Creation of millions of unbacked Bitcoin and exposure of investors to counterparty risk.
Arthur Hayes, the co-founder of BitMEX even warned that a spot Bitcoin ETF could “destroy” Bitcoin if it becomes too popular and dominant.
MicroStrategy’s Vision Behind Bitcoin Purchase
Regardless of the outcome of the Bitcoin ETF saga, MicroStrategy has established itself as a leader and innovator in the crypto space. The company’s consistent and strategic Bitcoin accumulation has demonstrated its confidence and commitment to the future of Bitcoin.
MicroStrategy’s actions have also had a positive impact on the crypto market, as they have created a ripple effect of more institutional adoption and bullish sentiment. The company’s moves have also coincided with favourable market conditions, such as macroeconomic factors, regulatory developments, and broader institutional sentiment.
