MicroStrategy buys additional $10 million worth of Bitcoin

MicroStrategy Incorporated (Nasdaq: MSTR), an American company providing business intelligence solutions to numerous world-famous brands from the Fortune Global 500 list, has purchased an additional 480 Bitcoins as of June 28th. The purchase was revealed in a regulatory filing from June 29th.

The same day, MicroStrategy’s CEO Michael Saylor, took to Twitter to reveal that the purchase amounted to ~10 million USD dollars, for an average price of ~$20,817 per Bitcoin.

MicroStrategy has been well-known for its love for the Bitcoin cryptocurrency. The company holds a staggering amount of 129,699 Bitcoins to date. They have been enthusiastically buying the famous cryptocurrency since August 2020, when the average price of the coin was around $11,000. They have continuously purchased additional coins at an almost regular basis since, apparently seeking to invest any capital they can get their hands on directly in the cryptocurrency.

One of their largest purchases came in April 2021, when the company spent a staggering $1.026 billion in the purchase of 19,452 Bitcoins. In that year, the company bought batches of Bitcoin in different amounts every single month from January to June (sometimes even several purchases in a given month!). Not stopping there, the company went on a spending spree from September to December 2021 to buy an additional 19,307 Bitcoins, for a total of more than $1 billion of cash.

A further testimony to their commitment and trust in the cryptocurrency is the company’s use of loans to facilitate new Bitcoin purchases. In April 2022, MicroStrategy used a loan from Silvergate Bank to continue its controversial strategy of investing in the world’s first and most popular cryptocurrency. 

The Silvergate Bank has issued the loan under its Silvergate Exchange Network (SEN) Leverage program. The program gives out U.S. dollars as loans using Bitcoin as collateral. The loan value was 205 million USD, and it was used by MicroStrategy to buy $190.5 million worth of Bitcoin. Following the event, Silvergate’s CEO Alan Lane was quick to praise MicroStrategy as being an “exceptional example” of how bitcoin can be utilised to support companies grow their business.

The result of all these purchases in the span of the last 2 years, have resulted in MicroStrategy now holding 129,699 BTC. The coins have been  acquired for a total of about $4 billion. That makes the average price of purchase around $30,664 per Bitcoin. 

However, at the current price of BTC, the value of all the coins is at around $2.5 billion, which means that MicroStrategy would be at a loss of about $1.5 billion if it would sell all its BTC today. That’s a loss of more than 35% of the total invested amount.

However, MicroStrategy’s Saylor doesn’t seem to be much concerned. His company has said that given their loan, collateral sizing and future collateral options, they are prepared for a BTC price to go as low as $3,562.

Currently, MicroStrategy is first on the list of public companies holding the largest amount of BTC, followed by Tesla which boasts 43,200 BTC.