MicroStrategy grabs attention again by acquiring 7,420 bitcoins (BTC) worth $458.2 million. These purchases were made between September 13 and 19, 2024, at an average price of $61,750 per bitcoin.
Total MicroStrategy Holdings Reach 252,220 BTC
With the latest addition, MicroStrategy's total holdings now amount to 252,220 BTC. These bitcoins were acquired for $9.9 billion at an average purchase price of $39,266 per coin. Currently, the market value of these assets is close to $16 billion, indicating significant potential profit for the company. For example, in early September, MicroStrategy acquired 18,300 bitcoins at an average price of $60,408 per coin, adding $1.11 billion to its investments. Throughout the third quarter, the company purchased a total of 25,720 BTC.
Purchase Funded by Debt
To fund the bitcoin purchases, MicroStrategy used proceeds from issuing new convertible senior notes. Initially, the company aimed to raise $700 million, but due to high investor interest, the amount was increased to $1.01 billion. All the proceeds were used to buy bitcoins. This step aligns with the company's strategy introduced in 2020 to accumulate BTC through debt issuance. For example, Marathon Digital has followed this approach by using bitcoin as a treasury asset. MicroStrategy's success in using this method has changed the perception of many companies regarding bitcoin as a corporate asset.
Significant Bitcoin Yield
MicroStrategy also reported a yield of 5.1% in this quarter and 17.8% since the beginning of the year. These results show significant profit for the company from holding bitcoins, despite the high volatility of the crypto market. Analysts predict that bitcoin prices may soon reach new all-time highs, thanks to increased crypto market liquidity and central banks' easing of monetary policies. For instance, the US Federal Reserve recently cut interest rates by 50 basis points, and a further cut of 75 basis points is expected in the fourth quarter of 2024.
MicroStrategy has established itself as one of the main players in the bitcoin ecosystem. With continuous additions to their bitcoin holdings, the company serves as an example for others looking to use BTC as an asset. The latest steps affirm their optimism about bitcoin's future. Michael Saylor, the head of the company, has repeatedly expressed confidence that bitcoin will become increasingly important in the global financial system. With holdings exceeding 250,000 BTC, MicroStrategy demonstrates a long-term commitment to bitcoin. In the near future, the company is likely to continue purchases with the remaining $889 million in debt funds.
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