MicroStrategy now holds 444,262 BTC, valued at $42.2 billion, after its latest $561 million purchase.
The company's Bitcoin holdings increased by 5,262 BTC, with shares trading at $342 after a 17% weekly dip.
MicroStrategy's entry into the Nasdaq-100 index marks a milestone, coinciding with its seventh consecutive Bitcoin acquisition.
MicroStrategy, a business software company that invested heavily in Bitcoin, announced that it has purchased an additional 5,262 Bitcoins for $561 million. This acquisition occurred in the week ending December 22, meaning the firm has accumulated BTC for seven straight weeks. This announced acquisition, revealed through a U.S. SEC filing, means the company now holds 444 262 BTC, valued at $42.2 billion based on current prices.
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This latest acquisition was financed via 1.3 million shares using MicroStrategy's currently available at-the-market (ATM) program. This flexible model allows MicroStrategy to raise funds by selling shares directly into the market. The firm has $7.08 billion under this program, and more acquisitions can still be made. The purchase price of the most recent batch was about $106,622 per bitcoin, bringing MicroStrategy’s total average cost to $62,257.
Nasdaq-100 Inclusion Signals Milestone for MicroStrategy
This announcement coincided with MicroStrategy’s first trading under the NASDAQ-100 index. This ranks the company among the best non-financial firms, like Apple and Nvidia, as they grow and expand. Because of increased passive and active investors, MicroStrategy’s trading volume is expected to increase with Nasdaq-100 inclusion.
Analysts have estimated that these changes will create a net buying worth of $2.1bn from Exchange-traded funds (ETFs). Juan Leon, the Senior Investment Strategist at Bitwise, further elaborated that the same flows could hike daily trading volumes by 20% to 40%. He also estimated that the stock could have more than 50% more upside during positive trading days and highlighted the impact of inclusion in the index.
Bitcoin Price Decline and Market Risks
However, since bitcoin's prices are volatile, MicroStrategy’s market risks now relate to its bitcoin holdings. Bitcoin dropped below the $100000 mark, $93,313.96, trading at $108,000 the previous week. This decline came after the Federal Reserve made pointy statements that it would be careful in the next cuts of the interest rates.
MicroStrategy’s share price has tracked Bitcoin’s recent dip, which is currently down to $342, a 17% decline in the last week. Some have criticized its leveraged Bitcoin acquisition strategy based on the high price-to-Bitcoin multiple that its shares fetch. Although this approach has a high potential return at the peak of the Bitcoin price, it is highly risky at the low point.
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