WHAT IS MICROSTRATEGY'S STRATEGY IN BITCOIN

MicroStrategy has adopted an aggressive and long-term strategy to accumulate Bitcoin (BTC). Here is a summary of their approach:

MicroStrategy's Strategy in Bitcoin

Massive Accumulation:

MicroStrategy has accumulated more than 152,000 BTC since 2020, becoming one of the largest institutional holders of Bitcoin.

Financing through Convertible Bonds:

The company has issued convertible bonds at a 0% interest rate to finance its Bitcoin purchases. These bonds allow investors to lend money to the company interest-free, with the option to convert those bonds into shares if the stock price exceeds a predetermined price.

Financial Optimization:

MicroStrategy uses an Automated Market Maker (ATM) product to manage Bitcoin volatility. This approach involves separating the risk, volatility, and return of Bitcoin from fixed-income securities, transferring the resulting return to shareholders.

Long-Term Vision:

Michael Saylor, CEO of MicroStrategy, has been a vocal advocate for Bitcoin, arguing that fiat currencies are "trash" and that Bitcoin is a superior store of value. The company sees Bitcoin as a long-term investment and a hedge against inflation.

Integration into Traditional Finance:

MicroStrategy's strategy reflects a broader trend of integrating cryptocurrencies into traditional financial frameworks. By leveraging Bitcoin's unique characteristics, the company aims to optimize its financial operations and provide value to its shareholders.

Risks and Considerations

Volatility: The high volatility of Bitcoin can be detrimental to the company, especially if prices fall significantly.

Indebtedness: The strategy of financing Bitcoin purchases through convertible bonds involves risks, as the company is incurring debt to acquire more BTC.