MicroStrategy – the public company famous for its strong investment strategy in cryptocurrencies – has once again asserted its position in the cryptocurrency market with another impressive transaction. On the night of December 23, 2024, the company announced it had purchased an additional 5,262 BTC for a total value of 561 million USD, bringing the total number of Bitcoin they hold to a staggering 444,262 BTC.
Details of the latest transaction
This Bitcoin purchase was financed through the sale of 1.3 million convertible bonds, a familiar financial strategy that has been applied many times before. According to the announcement, the company still has the ability to issue an additional 7.08 billion USD in bonds to execute similar transactions in the future.
This transaction raises the average price that MicroStrategy pays for each BTC to 62,257 USD. Notably, with an average price of 106,662 USD for this transaction, it is a decisive move that reflects a strong belief in the long-term growth potential of Bitcoin, despite short-term fluctuations.
The footprint of the 'positive DCA' strategy
MicroStrategy is executing one of the largest-scale Bitcoin buying strategies in the world, particularly through a method called positive DCA (Dollar Cost Averaging). This is the seventh consecutive week the company has added more Bitcoin to its investment portfolio, with a history of continuous buying from November 11, 2024, to now:
• November 11: Purchased 27,200 BTC for a total value of 2 billion USD.
• November 18: Added 51,780 BTC for 4.6 billion USD.
• End of November: Acquired an additional 55,500 BTC, worth 5.4 billion USD.
• Early December: Bought an additional 15,400 BTC for 1.5 billion USD.
• Second week of December: Announced the purchase of 21,550 BTC, worth 2.1 billion USD.
• December 16: Spent 1.5 billion USD to acquire an additional 15,350 BTC.
• December 23: Continued to buy 5,262 BTC for 561 million USD.
In total, MicroStrategy has spent 17.66 billion USD to acquire 192,042 BTC in just over a month.
Impressive Bitcoin investment performance
MicroStrategy is not only the largest 'Bitcoin whale' among public companies but has also achieved significant profits from this investment strategy. As of December 23, 2024, the company's annual Bitcoin investment return reached 73.7%, while the return for the fourth quarter of 2024 was up to 47.4%.
Michael Saylor and the long-term vision
The founder and Chairman of MicroStrategy, Michael Saylor, continuously reinforces his belief in Bitcoin. Before each Bitcoin purchase announcement, he often 'hints' through images from the SaylorTracker tool, alluding to plans being executed.
Saylor believes that Bitcoin is 'digital gold' and the top store of value asset of the 21st century. He sees Bitcoin not just as an investment but also as a long-term strategy to preserve wealth against inflation and global financial volatility.
Risks and opportunities for investors
While MicroStrategy's Bitcoin buying strategy has yielded significant profits, investors must also be aware of the inherent risks:
• Price volatility: Bitcoin is a highly volatile asset, which can significantly impact investment performance.
• Financial risks: Using convertible bonds to buy Bitcoin creates significant financial pressure, especially if the market enters a strong correction phase.
• Legal regulations: Changes in cryptocurrency policies and laws can affect the value and liquidity of Bitcoin.
Conclusion
MicroStrategy's Bitcoin buying strategy, led by Michael Saylor, is a prime example of strong belief in the long-term value of this asset. With over 444,262 BTC in its portfolio, MicroStrategy is not only reshaping how businesses perceive cryptocurrencies but also paving the way for institutional investors to enter the market.
However, investors need to carefully consider, assess risks, and always adhere to the principle of portfolio diversification to preserve capital in a volatile market environment.