MicroStrategy, the software company known for its bold 'HODL' Bitcoin strategy, has just announced the purchase of an additional 1,070 BTC worth 101 million USD in the ninth consecutive week. This move reaffirms the company's long-term commitment to Bitcoin, despite concerns about price risks and heavy dependence on this asset.
Latest Transaction Details
• Amount of BTC purchased: 1,070 BTC.
• Average purchase price: 94,004 USD/BTC.
• Total BTC held: 447,470 BTC.
• Current BTC portfolio value: Over 45.5 billion USD (at BTC price of 101,832 USD).
• Average purchase price overall: 62,503 USD/BTC.
Continuous BTC Purchase Chain
From November 2024, the company will continuously purchase more Bitcoin weekly after Donald Trump is re-elected as President of the United States. In the early weeks, the company purchased a large amount of BTC:
• Week 1: 2 billion USD Bitcoin.
• Week 2: 4.6 billion USD.
• Week 3: The largest transaction at 5.4 billion USD.
However, the amount purchased each week is gradually decreasing as the price increases sharply.
MicroStrategy's Bitcoin Strategy
MicroStrategy has long transformed from a traditional software company into a 'Bitcoin company'. This decision originated in 2020, when CEO Michael Saylor believed that Bitcoin was the best asset to preserve value amidst low interest rates and economic pressures from the pandemic.
Currently, MicroStrategy allows investors to access Bitcoin indirectly through the company's shares on the Nasdaq. These shares have increased by 500% year-to-date, making MicroStrategy an attractive option for those looking to enter the crypto market in a better-regulated environment.
Risk Concerns
However, the strong focus on Bitcoin also exposes MicroStrategy to various risks:
1. Dependence on Bitcoin: The company's value is closely tied to Bitcoin price fluctuations.
2. High financial leverage: The company has issued debt to buy Bitcoin, leading to significant risk if BTC prices drop sharply.
3. High stock valuation: Some analysts believe that MicroStrategy's shares may be overvalued.
Conclusion
The continuation of MicroStrategy's Bitcoin purchasing chain reflects strong optimism for the future of the world's largest cryptocurrency. However, investors need to be cautious of potential risks when the company heavily relies on a single asset. Will the bold 'HODL' strategy continue to succeed, or will it be a double-edged sword when the market reverses?
