Today, MicroStrategy, the publicly-traded business intelligence firm, bought more Bitcoin, doing so at an average purchase price of $19,427 and purchasing $50 million worth of it.
Buying 2,574 BTC $19,427 Apiece
This was revealed through a filing MicroStrategy made with the US watchdog, the Securities and Exchange Commission, showing that the firm had bought a staggering 40,824 BTC in total with this deal included. It was back on the 11th of August, 2020, when the firm bought around $250 million in Bitcoin, with another purchase of $175 million made just a month after that. This round’s purchase added a total of 2,574 BTC into its holdings.
This latest purchase runs in tandem with MicroStrategy’s latest policy when it comes to reserves. During the earnings call for Q3 2020, the firm made it clear that excess cash, that is, anything beyond $50 million used in its day-to-day operating cash reserves, would be funneled into Bitcoin (BTC). Of course, they reserved the right to make it subject to business needs and market conditions.
MicroStrategy Hedging With Bitcoin
Indeed, Micheal Saylor, the CEO of MicroStrategy, made the announcement on Twitter, and has previously heralded Bitcoin as one of the most rational vessels out there when it comes to storage of value.
MicroStrategy has purchased approximately 2,574 bitcoins for $50.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $19,427 per bitcoin. We now hold approximately 40,824 bitcoins.https://t.co/nwZcM9zAXZ
— Michael Saylor (@michael_saylor) December 4, 2020
It seems to start giving the firm dividends, as well. MicroStrategy had its shares go up by a factor of 170% when it was first announced that the firm was interested in Bitcoin, back in July of 2020. Some even went as far as to call Microstrategy an ETF of Bitcoin at large, though there’s some debate over that one.
Crunching the numbers, it can be figured out that the average cost per Bitcoin of all of MicroStrategy’s purchases totals at $11,635 apiece. At the same time, the firm’s Bitcoin holdings are now worth around $766.6 million in total. Not a bad investment by any stretch.
Institutional PLayers Set Their Sights On BTC
Microstrategy is far from the first firm to start making significant Bitcoin holdings as a reserve. Indeed, the institutional players of the world are all setting their sights on the world’s first cryptocurrency, with many speculating that the “crypto winter” that hit the space after the 2017 bubble won’t repeat itself thanks to the massive levels of increased participation by these players.
Time will only tell how well the Bitcoin will perform in the future. Historically, the coin has seen some massive fluctuations, from benign nigh-worthless at the very beginning to almost $20,000 apiece. Indeed, some exchanges even see it surpass 2017’s all-time high, albeit briefly, but the fabled $20,000 mark has yet to be achieved.