Bitcoin’s Biggest Corporate Investor Has Spent Nearly $500 Million Buying Bitcoin As Crypto Markets Lost $700 Billion In Value

Topline

MicroStrategy, the data analytics firm helmed by billionaire bitcoin bull Michael Saylor, disclosed on Thursday a second batch of bitcoin purchases during the crypto market’s latest rout, revealing it has yet again used stock-sale proceeds to boost its crypto holdings to unprecedented levels as the market reels.

Key Facts

In a regulatory filing, Virginia-based MicroStrategy, which owns more bitcoin than any other corporation in the world, said it purchased approximately 1,434 bitcoins for $82.4 million in cash between November 29 and December 8, bringing its total holdings to 122,478 bitcoins.

The move comes after the firm disclosed last week it purchased approximately 7,002 bitcoins for about $414.4 million in cash, or $59,187 per coin, between October 1 and November 29.

Despite MicroStrategy’s growing investment, the price of bitcoin has struggled to recoup ​​losses since tumbling from an all-time high above $69,000 set last month, with prices crashing nearly 20% this weekend after global equity markets sank on concerns over the omicron variant of the coronavirus. 

Though it’s still up a staggering 165% over the past year, the price of bitcoin, at about $48,000 Thursday morning, is down nearly 4% over the past 24 hours and 27% in the past month.

MicroStrategy helped fund its recent purchases using proceeds from a stock sale previously disclosed in June that has thus far raised approximately nearly $500 million in the fourth quarter.

Shares of MicroStrategy, which has also used newly issued debt to buy bitcoin during the pandemic, sank about 5% Thursday morning, but are up about 42% this year.

Big Number

$6 billion. That’s the combined value of MicroStrategy’s bitcoin holdings on Thursday, implying a return of about 64% thus far given a purchase price of $3.7 billion. Though MicroStrategy owns more bitcoin than any publicly traded company, investment manager Grayscale owns 654,885 tokens—worth $32 billion on Thursday.

Tangent

Boosted by decades-high inflation and institutional adoption, the cryptocurrency market briefly eclipsed a record high market value of $3 trillion last month—though it’s since tanked to $2.3 trillion on Thursday.

Key Background

Thanks to its growing bitcoin investment—rivaled only by Tesla’s 42,000 coins—MicroStrategy shares have minted a stunning turnaround since the dot-com bubble tanked prices roughly two decades ago. The stock has skyrocketed more than 380% since the company first started buying bitcoin in August 2020, though it’s also been incredibly sensitive to the nascent crypto market’s outsized volatility. The stock is still down more than 50% from a 21-year high in February, when recently skyrocketing bitcoin prices plummeted after Tesla CEO Elon Musk said on Twitter its prices seemed “a little high.” At the time, Saylor, who Forbes estimates is worth approximately $2.3 billion, said the company’s growing investment “reaffirms [the firm’s] belief that bitcoin, as the world’s most widely adopted cryptocurrency, can serve as a dependable store of value.” 

Further Reading

Bitcoin’s Biggest Corporate Investor Buys Another $177 Million—Boosting Holdings To $5.4 Billion Amid Massive Crypto Comeback (Forbes)

Bitcoin’s Biggest Corporate Investor Raises $500 Million To Buy More—Topping Expectations As Crypto Surges (Forbes)

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