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MicroStrategy buys an additional $10M in Bitcoin

Photo of: Nathan VDH
by Nathan VDH
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While Bitcoin was down 15% a day earlier, MicroStrategy decided to acquire an additional 314 Bitcoin. At an average price of $31,808, the company was spending $10 million in BTC.

MicroStrategy clearly does not agree with Guggenheim’s investment analysis. Scott Minerd fears that Bitcoin’s value will overheat and decline significantly in the near term.

On January 22, CEO Michael Saylor announced a new investment in crypto-active on the contrary. The company now holds an additional 314 BTC following a purchase on the market for an average price of 31,808 dollars.

And according to the executive, the purchase is, like the previous ones, part of MicroStrategy’s cash reserve policy. The publisher is not a typical investor. At the end of 2020, it was indebted $650 million to acquire even more Bitcoin.

In total, therefore, the company owns approximately 70,784 Bitcoin, or more than $2 billion. And even at a price of 31,808 dollars, it is making a capital gain for the time being. According to the CoinDesk and Cointelegraph price indexes, the BTC is currently trading at around $33,000.

Michael Saylor, however, is not interested in the asset from a short-term speculative perspective. He insists on its long-term value and its advantages as a cash reserve.

This strategy is also praised by a famous investment fund, Miller Value Partners. Its manager, Bill Miller, explains in a memo that he acquired MicroStrategy bonds in order to gain exposure to Bitcoin.

At the time of MicroStrategy’s bond issue, the fund acquired 0.75% of MicroStrategy’s bonds. And the reason for this investment was Bitcoin. “According to our assessment, there was very little downside and an almost free call option on Bitcoin,” says Miller.

“MicroStrategy now owns more Bitcoin than any other operating company, which gives it a scarcity value beyond the value of its core business and the tokens it holds,” the investor added.

As for the concerns raised by the high volatility of crypto-active since the beginning of 2021, it does not seem to worry the investor unduly. “Not owning Bitcoin has been a huge mistake, and we hope this will continue to be true,” he concludes.