Tag: microstrategy

Software Firm MicroStrategy Buys Bitcoin Worth $615.7 Million Ahead of SEC’s Spot ETF Decision

Software firm MicroStrategy said on Wednesday it had bought bitcoin worth about $615.7 million (Rs. 5,120 crore) in cash, amid growing expectations that the top US markets regulator will soon approve a spot bitcoin exchange traded fund (ETF).

The company and its subsidiaries purchased about 14,620 bitcoins at an average price of roughly $42,110 (roughly Rs. 35 lakh) between November 30 and December 26, according to a regulatory filing.

Shares of the Virginia-based company jumped 8 percent in afternoon trading. MicroStrategy has surged over 350 percent this year, while bitcoin has gained nearly 160 percent.

MicroStrategy’s move to buy bitcoin to protect the value of its reserve assets has helped strengthen the appeal of the firm’s stock, which tends to move in tandem with the digital asset.

“This is not a short-term trading strategy but rather reflects a belief that bitcoin will ultimately prove a superior store of value,” said analysts at TD Cowen.

“The company remains an attractive vehicle for investors looking to gain bitcoin exposure,” the brokerage added.

In recent months, a spate of filings, including from traditional finance heavyweights like BlackRock have revived the crypto markets which had been crushed after several high-profile firms such as Sam Bankman-Fried’s FTX collapsed.

A spot crypto ETF would track the market price of the underlying crypto asset, giving investors exposure to the token without having to buy the currency.

MicroStrategy, which began buying the cryptocurrency in 2020, said it together with subsidiaries now holds about 189,150 bitcoins bought for about $5.9 billion (roughly Rs. 49,065 crore).

The company has said its bitcoin investments are intended as long-term holdings and that it expects to continue to accumulate the world’s biggest and best-known cryptocurrency.

“Due to its limited supply, bitcoin offers the opportunity for appreciation in value if its adoption increases and has the potential to serve as a hedge against inflation in the long-term,” the company said in its latest quarterly report.

© Thomson Reuters 2023

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Michael Saylor Steps Down as MicroStrategy CEO to Focus on Bitcoin Acquisition Strategy

Cloud software company MicroStrategy has announced that Michael Saylor, a Bitcoin maximalist who has served as the company’s chief executive officer since 1989, will step down as CEO and transition to a new role of executive chairman to focus even more significantly on the firm’s Bitcoin holdings. Phong Le, the company’s president, will assume the role of CEO at MicroStrategy after Saylor, which is currently the public company with the largest Bitcoin treasury. The changes take effect starting Monday, August 8.

Saylor stated in a press release that as executive chairman, his focus will be solely on “Bitcoin acquisition strategy and related Bitcoin advocacy initiatives.” At the same time, Le will manage the company’s day-to-day operations.

Saylor had been Microstrategy’s CEO since its creation, while Le, who joined the company in 2015, has served as President since July 2020. The press release credited Le with “delivering one of the [company’s] best operational and financial years” in 2021.

In 2000, Saylor famously lost $6 billion (roughly Rs. 48,008 crore) in a single day after the US Securities and Exchange Commission (SEC) brought charges against his company. His company managed to capture the spotlight after adopting Bitcoin as its reserve asset in a surprise move in August 2020.

Microstrategy was the first publicly listed business to start acquiring Bitcoin as part of its treasury, which paved the way for other tech companies such as Tesla to add the cryptocurrency to their own balance sheets.

While Tesla sold its Bitcoin holdings in the recent market downturn, today’s earnings report indicates that as of June 30, MicroStrategy still held 129,699 Bitcoin, a sum worth approximately $2.98 billion (roughly Rs. 23,844 crore) dollars at current prices.

The firm has consistently refused to alter its outlook on the digital asset, despite the price of Bitcoin plunging below $30,000 (roughly Rs. 24 lakh) in May, which meant MicroStrategy was in the red on its average purchase price.

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MicroStrategy’s Michael Saylor Believes Bitcoin’s Current Volatility Is Irrelevant

MicroStrategy CEO Michael Saylor claims that Bitcoin’s near-term volatility is largely irrelevant once you understand its fundamentals and how difficult it would be to create something better. In an interview, Saylor said that he isn’t perturbed by Bitcoin’s price swings in recent times while adding that BTC has to fall at least 95 percent for the company to consider selling any of its accumulated reserves. Saylor further added that people who have invested at least $100 (roughly Rs. 7,770) in Bitcoin can speak about it but others shouldn’t have any opinion about it.

“Bitcoin is the most certain thing in a very uncertain world, it’s more certain than the other 19,000 cryptocurrencies, it’s more certain than any stock, it’s more certain than owning property anywhere in the world,” he said in an interview with The Block.

Many analysts have been saying that Bitcoin and the broader crypto market have entered a bear market. Commenting on it, the MicroStrategy CEO said he wouldn’t like to focus on near-term prices.

“I don’t know if it’s a bear market or not, but if it is a bear market, then we had three of them in the last 24 months. If you’re not planning to hold it for four years, you’re not really an investor at all, you’re a trader, and my advice for traders is don’t trade it, invest in it,” he added.

MicroStrategy started adding Bitcoin to its balance sheet back in August 2022. In less than two years it has already amassed 129,218 Bitcoins. Currently, Bitcoin is trading close to the company’s average purchase price of $31,537 (roughly Rs. 24.5 lakh).

Michael Saylor also happens to be one of the most bullish people on Bitcoin and its future. Right in the mid of a heavy market correction in May 2022, Saylor spoke to Yahoo Finance recently where in an interview, he said that his company will continue to buy Bitcoin forever.

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