This ogre devours BTCs by the thousands
In early December, MicroStrategy announced the issuance of the Bitcoin Bond (BTC), which raised $550 million. This plan has now been implemented, resulting in a truly colossal bitcoin position for the company.
Nearly 30,000 new BTCs paid off, ruby on the nail
MicroStrategy reported in a press release on its website that it has invested a total of $650 million in the purchase of Bitcoins.
The Nasdaq-listed company purchased them at an average price of approximately $21,925 per bitcoin, resulting in the acquisition of an additional 29,646 BTCs. As of December 21, the date of the press release, MicroStrategy has now held a total of 70,470 Crypto Engine, or more than $1.6 billion at the time of writing.
„The acquisition of additional Bitcoins announced today reaffirms our belief that Bitcoin, as the world’s most widely adopted cryptography currency, is a reliable store of value. We believe that the proactive management of our balance sheet, in addition to improving the company’s revenues and profitability, have been important factors in our recent share price appreciation. »
Michael Saylor, CEO of MicroStrategy
Bitcoin, a sure value for preserving cash flow?
With an average cost of exactly $15,964 per Bitcoin for all of these purchases in 2020, MicroStrategy has already realized a handsome appreciation against the dollar of about 45%.
This is exactly what the company is looking to do again, as its CFO, Phong Le, explains. Le explains that MicroStrategy continues to believe that Bitcoin will „provide better returns“ and „preserve the value“ of the company’s capital over time, unlike holding fiduciary currencies such as the dollar.
The executive also stated that his company „will continue to evaluate the use of net profits“ for possible new investments in Bitcoin in 2021.
As a result of MicroStrategy’s large position in Bitcoin, its share price appears to have benefited, as some stock market investors may be exposed (indirectly) to the king of crypto. It’s quite a gamble, but it’s a double-edged sword. Indeed, even if the price of BTC enters a new upward trend, it has already accustomed us to very strong corrections. In such an eventuality, the MicroStrategy stock could well suffer.