MicroStrategy is relentless with its Bitcoin purchases, having recently spent over $29 million on over 1,000 BTC.
MicroStrategy (NASDAQ:MSTR) has continued to accumulate more Bitcoin and has bought an additional 1045 BTC. The business intelligence firm announced that it spent $29.3 million on the recent purchase, at an average of $28,016 per Bitcoin. according to a cheep From co-founder and CEO Michael Saylor, MicroStrategy’s portfolio now holds 140,000 Bitcoins. The company spent a total of $4.17 billion at an average of $29,803 per coin.
The American intelligence company has been buying Bitcoin for a few years. His first purchase was in August 2020, when he spent about $250 million on 21,000 Bitcoins. At the time, Microstrategy made headlines as one of the first public companies to hold cryptocurrencies as a store of value after transferring funds from its treasury.
MicroStrategy bought more Bitcoin last week and paid off the Silvergate loan
In March, MicroStrategy announced that it purchased 6,455 Bitcoins, spending $150 million in the transaction. The company said it bought Bitcoins at an average of $23,238 per coin over five weeks. At that time, the company had a total portfolio of almost 139,000 Bitcoins.
In addition to buying more Bitcoin, MicroStrategy announced that it prepaid the loan from Silvergate Bank, which collapsed and focused on cryptocurrencies. According to an SEC filing, the company repaid a total of $161 million of the $205 million loan. Following the payment, MicroStrategy received 34,619 Bitcoins as collateral for the transaction started in March of last year. The intelligence firm confirmed that it repaid the loan after raising $339.4 million from the sale of MSTR shares.
MicroStrategy decided to repay the loan even though the payment was not due until the first quarter of 2025. According to the company, Silvergate did not hold any BTC in custody, even though the loan used Bitcoin as collateral. This assured MicroStrategy shareholders that even through the Silvergate bankruptcy, MicroStrategy’s Bitcoin collateral was secure. The firm also allayed fears at a march cheepsaying that aside from the loan, both companies have “no other financial relationship.”
MicroStrategy and Bitcoin
MicroStrategy has been bullish on Bitcoin for a long time. The company has continued to buy the king coin even during bear markets. However, MicroStrategy recently suffered a slight loss after selling some of its Bitcoin.
In December, MSTR hit its lowest level since August 2020 after a Bitcoin sell-off. In this first sale, MicroStrategy downloaded 704 Bitcoins for around $11.8 million. The company said that it sold Bitcoin for tax reasons and confirmed that it bought another 810 Bitcoins two days later. However, MSTR fell 1.1% to $136.63 after the announcement. At the time, the stock was down 75% year-to-date (YTD).
MicroStrategy’s continued purchases of Bitcoin have worried a number of investors. According to Matt Maley, chief market strategist at Miller Tabak + Co, some investors are nervous. Maley said investors expected MicroStrategy to “reduce its holdings” following Salor’s decision to step down as chief executive.
According to a Jefferies analyst, Brent Thill, MicroStrategy may face some problems soon. Thill has said that the company could soon run into liquidity problems because its current position is too leveraged for Bitcoin.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
