Once Again Hinting at Increasing Holdings of Bitcoin, Analyze MicroStrategy’s Strategy for Buying Coins

[TL；DR]:

MicroStrategy founder Michael Saylor hinted that he would increase his Bitcoin holdings for the tenth consecutive week. He has currently purchased 447,470 Bitcoins, with an average holding price of $62,473 per Bitcoin.

Since 2020, MicroStrategy has shifted its corporate strategy to the crypto market, achieved strategic transformation by purchasing large amounts of Bitcoin, and achieved significant success in the financial market.

MicroStrategy’s success has inspired a wave of imitations from other listed companies and increased the global recognition of cryptocurrencies, but it is also accompanied by risks and challenges, such as price volatility and uncertainty in regulatory policies.

Introduction

Since 2020, in the global liquidity crisis caused by the COVID-19 pandemic, MicroStrategy (hereinafter referred to as “MicroStrategy”) has boldly shifted its corporate strategy to the crypto market with its deep insight into the value of Bitcoin. Through a series of sophisticated capital operations, it has successfully transformed itself from a software company to a crypto giant.

This article will comprehensively analyze MicroStrategy’s Bitcoin strategy and reveal its logic and mystery.

Buy Bitcoin Every Monday? This is the 10th Week

On Monday, MicroStrategy founder and CEO Michael Saylor tweeted, as usual, amid continued weakness in the crypto market, “Is there a green dot missing on the MicroStrategy portfolio tracking chart?” This is the tenth consecutive week that he has released an investment tracking chart to hint at increasing his holdings of Bitcoin.

It is well known that on Saylor’s Twitter, the MicroStrategy portfolio tracking chart has been using blue lines to mark the price trend of Bitcoin, and green dots to mark the increase in holdings on the chart. This Monday was the tenth consecutive week that Michael Saylor released information about the MicroStrategy portfolio tracking chart. According to previous rules, MicroStrategy always increased its holdings of Bitcoin the day after the relevant news was released.

Source: @saylor

Not surprisingly, as of Tuesday, the day of writing, MicroStrategy had indeed acquired 2,530 BTC for approximately $243 million.

Source: @saylor

Michael Saylor has become a staunch supporter of Bitcoin since 2020. During the COVID-19 pandemic, in the face of the global liquidity crisis and the risk of currency depreciation, Saylor re-examined the value of Bitcoin and believed that it was a safe-haven asset that was not linked to legal cash flow. Therefore, he led MicroStrategy on a bold path to buy Bitcoin.

First, in August 2020, MicroStrategy spent $250 million to purchase 21,400 bitcoins for the first time, marking the company’s official entry into the crypto market.

Subsequently, MicroStrategy invested $175 million and $50 million in September and December of the same year, respectively, to purchase more Bitcoin, further consolidating its position in the crypto market.

In the following four years, to expand its Bitcoin holdings, MicroStrategy raised funds to purchase Bitcoin through various means such as issuing convertible bonds and issuing additional shares. As of January 14, 2025, a total investment of more than $27.7 billion has been made to purchase 450,000 Bitcoins, with an average holding price of $62,661 per Bitcoin.

Source: bitcointreasuries.net

Meanwhile, MicroStrategy’s Bitcoin purchase strategy has formed a close interactive relationship with Bitcoin’s price. Whenever the price of Bitcoin rises, the value of MicroStrategy’s holdings also increases, which in turn drives up the company’s stock price. On the other hand, when the price of Bitcoin falls, the value of MicroStrategy’s holdings will also decrease, putting some pressure on the company’s stock price. However, MicroStrategy has not only increased its Bitcoin holdings through continuous financing purchase strategies, but also effectively smoothed stock price fluctuations.

MicroStrategy’s Five Tactics of Borrowing Money to Buy Cryptocurrencies

MicroStrategy has successfully achieved large-scale holdings of Bitcoin through a series of sophisticated capital operations. These methods have not only brought significant returns on investment to the company, but also profoundly affected the company’s market position and stock price performance.

-Purchase with own funds: MicroStrategy initially used idle funds on its books to purchase Bitcoin, which was its first step into the crypto market.

-Issuing Convertible Preferred Notes: MicroStrategy has raised a large amount of funds to purchase Bitcoin by issuing convertible preferred notes. These bonds allow investors to convert them into company shares under certain conditions, providing companies with low-cost financing. For example, in December 2020, MicroStrategy raised $650 million to purchase Bitcoin by issuing convertible bonds.

-Issuance of senior secured bonds: In addition to convertible senior bonds, MicroStrategy also issued senior secured bonds to raise funds. This type of bond is secured by the company’s assets and has relatively low risk, but the interest rate is also relatively low.

-Market-Priced Stock Issuance: As MicroStrategy’s Bitcoin strategy began to show results and the company’s stock price continued to rise, MicroStrategy began to raise funds by issuing additional shares. Although this method will dilute the interests of existing shareholders, it is less risky and more flexible; in addition, due to the expected appreciation of Bitcoin, this dilution is interpreted by the market as an appreciation of asset value, which drives up the company’s stock price.

-Bank loans: MicroStrategy is also actively involved in lending, using its own Bitcoin as collateral to borrow funds from financial institutions. This “borrowing chickens and eggs” strategy enables MicroStrategy to seize more investment opportunities in the volatile Bitcoin price market.

In fact, as MicroStrategy’s Bitcoin holdings continue to increase, MSTR’s stock price has also significantly increased. Since 2020, MicroStrategy (MSTR.US) has soared from around $20 to hundreds of dollars, an increase of more than 20 times. This outstanding performance has not only made MicroStrategy famous in the crypto market, but also attracted the attention of the traditional financial market.

Source: Investing.com

At the end of 2024, MicroStrategy was successfully included in the Nasdaq 100 Index, becoming the 40th largest company in the index. This means that MicroStrategy is expected to bring in about $2.093 billion in passive buying funds, and some analysts even believe that it is expected to be included in the S&P 500 Index in June 2025, thereby driving the company’s stock price to rise further.

MicroStrategy’s Follow-up Effect May Continue to Release Bitcoin’s Value

MicroStrategy’s successful Bitcoin strategy has inspired a wave of imitations from other public companies.

-Block (formerly Square): The company behind the payment platform began buying Bitcoin in 2020 and continued to increase its holdings in the following years. As of the latest data, Block holds more than 8,000 BTC.

-Rumble: Video streaming platform Rumble announced in November 2024 that it would invest up to $20 million in digital assets such as Bitcoin, aiming to reshape itself as the crypto community’s go-to platform.

-LEEF Brands: This cannabis company announced in December 2024 that it would adopt Bitcoin as a treasury reserve asset and planned to raise funds by issuing Bitcoin-backed bonds.

-Semler Scientific: The medical technology company began buying Bitcoin as part of its treasury reserve strategy in 2023 and plans to continue buying more Bitcoin with proceeds from cash sales from operating cash and ATM programs.

-Banzai: Marketing technology solutions company Banzai announced in November 2024 that it would use up to 10% of the company’s treasury funds to purchase Bitcoin to diversify its asset portfolio and profit from the long-term value growth of cryptocurrencies.

-Metaplanet: Japanese hotel development and operation company MetaPlanet plans to increase its Bitcoin holdings to more than 10,000 by 2025, aiming to be among the top 10 Bitcoin holders in the world. Its stock price has also risen.

Source: Investing.com

From a more macro perspective, the Bitcoin purchases of MicroStrategy and its followers not only stimulated the growth of their own stock prices, but also increased the global recognition of cryptocurrencies, led by Bitcoin, reflecting the global financial market’s attention and interest in emerging asset classes such as cryptocurrencies. Especially for those forward-looking and innovative companies, the crypto market is already full of opportunities.

Source: @saylor

However, MicroStrategy’s Bitcoin investment strategy is not without risks and challenges. With the volatility of Bitcoin prices and the intensification of market competition, MicroStrategy needs to constantly adjust and optimize its investment strategy to cope with potential risks and challenges. In addition, the uncertainty of regulatory policies may also hurt the company’s Bitcoin strategy.

To summarize, MicroStrategy’s Bitcoin investment strategy is undoubtedly a business model case full of challenges and opportunities. Its successful experience and market influence not only provide useful references for other companies but also have a far-reaching impact and enlightenment on the entire crypto market and even the traditional financial market. As the market continues to develop and improve, we believe that MicroStrategy’s positive spiral strategy of purchasing stocks, bonds and coins will continue to play its unique value and role, bringing investors more challenges and opportunities.