MicroStrategy is one of the world’s leading business intelligence and analytics firms on the planet. The company, incorporated in the US primarily, is a brand that many in the Fortune 500 admire, thanks to their two-stroke strategy of developing their analytics arm and acquiring and holding Bitcoin. And it’s the latter that comes to the fore in their latest press release.
On June 21, 2021, MicroStrategy announced it had purchased 13,005 bitcoins. The global enterprise shelled out $489 million in total to complete the transaction, paying around $37,617 for each bitcoin, with the price inclusive of all fees and expenses.
It means at present, MicroStrategy is holding approximately 105,085 bitcoins in their reserves, with a combined purchase price of over $2.7 billion. It works out at $26,080 per bitcoin. MicroStrategy also has a subsidiary outfit, MacroStrategy, and they hold over 92,000 of the group’s bitcoins.
Many companies have been unwilling to dive into the cryptocurrency game, preferring to watch from the sidelines to see what happens as things progress. However, MicroStrategy’s decision to jump in with both feet first brought the firm to many people’s attention and put them firmly on the radar.
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In August 2020, the company completed a purchase of 21,454 bitcoins, describing it as a “capital allocation strategy.” In total, they threw $250 million at the deal, and they continue along this path with their recent acquisition. It’s a sign of their belief in the world’s leading crypto.
MicroStrategy’s decision last year, and their latest move, are somewhat novel for what is a large company trading publicly. The usual approach for publicly traded businesses is that any surplus capital available to the company is put into alternative investment opportunities, bonds and the like.
So, plunging significant amounts of cash into Bitcoin, and cryptocurrencies in general, is revolutionary. But, the deeper MicroStrategy get into the crypto world and the success they will potentially have, could spur other companies to follow suit.
At the time of their original investment, MicroStrategy insisted that their decision to purchase bitcoin allows them a “reasonable hedge against inflation” while offering “the prospect of earning a higher return than other investments.” And it makes sense because there is the opportunity to turn a significant profit where Bitcoin is concerned, considering the value is up over 200% in the last twelve months, and 30,000% since BTC came to the fore.
While the market is down at present, there is a belief it will bounce back, and in doing so, MicroStrategy’s decision will prove to be an excellent investment.
The company, which has been around since 1989. They work with iconic brands such as Adidas and Pepsi, IBM and Oracle, and will likely continue on their current path, regardless of what is happening in the crypto world. Time will tell whether they have made the correct investments at the right time, but they appear sure of themselves that they’re on the right track.