MicroStrategy invests $623 million in Bitcoin, now owns over 1% of global supply MicroStrategy invests $623 million in Bitcoin, now owns over 1% of global supply
MicroStrategy's MSTR stock has declined by more than 16% during the past day despite the latest Bitcoin purchase.
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Updated: Mar. 19, 2024 at 3:01 pm UTC
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Bitcoin development and Business intelligence firm MicroStrategy has bought more than 9,000 BTC for $623 million, according to a March 19 filing with the US Securities and Exchange Commission (SEC).
According to the filing:
“MicroStrategy acquired approximately 9,245 bitcoins for approximately $623.0 million in cash, using $592.3 million of proceeds from the Offering and $30.7 million of Excess Cash.”
With this latest acquisition, the company has bolstered its Bitcoin holdings to 214,246 BTC. These were procured at an aggregate purchase cost of roughly $7.53 billion, averaging about $35,160 per BTC. The current market value of the company holdings stands at approximately $13.39 billion.
In recent weeks, the Bitcoin development firm has secured substantial funding, amassing over $1.4 billion through debt offerings used to acquire the flagship digital asset.
These purchases align with bullish statements from Michael Saylor, the company executive chairman, about the top digital asset. He recently said Bitcoin will surpass gold as the world’s most valuable commodity, pointing out that BTC has “all of the great attributes of gold, but none of the defects,โ
Notably, JPMorgan analysts recently cautioned that MicroStrategy’s reliance on debt to purchase Bitcoin could exacerbate a market downturn.
MSTR shares decline
Meanwhile, MicroStrategy’s latest acquisition has propelled its Bitcoin holdings to more than 1% of the flagship digital asset’s total supply, establishing a pronounced correlation between Bitcoin’s performance and the company’s MSTR stocks.
This correlation is more pronounced today as Bitcoin’s price has declined by more than 6% to around $63,000. In comparison, MSTR shares also plunged by 16% to under $1,300, prompting concerns among analysts regarding the stock’s overvaluation due to its dependence on Bitcoin.
Alpha Spread analysts estimate a staggering 94% overvaluation, assigning an intrinsic value of $84.97 to MSTR. The analysts highlighted the company’s pivot towards a Bitcoin-centric approach over its core business.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Liam 'Akiba' Wright
Also known as "Akiba," Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
MicroStrategy
MicroStrategy (Nasdaq: MSTR) is a worldwide leader in enterprise analytics and mobility software.
JPMorgan
JPMorgan Chase & Co is a global leader in financial services, offering solutions to the world’s most important corporations, governments, and institutions in more than 100 countries.
Michael Saylor is the Executive Chairman, founder, and principal shareholder of MicroStrategy.