MicroStrategy’s HODL strategy continues to benefit investors, with the company announcing the acquisition of an additional 3,000 bitcoins, totaling $155 million between February 15 and February 25. As of now, MicroStrategy and its subsidiaries collectively hold approximately 193,000 bitcoins valued at $11 billion.
The company’s chairman and former CEO, Michael Saylor, highlighted the latest bitcoin purchase, emphasizing that MicroStrategy’s average acquisition price stands at $31,544, while the current market price of bitcoin is just under $57,000 as of Tuesday.
Following this announcement, MicroStrategy’s shares witnessed a 16% surge on Monday and an additional 10% increase on Tuesday, closing at $871.80. Despite being primarily involved in enterprise software and cloud-based services, MicroStrategy’s market value is significantly influenced by its substantial bitcoin holdings, effectively making it a key player in the cryptocurrency market.
During the recent earnings call on February 7, CFO Andrew King emphasized MicroStrategy’s commitment to its bitcoin acquisition strategy, asserting its position as the largest corporate holder of bitcoin globally.
Bitcoin has seen a 35% surge in value this year, reaching its highest point since December 2021, while Ether, the second-largest cryptocurrency, has experienced a 42% increase in 2024, reaching around $3,250 on Tuesday.
Investors’ optimism in the bitcoin market has grown, especially after the SEC’s approval of multiple spot bitcoin exchange-traded funds (ETFs) last month. Bitcoin has gained 24% since the introduction of new ETFs on January 11, attracting substantial capital inflows.
The upcoming “halving” event in April, which occurs every four years and reduces the production of bitcoin by half, is also contributing to positive market sentiment. Historically, such halving events have preceded bull runs in the bitcoin price.
MicroStrategy initially announced its plan to invest in bitcoin in mid-2020, committing $250 million over the next 12 months. Since then, the company has experienced a significant increase in bitcoin holdings and witnessed substantial growth in its market cap, reaching almost $15 billion.
Analysts see MicroStrategy’s unique value proposition, as the company has the capability to acquire bitcoin through debt and equity issuances. TD Cowen analysts expect these bitcoin transactions to be accretive to shareholders, highlighting MicroStrategy’s transition from a defensive to an opportunistic strategy for creating shareholder value.
