MicroStrategy Increases Bitcoin Investment: A Milestone with Implications

Eulerpool Research Systems Dec 18, 2024

Takeaways NEW

  • Inclusion in the Nasdaq 100 could further increase institutional interest.
  • MicroStrategy has acquired 15,350 Bitcoin worth 1.5 billion US dollars.
MicroStrategy recently made a significant move by acquiring 15,350 Bitcoin, once again bringing the company into the spotlight within the technology world. The purchase, valued at approximately USD 1.5 billion, was made at an average price of USD 100,386 per Bitcoin. This raises the company's Bitcoin holdings to an impressive 439,000 BTC, equivalent to a market value of over USD 45 billion. This latest investment was financed through the sale of 3,884,712 Class A shares. In total, MicroStrategy has invested USD 27.1 billion in Bitcoin to date, with an average price of USD 61,725 per Bitcoin. Market sentiment surrounding the company is high, as MicroStrategy's market value has reached USD 92 billion, with its shares trading at a remarkable premium to their Bitcoin net asset value. Michael Saylor, Executive Chairman of MicroStrategy, is known for his optimistic stance on Bitcoin. He strongly believes in acquiring Bitcoin at significantly higher prices in the future. In this context, the company uses a unique metric called Bitcoin Yield, which measures Bitcoin growth relative to shares issued. As of December 15, Bitcoin Yield stood at a remarkable 72.4% this year. Furthermore, MicroStrategy's inclusion in the Nasdaq 100 on December 23 is considered a significant milestone. Analysts anticipate a substantial increase in institutional interest as ETFs such as QQQ will include the stock. According to Bloomberg analyst James Seyffart, this could lead to stock purchases worth at least USD 2.1 billion. MicroStrategy has already experienced a stock price increase of over 490% this year. These developments could gain further momentum from upcoming changes in accounting for digital assets in 2025. These new rules will allow companies to record gains from rising Bitcoin prices, improving financial transparency. Analysts see this as an opportunity for MicroStrategy to potentially qualify for the S&P 500 Index. Despite some investors' remaining skepticism regarding Bitcoin price volatility, the strategy is recognized by many as a long-term oriented approach that promotes institutional investment.

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