MicroStrategy, led by Michael Saylor, started buying Bitcoin (BTC) in August 2020 and has poured billions of dollars into the flagship cryptocurrency. Since adopting the Bitcoin strategy, shares of MicroStrategy (MSTR) and BTC have outperformed any other asset class.
MSTR & BTC Outperformed Other Assets in the Past Three Years
A recent chart revealed that both asset prices were bigger than any other asset class in the past three years. Specifically, MSTR and BTC rose by 254% and 145%, respectively, during that period. Conversely, S&P 500 rose 37% while Nasdaq increased 31%. Gold, Silver, and Bonds fell 3%, 14%, and 18%, respectively. The rise in MicroStrategy stock likely coincides with BTC price appreciation over the last three years, as the company is inarguably the largest corporate holder of the digital asset.
Since adopting the Bitcoin strategy, MicroStrategy has acquired 152,800 BTC worth $4.43 billion at current prices. This represents roughly 0.725% of the total supply of bitcoin. MicroStrategy bitcoin holdings were bought at an average price of $29,672 per BTC. From April through June alone, the company added $361 million worth of BTC to its portfolio for an average price of $28,233.
MicroStrategy’s Bitcoin Strategy
MicroStrategy uses a unique strategy in which it raises debt capital to fund its bitcoin acquisition. The company’s bitcoin purchase is also partly funded by proceeds from selling its shares. As of the second quarter of this year, the company issued and sold shares that brought in proceeds worth $333.7 million. Earlier this month, the Tysons Corner, Virginia-based company, also announced plans to sell over $750 million to fund more bitcoin acquisitions.
While the consistent purchase reinforces MicroStrategy’s position as the largest corporate holder of Bitcoin, the company’s investment in the digital asset is currently in the red, with a paper loss of approximately $1 billion.
At the time of writing, BTC was trading around $29,000. On the other hand, the shares of MicroStrategy were trading at $372.
