Why Is MicroStrategy’s $400 Million Bitcoin Purchase Unique?

June 8, 2021

drop a forthcoming Ethereum exchange

MicroStrategy, a cloud software business, stated today that it plans to buy an extra $400 million in Bitcoin to add to its existing treasury of 92,079 BTC ($3.3 billion). It also revealed that Bitcoins will be handled by MicroStrategy, a new business.


At the present price of $400 million, the company could buy another 11,215 shares. MicroStrategy is going back to its old tactics and selling bonds to raise the money for the transaction.


Bitcoin’s price has dropped from an all-time high of $63,501 on April 12 to under $35,600 today. While some of the impairment loss might be attributed to obscure accounting standards, it’s clear that MicroStrategy’s Bitcoin investment is no longer lucrative.


On the other hand, it appears to have paid off in the long run. MicroStrategy bought Bitcoin at an average price of $24,450 per BTC, according to the company. MicroStrategy has recovered over $1 billion in unrealized gains despite Bitcoin’s sluggish spring.


But MicroStrategy CEO Michael Saylor isn’t planning to sell, as Tesla did earlier this year with some of its $1.5 billion Bitcoin investment in an effort, according to Elon Musk, to establish Bitcoin’s liquidity. Saylor has made it obvious before, and he did so again last weekend when he stepped on stage at the Bitcoin 2021 conference in Miami and hugged Bitcoin podcaster Max Keiser after Keiser exclaimed, “We’re not selling! Fuck Elon!” 


With an estimated 72 percent of its treasury in Bitcoin, the publicly traded company’s shares are the closest thing to a Bitcoin ETF on the US market. It will further entangle its destiny with Bitcoin’s with this fresh purchase. Expect more purchases shortly.


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