Key Points
- MicroStrategy Inc. has made a $209 million investment in Bitcoin to close out 2024.
- The company has sold shares and entered into sales agreements to facilitate its continued Bitcoin purchasing strategy.
MicroStrategy Inc., a software company from the dot-com era, has ended 2024 with a significant investment in Bitcoin. The company filed a form 8-k with the United States Securities and Exchange Commission (SEC) revealing the purchase of approximately 2,138 Bitcoins, amounting to around $209 million, between December 23 and December 29, 2024.
The company facilitated this latest Bitcoin purchase by selling 592,987 shares under a sales agreement. This investment strategy has allowed MicroStrategy to retain about $6.88 billion in shares, which will be used to further strengthen its long-term Bitcoin strategy.
MicroStrategy’s Bitcoin Strategy
In October 2024, MicroStrategy entered into a sales agreement with TD Securities, Barclays Capital Inc., The Benchmark Company, Canaccord Genuity, and Cantor Fitzgerald. The agreement was to sell its class A common stocks to raise $21 billion, which would be used to buy more Bitcoins.
Through this strategy, MicroStrategy has managed to purchase Bitcoins for eight consecutive weeks, ignoring the volatility of Bitcoin’s price. At the time of writing, the company held about 446,400 Bitcoins, acquired at an aggregate price of approximately $27.9 billion, with an average price of $62,428, including fees and expenses.
MicroStrategy’s continued Bitcoin purchases have resulted in a Bitcoin Yield of 47.8 percent quarter-to-date (QTD), and 74.1 percent year-to-date (YTD). The company uses the Bitcoin Yield as a measure of the ratio between the company’s Bitcoin holdings and its outstanding shares.
Market Impact and Future Outlook
MicroStrategy’s ongoing stock sales to purchase more Bitcoins have caused the value of its stock market to mirror the performance of Bitcoin. Recent data show that MSTR stock has declined over 19 percent in the past month.
The company’s stock market has been significantly impacted by the ongoing Bitcoin price correction. However, a continued Bitcoin price correction could set a precedent for a major bullish uproar in the first quarter of 2025. Moreover, more institutional investors have been purchasing Bitcoins as a hedge against inflation and ongoing fiat devaluations globally.
