I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. Today I will be looking at the recent boom in Bitcoin and how it has led to such substantial increases of unrealised wealth for MicroStrategy and Michael Saylor.
MicroStrategy
The substantial investments made by MicroStrategy in Bitcoin have reaped rewards, with the company's holdings now valued at over $10 billion. Bitcoin rose above $52,000, making the value of the companies steadfast commitment to bitcoin as a long-term store of value and a hedge against inflation even more relevant than ever.
MicroStrategy began its initial foray into Bitcoin back in August 2020, with the company consistently increasing its holdings over the years with continued investment. They have viewed Bitcoin as a key component of its treasury strategy, with the companies executive chairman, Michael Saylor, consistently being vocal in regards to his advocation of Bitcoin. He has been noted as referring to Bitcoin's potential to preserve purchasing power over time. Such has been Saylor’s leadership and belief in its Bitcoin holdings, MicroStrategy purchased an additional 850 BTC for $37.2 million in January 2024 alone.
The fact the company continued to invest and accumulate Bitcoin only highlights its confidence in Bitcoin's ability to deliver superior returns compared to traditional investment assets. The business intelligence company noted last week that they were "the world's first #Bitcoin development company." Data as of the 16th of February 2024 noted that MicroStrategy (Nasdaq: MSTR) were in possession of about 190,000 Bitcoin, valued at $9.88 billion.
The profit margin for the company has been significant, with the acquisition cost of these Bitcoins around $5.96 billion. This represents a 66% appreciation or a gain of $3.92 billion. More historical records paint the real picture of the company, with MicroStrategy's portfolio in decline back on the 11th of June 2023. At that point the company held 140,000 Bitcoin which was valued at $3.631 billion. At the juncture in time their purchase price was $4.206 billion, indicating a 14% depreciation in their investment.
Bitcoin has rebound from the lows of the FTX collapse in November 2022 to crash the market, with its continued gain of mainstream acceptance and recognition as a legitimate asset class intensified by the recent SEC accept of Bitcoin ETFs. As Bitcoin continues to climb towards its previous all-time highs of $69,000 the benefits and rewards are prime from MicroStrategy's decision to allocate a significant portion of its treasury reserves to Bitcoin.
An interesting comparison with Ethereum shows that if MicroStrategy had decided to hold ETH back in June 2023, they would have been ahead by 54% at that time. Their current holdings would be valued at $12.912 billion or a profit of $6.946 billion if they had backed ETH as their investment vehicle. The company could also have reaped further profits from staking the assets held if the portfolio was based solely on ETH, which would have generated around $494 million annually for the company.
MicroStrategy’s stock (MSTR) saw a 16% drop following the introduction of Bitcoin ETFs but Saylor remained steadfast in his commitment to Bitcoin, and even expressed willingness to sell his MSTR shares to acquire more BTC. The pivot from government securities and bonds to Bitcoin for MicroStrategy was motivated by the cryptocurrency’s superior return potential. Saylor will not push the company to change their path from Bitcoin now and MicroStrategy now hold the largest sum of Bitcoin from any publicly listed entity excluding GBTC, while also surpassing the holdings of all nine recently launched Bitcoin ETFs.
MicroStrategy account for nearly 1% of all Bitcoin in existence and it demonstrates the company’s significant stake in the cryptocurrency landscape. Given their likelihood to increase Bitcoin holdings down the line, MicroStrategy will be primed for the future when Bitcoin scarcity increases. Given the number of lost Bitcoin and wallets, MicroStrategy likely own more than 1% of the overall total supply.
Have a great day.
CryptoGod-1.
Referral Links and Follow Me:
