MicroStrategy’s Bitcoin Strategy Sets Tongues Wagging Even As It Doubles Down On BTC Purchases

MicroStrategy, the world’s largest corporate holder of Bitcoin reserves, has continued to splash cash towards BTC purchases ignoring cynics and the industry’s chaos created by the stunning collapse of FTX.

MicroStrategy Buys More BTC

In a Dec 28 filing with the Securities Exchange Commission (SEC), the business intelligence company disclosed it had purchased 2,395 bitcoins for approximately $43 million between Nov 1, 2022, and Dec 21, 2022.

More interestingly, it revealed that it sold 704 BTC on Dec 22 to help it take advantage of the various US tax benefits given bitcoin’s vanished value since it first started acquiring the cryptocurrency in 2020. Notably, it later bought back 810 bitcoins at $16,845 per coin on Dec 24.

The latest purchase now brings MicroStrategy’s holdings to approximately 132,500 BTC acquired at a total cost of around $4.03 billion and an average purchase price of approximately $30,397 a coin.

Crypto Community Puzzled At BTC Purchases

Whereas calls to purchase BTC at current discounted prices have been rising among crypto users, not everyone is stoked by MicroStrategy’s Bitcoin strategy.

In the wee hours on Saturday, Michael Saylor, the company’s founder and former CEO, shared a Bitcoin performance chart from 2020, tweeting;

“The Bitcoin Strategy is winning for MicroStrategy.”

The tweet, which has since garnered close to a million views, has received mixed reactions, with most comments suggesting most crypto adherents have lost hope in his bitcoin acquisition strategy.

“Microstrategy Bitcoin holdings are down 45%, which is almost the worst performer here. This chart assumes he went all in on Bitcoin at the date provided. In reality, he’s just been averaging in as everything crashes which defeats the point of this graphic,” Fellow trader Nebraskan Gooner commented on the chart. 

“$MSTR is down 90% from the high, has over 1 billion unrealized loss on the bitcoin, and has over $700 million debt to get those BTC. If that’s winning to you then I don’t want to know what losing means to you,” another wrote.

With Bitcoin trading at around $16,966 at press time, MicroStrategy’s stash would now be worth just over $2.24 Billion, translating to an unrealized loss of about $1.79 billion.

Moreover, apart from debts owed to creditors for the purchase of Bitcoin, shares of MicroStrategy have continued to tumble, dropping nearly 50% following the FTX debacle.

Despite the downturn, MicroStrategy, which turned to bitcoin in 2020 as a hedge against inflation, remains unwavering, with Michael Saylor stressing that they will never sell their Bitcoin. Saylor, who has previously revealed he owns 17,732 bitcoins, believes that the world most traded cryptocurrency is “unstoppable” and that, ultimately “, Bitcoin is the separation of money and state”.