MicroStrategy Bolsters Its Bitcoin War Chest

Fitting, given its recent name change, Strategy — the Michael Saylor company formerly known as MicroStrategy — is thinking really, really big when it comes to bitcoin.

On Monday, the company, a self-styled business intelligence and cloud-based services firm, announced that it had purchased 6,220 bitcoin worth $739.8 million last week. That adds to an already massive stockpile. Massive enough, in fact, that the company now owns roughly 3% of all bitcoin in circulation.

Bit by Bit

In total, Strategy owns 607,770 coins, worth roughly $72 billion as of late Monday. That’s enough to make Strategy the world’s largest corporate owner of the preeminent cryptocurrency, and is the result of a buying strategy (pun intended) that began back in 2020 as the firm sought a hedge against inflation. Along the way, Strategy has funded its bitcoin buying spree by issuing a combination of common and preferred shares, as well as via debt (case in point: the company said last week’s bitcoin purchases were fueled by the proceeds of a roughly $740 million share sale, the vast majority of which were common shares).

The gambit by the so-called bitcoin treasury appears to be paying off so far:

• Shares of Strategy have soared roughly 3,500% since the company began its bitcoin-buying campaign, while the price of bitcoin has soared some 1,100% over the same time.
• That compares with a measly 120% rise in the overall S&P 500 during the same time, according to a recent Bloomberg analysis.

Coming Attractions: The timing of Strategy’s latest bitcoin gains was hardly a surprise. Last week also marked “Crypto Week” on Capitol Hill, with a flurry of pro-crypto industry bills passing in the lower chamber of Congress. Meanwhile, federal officials have been pushing Fannie Mae and Freddie Mac to consider crypto holdings in their mortgage risk assessments, further legitimizing the digital currencies. It’s no surprise, then, that Saylor has already hinted at what the company plans to do next: buy more bitcoin.