Why Did MicroStrategy Invest So Much Money Into Bitcoin?

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MicroStrategy
MicroStrategy

Recently MicroStrategy announced that it has bought just over $1 billion worth of bitcoin. This purchase of 19,452 bitcoins puts the company holdings of the digital token at 90,531. The company has stated that the average purchase price of all its bitcoin is $23,985 per digital token.

As per the recent news announcement that MicroStrategy purchased its first bitcoin in August using the existing cash on its balance sheet to acquire cryptocurrency. It has since completed two convertible debt offerings to raise capital to finance additional purchases. The most important offering was completed last week, generating approximately over $1.03 billion in net proceeds and the notes bear 0% coupon rate.

The MicroStrategy comes into this decision to purchase bitcoins as the price of bitcoin surged back over $50,000 on Wednesday. But later in started dripped below that level.

A Brief of MicroStrategy

Based out of Virginia, MicroStrategy is a software enterprise company that offers business intelligence. Mobile software and cloud-based services. This company is responsible for integrating analytics skills into the apps that we use in iPhone, iPad, and Android, and BlackBerry devices.

Michael Saylor, the CEO of the company has been stated that they have been an avid & vocal crypto enthusiast since their early years. His support for Bitcoin predates even the Elon Mask decision to accept bitcoin as a payment method. Tesla’s disclosure about buying $1.5 billion worth of Bitcoin; brings the spotlight to an interesting Twitter exchange between both the CEOs involving the merits of crypto assets.

As per the announcement stated by MicroStrategy on Wednesday, the average purchase of all its bitcoin purchases is $23,985 per digital token; it has spent nearly $2.171 billion to purchase this bitcoin. As the pricing of bitcoin surges on Wednesday, the overall firm’s holdings were worth nearly $4.5 billion.

And this has increased MicroStrategy’s shares higher than 6% early in Wednesday’s session. The company’s stock tanked over 20% Tuesday as the price of bitcoin slid. MicroStrategy’s stock has been on a tear, but once the company announced the purchase of its initial bitcoin purchase in August; their shares started rising over 400%. And this makes some investors flocked to the shares to gain exposure to the cryptocurrency.

Michael Saylor, MicroStrategy’s CEO has become the leading ambassador for bitcoin; by calling on other companies to buy digital tokens as a part of their investment. On Tuesday, the CEO of MicroStrategy stated that they believe that bitcoin will take the bigger place on market value as $100 trillion. According to CoinDesk, as of Wednesday, Bitcoin has a total market cap of roughly $920.85 billion.

Since the Bitcoin investment in August 2020, MicroStrategy’s company stock has leaped by 364%. Also, the CEO of the company insists on investors buying more Bitcoins for their corporate treasury. This has worked out so far for MicroStrategy, he says, and led to substantial increases in revenue and shareholder returns.

If you’re looking to invest in Bitcoin, then it’s really going to give fruitful benefits! Stay tuned with us to get more interesting facts on Bitcoin Investment!