MicroStrategy Buys Another $5.4 Billion Bitcoin (BTC)

MicroStrategy (MSTR), the business intelligence firm, has made its biggest Bitcoin (BTC) purchase with the addition of 55,500 BTC.

This historic acquisition came at a cost of approximately $5.4 billion. The average price per the purchased BTC stands at about $97,862. As it announced, the purchase occurred between November 18 and November 24.

MicroStrategy’s Historic Bitcoin Purchase

According to a post on X by Michael Saylor, MicroStrategy’s Executive Chairman, the firm now holds 386,700 BTC. The cumulative cost of this staggering acquisition is $21.9 billion over four years.

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Notably, this acquisition comes after MicroStrategy completed a $3 billion debt offering on November 21. During the same period, MicroStrategy made net proceeds of $2.97 billion.

Also, it scored an additional $2.46 billion from the sales of 5,597,849 MSTR shares.

MicroStrategy planned to offer $21 billion in equity and fixed-income securities over the next three years for $42 billion in capital.

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Out of this amount, the company says about $12.8 billion worth of shares are left for more Bitcoin acquisition.

Strategic Rationale and Bitcoin Yield Performance

This latest Bitcoin buy has shocked many in the market, considering the asset’s value boost. Many investors have wondered about MicroStrategy’s motivation behind buying Bitcoin at such a high price.

Interestingly, MicroStrategy employs a critical performance indicator called the “Bitcoin Yield.” The business intelligence firm uses this to assess the change in its Bitcoin holdings relative to its diluted shares.

Per Saylor, MicroStrategy achieved a 35.2% Quarterly-to-Date (QTD) and a 59.3% Year-to-Date (YTD) yield on its Bitcoin holdings. This indicates significant appreciation in the value of its Bitcoin holding.

The average cost of each Bitcoin MicroStrategy owns is approximately $56,761. This suggests that for its investment in the world’s leading digital asset to remain profitable, its price must stay above $57,000.

Given Saylor’s bullish attitude toward Bitcoin and its future, he will likely not be concerned about a possible price crash.

The Bitcoin advocate has maintained that the future of Bitcoin remains bright and often posts “Bitcoin to the Moon.” Saylor’s iconic remark that depicts his fate on the coin remains;

“If it is not Bitcoin, your money is melting.”

Critics Flay MicroStrategy’s Aggressive Buyup

Despite these optimistic remarks, some financial experts have critiqued MicroStrategy’s aggressive approach to Bitcoin accumulation.

Notable among these critics is Peter Schiff, a vocal opponent of Bitcoin and gold advocate. Schiff especially faulted the rinse-and-repeat approach of raising funds through convertible senior notes to buy Bitcoin.

In his view, those who have invested in MicroStrategy’s MSTR convertible senior notes will suffer huge losses when Bitcoin eventually crashes. This is not the first time that Schiff has predicted a crash in Bitcoin price.

However, the asset has continued to soar and reached new peaks this year.

As of this writing, Bitcoin price exchanged hands at $97,174.31. This is after it had traded at $99,605 in earlier trading over the past week. Many investors still speculate that the coin would breach this ongoing bullish cycle’s $100,000 resistance level.

Even at $97,000, MicroStrategy’s 386,700 BTC holding is worth over $37.5 billion. This puts the company’s profit at a staggering $15.61 billion.