MicroStrategy Adds $10M Worth of Bitcoin, Defying Bearish Fears

Publicly-traded business intelligence company MicroStrategy has purchased an additional 480 bitcoins (worth $10 million). The latest purchase brings the company’s total holdings to 129,699 BTC (worth around $2.6 billion at today’s prices).

MicroStrategy has spent a total of $3.98 billion on its bitcoin investment, averaging $30,664 per BTC. The cryptocurrency currently hovers around the $20,000 mark, representing a nearly $1.4 billion unrealized loss for the company.

However, today’s purchase shows the company’s ‘underwater’ Bitcoin position has not stopped it from increasing exposure to the asset class. Instead, it reinforces earlier comments by CEO Michael Saylor, who said earlier this month that the current bearish market presents the best investment opportunity for investors.

MicroStrategy Buys More Bitcoins Despite Liquidation Gossip

The largest known corporate holder of bitcoins has recently been the subject of several reports suggesting it might come under pressure for using leverage to purchase BTC earlier this year. Recall that a MicroStrategy subsidiary had accessed a $205 million credit line to acquire even more coins. The loan deal uses a portion of MicroStrategy’s bitcoin stash as collateral, introducing a leveraged risk if bitcoin’s price goes under $21,000.

However, Saylor has since clarified that the company could supply more collateral to avoid liquidation, a move that has supposedly occurred since bitcoin slipped below the credit line’s margin call level. Bitcoin’s price must drop to around $3562 for MicroStrategy’s entire BTC holding to come under liquidation risk, the CEO noted.

The latest $10 million purchase, while relatively small (compared to the company’s entire bitcoin stack), pushes the seemingly unreachable margin call further lower. It also typifies MicroStrategy’s commitment to its corporate Bitcoin treasury strategy, despite fears that the bearish price trend might continue amid growing macro tension.