MicroStrategy Reveals $42B Plan to Accelerate Bitcoin Accumulation

CEO Phong Le expects this to improve the firm’s treasury strategy, with annual BTC yields projected to be between 6% and 10% in the coming years. On the other hand, Reddit has taken the opposite approach by liquidating most of its Bitcoin and Ethereum reserves because of market fluctuations. Meanwhile, Bitcoin’s price could soar to $100,000 by January 2025, according to 10x Research, especially as rising ETF inflows and Bitcoin’s “black hole effect” draw interest away from altcoins. BlackRock’s Bitcoin ETF saw a record inflow of $872 million on Oct. 30, which certainly proves that the institutional interest in these ETFs is strong and growing. 

MicroStrategy’s $42 Billion Bitcoin Investment Strategy

MicroStrategy announced an ambitious plan to raise $42 billion over the next three years to fund its ongoing Bitcoin acquisition strategy. This initiative is called the “21/21 plan,” and involves raising $21 billion in equity and another $21 billion in fixed-income securities by 2027. The raised capital is expected to facilitate the purchase of close to 578,586 BTC, which is almost 2.7% of the total Bitcoin supply at current prices.

Phong Le, MicroStrategy’s president and CEO, shared some details about the firm’s objective to increase its Bitcoin holdings as part of its treasury reserve strategy to boost returns on its Bitcoin holdings. Le stated that the additional capital will boost their treasury strategy, and provide the company with a more significant BTC yield. So far, the firm already reported a year-to-date yield of 17.8% on its Bitcoin assets and is targeting an annual BTC yield between 6% and 10% in the 2025-2027 period.

Some people in the crypto industry shared their thoughts on this move. Commentator BitcoinMiningStockGuy is optimistic, and shared that $21 billion alone is comparable to the total market cap of all public Bitcoin mining companies. Ryan McGinnis, a volatility researcher, called the plan “escape velocity,” which suggests that MicroStrategy’s growing Bitcoin strategy is positioning it as a unique value holder among public companies and possibly beyond, including national treasuries. McGinnis also commented on MicroStrategy in March, where he described it as a “Monopoly of Value” because of its huge Bitcoin holdings.

On a broader scale, MicroStrategy’s market performance has also shown some very impressive returns. The company’s value surged by over 1,500% since 1999. This was more than Microsoft’s gains of 1,460% over the same period.

Reddit Cuts Back on Bitcoin and Ethereum Holdings

Not everyone is taking on MicroStrategy’s Bitcoin investment plan. Reddit sold the majority of its crypto holdings, according to its recent third-quarter 2024 filing with the SEC. The primary sales came from Bitcoin and Ethereum  treasury holdings. The 10-Q filing specified that both the net value of these assets and the gains from their sale were “immaterial” for the reporting period. Reddit reported proceeds of about $6.869 million from these sales for the quarter ending Sept. 30.

Initially, Reddit used its excess cash reserves to buy small amounts of Bitcoin, Ethereum, and Polygon’s MATIC as part of its treasury. This started in 2022 when the company embraced blockchain’s “significant potential” in its IPO filings.

The company’s treasury strategy limits its digital asset investments to cryptocurrencies that U.S. regulators have indicated as “likely not being a security.” Although Reddit also bought ETH and MATIC in recent periods, the filing clarified that these acquisitions and subsequent sales had minimal impact on its financials for both 2023 and the first nine months of 2024.

In addition to its crypto strategy, Reddit’s filing revealed a decrease in advertising demand, especially from sectors like technology, media, entertainment, and crypto. This is very likely driven by global economic challenges, rising interest rates, and geopolitical uncertainties. Reddit shared that while demand has dropped  in these areas since late 2022, it managed to somewhat offset this decline by expanding into other advertising categories.

Bitcoin Set to Hit $100K by January

Companies selling their Bitcoin could be missing out soon as BTC could reach $100,000 by January of 2025, according to a new report by crypto research firm 10x Research. The firm’s model recently generated two buy signals, one as recently as Oct. 14. It predicts a 40% increase from the current Bitcoin price of around $73,000, which could potentially push BTC past $101,000 by Jan. 27. So far, the model has an accuracy of 86.7% over its last 15 signals.

Oct.14 Bitcoin buy signal (Source: 10x Research)

One key driver behind this prediction is Bitcoin’s “black hole effect,” which suggests that Bitcoin’s increasing market dominance is drawing value from altcoins. Institutional investment interest in Bitcoin as a stable, long-term asset, similar to digital gold, also supports this outlook. In October alone, spot Bitcoin ETFs attracted $4.1 billion into Bitcoin, which strengthened the asset’s appeal for traditional and retail investors even more. 

Spot Bitcoin ETF flows by month (Source: 10x Research)

Additionally, regulatory developments could also very likely encourage broader adoption, as new rules will allow companies to report Bitcoin holdings at market prices. This could incentivize more companies to hold Bitcoin as part of their portfolios, which will then potentially increase demand even more.

Meanwhile, 10x Research also gave a short-term bullish view for Ethereum. It expects brief rallies but its long-term outlook is much more bearish. This cautious stance stems from Ether’s comparatively low yields in recent years and the perception of a slower pace of innovation, which could limit its growth unless new developments emerge to change this narrative.

BlackRock Bitcoin ETF Sees Record Inflows

Institutional investors also seem to think Bitcoin could go up soon as BlackRock recently recorded its largest inflow day for its spot Bitcoin ETF (IBIT) since the product’s launch on Jan. 11 of 2024. On Oct. 30, IBIT saw inflows of $872 million. This was more than the previous record of $849 million that was recorded on March 12. This spike fueled a lot of speculation among traders that a billion-dollar inflow day could soon be on the horizon.

Crypto trader Trading Axe shared with their followers that their prediction of billion-dollar inflows was no exaggeration. Another trader, Cozy The Caller, suggested to their followers that a $1 billion inflow day is very likely on the day Bitcoin reaches a new all-time high.