MicroStrategy, a business intelligence company co-founded by Michael Saylor, has been a leading corporate investor in Bitcoin. Since August 2020, the firm has purchased the primary cryptocurrency each quarter, accumulating a total of 140,000 BTC. The company’s strategy has been focused on maximizing long-term value for shareholders by investing in Bitcoin, which it believes is a dependable store of value with more long-term appreciation potential than holding cash.
Adding to Its BTC Holdings
Despite the volatile nature of Bitcoin, MicroStrategy has continued to increase its BTC holdings for 11 consecutive quarters. The firm’s most substantial purchases came in Q3 2020 when it accumulated over 38,000 BTC and then took that amount to more than 70,000 BTC by the end of the year.
In 2021, due to Bitcoin’s price records, the firm’s investment turned highly successful, and at one point, it was sitting on nearly $3.5 billion in unrealized profits. Even during the 2022 bear market, MicroStrategy continued to buy BTC and added over 8,200 BTC to its holdings throughout the year, increasing its holdings even during the second quarter and Q4, when other entities halted their bitcoin forays. By the end of 2022, the firm was sitting on a whopping $1.8 billion of unrealized loss.
The start of 2023 has been positive for MicroStrategy as the crypto market has shown some signs of recovery. Last month, the company’s BTC bet went in the green for the first time since June 2022 after the leading digital asset soared above $30K. MicroStrategy has acquired an additional 7,500 BTC since the beginning of the year, rounding up the total holdings to 140,000 BTC.
Profitable Quarter and Share Price Surge
The increase in Bitcoin’s value over the past several months has financially benefited MicroStrategy, allowing it to turn a profit during Q1. The company registered a net income of $461 million, with the software business revenue exceeding estimations. The development is partly due to tax benefits resulting from the firm’s BTC holdings. Additionally, the company used Bitcoin’s price surge to repay its $205 million loan to the failed Silvergate Bank at a 22% discount.
MicroStrategy, which is a publicly-listed firm, saw its shares rise during the first months of the year. MSTR stocks were worth approximately $145 on January 1, while currently, they hover around $318, representing a 120% surge. The positive start to the year bodes well for MicroStrategy’s bitcoin investment strategy and demonstrates the firm’s commitment to building a significant BTC position.