MicroStrategy: A Bitcoin Pioneer

MicroStrategy, the world’s first and largest Bitcoin Treasury Company, continues to make waves in the financial world. In a recent tweet, co-founder and chairman Michael Saylor highlighted a staggering comparison: the company’s Bitcoin holdings, valued at approximately $26 billion, exceed the cash holdings of global corporate giants such as IBM and Nike.

Aggressive Accumulation Strategy

Since 2020, MicroStrategy has embarked on an aggressive Bitcoin accumulation strategy, positioning the cryptocurrency as its primary treasury reserve asset. As of November 10, MicroStrategy holds nearly 279,420 Bitcoins, acquired at an aggregate purchase price of $11.9 billion and an average purchase price of approximately $42,692 per Bitcoin, including fees and expenses.

According to Bloomberg, this Bitcoin cache worth nearly $26 billion is larger than the cash and marketable securities of global industry heavyweights like International Business Machines Corp. (IBM), Nike Inc, and Johnson & Johnson. Only a few corporations, including Apple Inc. and Alphabet Inc., have more assets in their corporate treasuries.

Share Surge

MicroStrategy's shares have increased by more than 2,500% as Bitcoin's value has risen by over 700% since mid-2020, making it the best-performing major U.S. stock during this period. Bitcoin recently set a record of over $93,500.

MicroStrategy created a performance metric called Bitcoin yield, which analyzes the percentage change in the ratio between its Bitcoin holdings and assumed diluted shares outstanding from one period to the next. The year-to-date yield currently stands at 26.4%.

Saylor made the decision to invest in Bitcoin in 2020 as a hedge against inflation, particularly as MicroStrategy's revenue growth slowed. The firm initially made purchases with cash from operations but has since leveraged funds from stock issuance and convertible debt sales to increase its purchasing power. It has emerged as the largest publicly traded corporate holder of Bitcoin.

MicroStrategy is doubling down on its Bitcoin strategy, aiming to raise $42 billion over the next three years to buy more Bitcoin.

This article was originally published on U.Today